And below, the CSBAG critique of the 2016/17 budget framework paper
Our Budget under extreme political pressures
Press statement by CSOs on the National Budget framework paper FY 2016/17
Held on 20th December 2015 at CSBAG Offices
Whereas it is a Government requirement under Section 9(5) of the Public Finance Management Act, 2015 to present Parliament the National Budget Framework paper by 31stDecember
Whereas Parliament of Uganda is required under Section 9(8) of the Public Finance Management Act, 2015 to review and approve the Budget Framework Paper by 1st February of the Financial year preceding the financial year to which the Budget Framework Paper relates, Whereas the National Budget Framework Paper translates government budget policies into annual budget and budget implementation, Whereas the National Budget Framework Paper FY 2016/17 projects indicative expenditure allocations and proposes government priorities, and Noting that the current NBFP FY 2016/17 marks the 2nd year of the National Development Plan II, we the Civil Society Organisations under our umbrella organization of the Civil Society Budget Advocacy Group(CSBAG), do hereby through this press statement express our opinions, views and reservations regarding the FY 2016/17 National Budget amounting to Ushs 19.73 trillion.
- Notable progress in Government public finance management practices:
- Increased compliance to the National Development Plan II:
Despite funding gaps in sectors against NDP II funding targets, we have noted with pride that sector budget priorities are in tandem with the NDP II
priorities. This will not only enhance our national planning but the possibility of achieving or national targets under NDP are visible.
- Improvement in Budget transparency:
Uganda in 2015 was ranked 3rd in Africa and number 1 in the East African region
on budget transparency by the Open Budget Index. Uganda possesses
acceptable and improving levels of budget transparency and it scored highly on providing up-to-date central and local government budget information which is crucial in enhancing citizens’ participation in the budget process. CSBAG commends government for continuously opening the budget space.
- Strengthening in the targeted public finance management systems: We commend government for upgrading the IFMIS with additional commitment controls but also for rolling out the Single Treasury Account systems to all government agencies. These measures will promote budget discipline.
- d) Timely release of funds:
CSOs are happy and do congratulate government for improving timeliness in release of funds to ministries, Departments and Agencies. Specifically, Government has been able to successfully send money on every 10th of the 1st month of a new quarter.
In addition, Government aligned the releases of funds to the school term calendar which has improved school operations.
At 90% fund release performance, this has improved execution of service delivery and timely implementation.
- Provision of CSO space in the Planning and budget execution processes: We wish at this moment to commend government efforts in providing spaces for CSOs to debate, interrogate and influence the planning and budget processes.
In particular, the Ministry of Finance has consistently interfaced with CSOs on matters of budget performance, accountability and public finance management. We also wish to acknowledge government strategy on development of a CSO budget matrix that will guide government and CSO budget negotiations. These and other measures will enhance citizens’ voice in budget matters and improve service delivery.
- We are happy to note that Uganda Tourism Board has improved its marketing strategies for Uganda’s tourism products. A number of awards have been won through participating in international tourism expos and direct marketing in Europe. Efforts such as bringing former
Barcelona international players should be encouraged.
3) CSO concerns in the National Budget Framework paper FY 2015/16
- Limited funding for Cooperatives and Cooperative Bank:
We note with concern that government has largely focused on Savings and Credit Cooperatives (SACCOs) leaving behind other types of cooperatives like production and marketing, Housing cooperatives among others.
Accordingly, revitalizing cooperatives has a funding gap of UGX 2bn.This was the same constraint in FY2015/16 Budget Framework which has not been resolved yet.
We recommend that government should put emphasis on cooperative development by providing the required funding amounting to Ugx 2bn to revitalize the Cooperative Movement and facilitate bulk Marketing.
Further, for over 3 years government has promised to kick start the formation of the cooperative bank at the cost of UGX 35Bn which has not materialized to date.
Government should start processes for the formation of the cooperative bank by providing UGX35bn.
- Poor performance for AGOA implementing Unit:
Whereas the AGOA Act Implementing Unit requires an additional UShs. 0.500 bn to put in place an AGOA Market Strategy to guide implementation of the AGOA Act, we note with concern that there are no visible interventions on AGOA. We strongly recommend that this entity’s performance be reviewed to establish its relevancy and the possibility of shutting it down. Continuously spending public funds on nonperforming entities crowds out other well intentioned programs.
- c) Inadequate medical staffing levels: Despite health sector having registered improvement in the Health sector indicators such as under five mortality rate that has fallen to 54.5 per 100 live births in the last two decades, and receiving 8.99% increment in its budget from 1.27trillion to 1.38 trillion, the sector is expected to receive 1.37 trillion for FY 2016/172.
