Public financing is critical for countries to make sustainable progress towards improvement and extension of services to people. Many countries have initiated transitions to programme-based budgets, as a means to better align with public policy priorities and enhance accountability and transparency.
As such, Uganda has undertaken major budgetary reforms to optimize budget planning, transparency and accountability. The recent reform is the shift from sector-based budgeting to programme based budgeting through which the Government seeks to realize better service delivery and to improve value for money in public spending.
The Third National Development Plan (NDP III) has adopted a Programme Planning Approach (PPA) comprising of eighteen (18) programs that are to be aligned to Programme Based Budgeting. The purpose of programme planning and budgeting is to improve the prioritization of resource allocation using performance indicators.
The 18 programmes were established to address the persistent implementation challenges resulting from uncoordinated planning, weak harmonization, limited sequencing of programmes and poor linkages between outcomes and outputs.
Government with effect from July 1, 2020, started the implementation of NDP III as a successor plan to the NDP II. The overall objective of the NDP III is to increase household income and improve the quality of life of Ugandans. This plan is implemented using the programme approach to planning, budgeting, implementation and results reporting.
This programme was designed to address challenges faced in the implementation of prior national development programmes which included uncoordinated planning, weak harmonization, limited sequencing of programmes, and poor linkages between outcomes and outputs.
The most important goal is making the Government accountable for achieving the objectives of poverty reduction strategies or national development plans and for delivering results from annual budget spending which were not realized in the sector-based budgeting format.
Audit reports whose objective is to report on progress and performance are not published in a timely manner and have thus become compliance-oriented gestures, rather than being performance-oriented.
This explains the need for a programme based budgeting format whose focus is the delivery of results from an annual budget.
Whereas the transition to Programme Based Budgeting is a great initiative, it doesn’t contribute to overcoming the challenges caused by split Ministries and other central level agencies. As it stands the implementation of the reform was not fully leveraged to address previously existing inefficiencies and the pervasive fragmentation and rigidity at the central level endure and this hinders the allocation of resources in a more flexible way.
Also important to note is that the budgetary economics classification of the votes limits the full implementation of Program based budgeting. Each program is further divided into economic items (i.e. the wage, non-wage and development grants).
The programme structure remains unused to a large extent in expenditure management since budget control is still based on budget economic classification budget lines. The presence of this input based economic classification and associated rigidities contradict the spirit of Progamme based budgeting.
The new budgeting format remains a novice to the officials in local government structures as many understand it as new budgeting software rather than a different approach to budget formulation, execution and reporting. This is because the Indicative planning figures from the Ministry of Finance are still granted specific and do not present any correlation with the Programme based budgeting outcomes as defined by the Programme Based Budgeting structure for Local governments.
Whereas the Programme based budgeting format aims at linking resources allocated and service delivery by providing/setting performance targets (outputs and outcomes) upon which resources are allocated, service delivery related outcome indicators do not mention the level of progress towards the set outcomes.
The Auditor General’s report 2020/21 notes that the shift from sector to programme planning and budgeting requires tracking progress towards attainment of results which implies that accountability and oversight processes be re-aligned towards the achievement of results as defined in the NDP III framework.
The Auditor-General in his report noted that whereas their budgeting has shifted to the programme format, a number of programme working groups are still struggling to constitute themselves in order to do effective programme reporting which is affecting effective coordination and supervision of programme activities.
2 years into the implementation of programme-based budgeting which is guided by NDP III, a number of MDAs and Local governments have not fully transitioned their operations to the new programme based planning and budgeting and this is affecting service delivery on the grassroots level.
There are challenges that have been raised in regard to the implementation of the Programme based budgeting, the biggest being the fact that Programme Based budgeting is not well understood by all stakeholders but rather conceived as an extension of sector-based budgeting.
In order to realize the objectives of programme-based budgeting, Government should support the National Planning Authority in capacity building of MDAs and LGs staff such as planners, monitoring and evaluation officers among others to equip them with the necessary skills to track and evaluate the implementation of entity plans in line with the NDP III.