News & Up­dates:

Parliament has debated and unanimously approved the Sh43trillion Budget Framework Paper for the financial year 2022/23.
The Budget framework paper currently before various Parliament sector committees for scrutiny, was passed on January 29, after harmonizing positions from both minority and majority reports of the Committee on Budget.

The Budget Framework Paper is a key component in the budgeting and planning because it sets boundaries and gives a sketch of what Ministries, Departments and Agencies budget allocations are. Section 9(8) of the Public Finance Management Act requires Parliament to receive and process the
Budget Framework Paper (BFP) by the 1st of February.

This year’s Budget totals Sh43trillion, with agro-industrialization given Shs1.8 trillion, integrated transport infrastructure and services Sh4.8 trillion, sustainable energy development Sh1.1 trillion and human capital development Sh6.9 trillion. Legislation, oversight and representation is estimated to part with Sh686billion, governance and security Sh6.4 trillion, with Sh5 trillion earmarked for debt interest payment.

Domestic debt refinancing, which by law must all be paid within the subsequent financial year preceding the one in which the debts were sought, will tentatively scoop Sh7.6 trillion, the highest proposed payout in the Country’s budget cycle. External debt repayments, technically referred to as amortization, is scheduled to account for Sh2.4 trillion while domestic arrears and appropriation in aid will take Sh395billion and Sh212billion.

Mudime Wamakuyu the Elgon County MP noted the allocations are worrying because most of the allocations are going into debt repayment and little will finance human capital development.

“The proposed resource prioritization is very worrying and could indicate that our fiscal operations may
not be sustainable in the long run as debt related payments continue to take the largest share of the budget; as allocations for interventions to strengthen the productive sectors of the economy to drive growth are least prioritized,” he said.

“If we are to tackle the underlying causes of high interest rates for businesses, then there is need to roll out massive provision of Business Development Services (BDS) to boost their internal management capacities to access government interventions such as soft loans from Uganda Development Bank,” he
added.

Mawogola South MP, Gorreth Namugga presented the minority report where she noted that it would be wrong to collapse all poverty alleviation funds into the proposed parish development model.

In the minority report she noted that whereas government agencies have already allocated resources to the Parish development model, all their services should be decentralized at the Parish level rather than creating new structures to implement the program.

The junior finance minister, Amos Lugolobi asked Parliament to restructure its Committees to align with the Program Based Budgeting, rather than the current set up where committees are constituted based on sectors. He said this basing on the fact the government adopted progamme based budgeting.
Ends…