Low staffing remains a challenge in the sector with the staffing gap of 17,854.
The proposal to recruit only 850 Health staff in FY 2016/17 is a drop in the ocean.
- d) Delay in establishment of the National Health Insurance Scheme:
Despite Government plans to institute a compulsory public Social Health Insurance (SHI) scheme, the National Health Insurance Bill 2007, still awaits issuance of a certificate of financial implication by the Ministry of Finance as of 2015. We urge Government to fast track the institutionalizing of the National Insurance Scheme to provide affordable health care to all Ugandans.
- Limited financing to curb HIV/AIDS prevalence:
Despite the growing HIV/AIDS prevalence, the sector in FY 2016/17 has grossly under prioritized financing for HIV/AIDS alleviation. It has a funding gap of 350m for research on HIV Therapy resistance, UGX 600m for the Population HIV Impact assessment Survey and a funding gap for Anti-Retroviral (ARVs) of UGX 151bn to roll out 2013 treatment starting point from 350 to 500 CD4 cells.
Worse still, Under Ministry of Health, in FY 2016/17 plans to institute an AIDS Trust Fund based on the Regulations as passed by Parliament have not yet been finalized. Government should allocate more funding for curbing the HIV prevalence rate in the country and fast- Track efforts to operationalise the AIDS Trust Fund.
- Inadequate investment for Operations and Maintenance:
Only 13% of the district conditional grant to water and sanitation is allocated to O&M which has led to persistent break down of water facilities causing intermittent access to water supply especially in rural areas.
There is need to strategically allocate adequate resources for O& M to improve water point functionality and maintenance.
- Limited capacity and functionality of the Equal Opportunities Commission:
Since the establishment of the Equal Opportunities Commission (EOC), Civil society is still concerned about the inability of this institution to become visible in line with mandate espoused under Equal Opportunities Act. In the FY 2016/17 the Commission has been allocated only 4.197bn to deliver on this mandate. Furthermore, the term of the EOC Board expired and to date there is no structure managing the commission and this will affect the organ in terms of growth and performance.
- i) Inadequate capacity within URA and police CIID to curb illicit financing;
According to the released by high-level level on illicit financial flows from Africa, Uganda lost an average of USD509m in illicit financial outflows each year between 2000 and 2008. To curb this vice, there is need to update functional capacities of key departments within the Accountability sector institutions like URA, Financial Intelligence Authority (FIA) and police CIID. It is therefore sad that an additional Ushs 5.1 billion required for full operationalisation of the Financial Intelligence Authority (FIA) is part of unfunded priorities. CSOs expect to see the following provided for in the FY 2016/17;increased investment into URA and police CIID capacities to match the digital economy and pace with globalization and digitalization, also call for budget re-allocation to provide for Ushs5.1 bn for full operationalization of the Financial Intelligence Authority, and an additional Exclusive of Non tax RevenueUshs1.6 bn towards full 0perationalization of Leadership Code Tribunal, to give effect to the Anti-corruption (Amendments) law already passed by Parliament in 2015.
- Failure to demonstrate Value for Money:
Whereas we appreciate increased sampling efforts by the Accountability sector institutions in carrying out investigations and audit functions, including
Forensic audits across MDAs and Local Governments (MDALGs). Such impressive effort has so far not demonstrated the desired outcomes, especially recovery of stolen public resources. While the Accountability sector institutions have over time attracted even bigger budgets for their operations, this does not match what is recovered. The tax payer still remains the net loser every financial year. CSBAG is also concerned that several of the OAG reports submitted to Parliament, have not been considered by the Public Accounts Committee in Parliament.
Just like Bank of Uganda does, the Accountability sector institutions as champions of transparency and accountability should demonstrate to Ugandans through findings from specific investigations and audits how much has been recovered.
We also demand that Parliament institutes special committees to ensure that all the backlog of the AG reports that have not been considered are handled before the expiry of the 9th Parliamentary term.
- Limited funding to the agriculture sector:
We continue to decry the complete neglect and inadequate funding for the sector. The sector is proposing to increase funding by only Ushs 151bn in FY 2016/17 from Ushs 505.84bn in FY 2015/16 to Ushs656.976bn in 2016/17. Yet there are serious funding gaps in the sector such as Foot and mouth disease has a funding gap of Ushs 8bn, Tse-tse fly control has a funding gap of 3.8bn, agricultural exports inspection has a funding gap of Ussh 8.5bn, wage and operation expenses of the newly created Directorate of Agriculture Extension Services has a funding gap of Ushs 0.928bn.
Although government argues that other sectors contribute to agriculture development, we recommend that all those contributions be quantified and all the investments for the agriculture development be channeled through the agriculture sector.
- Limited agriculture credit facilities:
We appreciate government efforts to establish the Agriculture Credit Facility (ACF)and its continued annual capitalization. However the scheme’s greater focus on large scale farmers at the expense of small scale farmers who are the majority in Uganda has affected its effectiveness. The ACF has also been challenged on inequitable distribution of the loan highly attributed to inadequate public awareness of the existence of the loan especially in the North and East and low presence of financial institutions in the North and East.
We recommend review of the ACF to allow for especially the small scale farmers to benefit at the same time government should with immediate effect start operations for establishment of an agriculture bank.
- l) Overwhelming case backlog:
More than 20,000 cases are pending determination before courts throughout the country.
Of these, 5,844 are pending before the Court of Appeal, 871 are pending the Kampala High Court Criminal Division while 97 cases are pending at the Supreme Court. CSOs recommend that government invests heavily in popularizing the use of alternative dispute resolution mechanisms and pre-bargain as well as budget and finance Court Circuit.
- Under targeting of sector outcomes under Energy Sector:
By 2013/14 the percentage population connected to the national grid was 14.8 % and this is projected to grow to 15% by 2016/17. The medium target by 2022 is 26%. Under the output 030102: Energy efficiency promotion- it is noted that the sector planned to install 175,000 prepaid meters for the financial year 2015/2016 and had achieved 155,000 by the end of the first quarter. With such an exceptional performance (88%) in just three months of FY 2015/16, it’s disappointing that the sector has planned to install only 200,000 prepaid meters in the financial year 2016/17. We propose the sector to increase its annual targets under this output to achieve 620,000 for the financial year 2016/17 to match it with current gap.
- Inadequate budget information for the Ministry of Works and Transport:
The sector does not indicate individual subsector budget breakdowns of Civil Aviation Authority, (CAA), the upcoming project of Standard Gauge Railway, and the Water Transport Sub sector. Although some of these sub sectors have priority activities under the narrative of BFP, their budget allocations are completely missing as per the vote function. What is even more surprising is that although the sub sectors are missing, the total sector budget stands at Ushs3, 797.607 excluding the said subsectors. It is not clear how the sector arrived at the total budget when other sector players are missing from the same total budget outlay. There is need to revise the budget to include details on the missing sub sectors.
- Wasteful expenditures for UNRA probe:
The commission of inquiry into allegations of mismanagement, abuse of office and corrupt practices in the Uganda National Roads Authority (UNRA) which commenced in July 2015 seems to be taking longer than the originally approved three months’ timeframe. We acknowledge that in October 2015, the President extended the Commission’s duration for another three months and a report is yet to be submitted. CSBAG’s view is that financing this process has become quite wasteful costing the tax payers a lot of money. Besides this process seems to have been overtaken by events since UNRA has already started implementation of what would otherwise be recommendations. We call on the probe to wind up and present its report for action.
- Deteriorating quality of education:
In Uganda today very few children in Primary 3 and higher are able to do basic reading and mathematics. In Primary 3, nine out of ten children (or 88%) are unable to both read and solve division at Primary 2 level, while in Primary 7, almost three out of ten pupils (or 26%) are unable to complete the same tasks. On average, among all children tested in Primary 3 to Primary 7, two out of three pupils (67%) are unable to read and solve division at Primary 2 level (UWEZO, 2015).
At local government level where the bulk of the services are delivered, the school inspection grant averaged UGX 2.4 billion. If apportioned evenly across the 134 local governments (including Municipalities) it amounts to UGX 17.9 Million for the entire financial year. This translates into UGX 940 only to monitor a primary school per FY. Government needs to address issues of teacher and pupil absenteeism, provision of quality scholastic materials and improved school inspection.
- p) Noncompliance by government to the public finance management act provision on the certificate for gender and equity:
In assessing the national budget framework paper it is apparent that there is extremely limited adherence to mainstream gender into the national budget, which is in contravention to Section 13 (15) (g) of the Public Finance Management Act, 2015. To the best of our understanding the National Budget Framework Paper should not be debated unless Certificates of Gender and Equity for various sectors are issued by Ministry of Finance in consultation with the Equal Opportunities Commission.
- Our worries on election financing –
According to Section 19 (1) (a) of the Public Finance Management Act, 2015, the Minister is required to publish a pre-election economic and fiscal update not earlier than four months before the polling day of a general election. As of now, the country has not received such a report from the Minister responsible and neither are there any indications that preparations are underway to Table this report to Parliament. Worse still Parliament is going on recess and there will be no independent government institution to assess the authenticity and analyse the quality of this report. If this report is not published, public resources are likely to be used to skew elections and it will be extremely difficult to ascertain how much of public resources would have been misused in the process of financing elections.