How our taxes will be spent in 2024

Mr Stephen Ojiambo, the commissioner for accounts at the Finance ministry, told lawmakers on the parliamentary Finance Committee that this request and indeed others are to chiefly lessen possibilities of accumulating high interest rates on already active loans.

The government also plans to spend Shs197 billion on construction of the International Specialised Hospital Uganda (ISHU) in Lubowa.

The Budget Framework Paper presented on Friday shows that the money is in form of “four promissory notes under the ISHU project and two bills of exchange for Roko [Construction Company] share purchase are projected to mature during the course of the Financial Year 2024/25.”

While the ISHU project has been shrouded in mystery, with its progress report hardly accessible, Mr Henry Musasizi, the State minister for Finance in charge of General Duties, told the Committee chaired by Mr Amos Kankunda that “all this information is available and we can provide information on what we have paid to date and also how we intend to crystalise our full obligation in the coming years.”

Last December, Mr Musasizi tabled on the floor of Parliament a Shs52.7 trillion Budget Framework Paper as a projection of the government’s incoming Financial Year which commences in July.

The government revealed “the projection for expenditure on external amortisation has increased because of huge principal repayments on Karuma (Shs950 billion) [as well as] Isimba (Shs190 billion) [hydropower projects]; Kabaale Airport (Shs241b); Afrexim budget support (Shs218b) Standard Bank Support (Shs241b); [and] TDA/PTA budget support (Shs365b).”

Mr Musasizi also revealed that Shs247b will be spent as part of the first instalment of the $325m Uganda was ordered to pay the neighbouring Democratic Republic of the Congo (DRC). This is in the form of compensation for losses caused by wars in the 1990s when Ugandan troops occupied DR Congo territory.

Lawmakers dismayed

Lawmakers on the Finance Committee were dismayed that the government is prioritising settling foreign arrears. Domestic creditors, who supply goods and services to various ministries departments and agencies look set to be placed on the back-burner.

“I am aware that our current domestic arrears stand at about Shs7.7 trillion, but when I was reading through the Budget Framework Paper, I saw a provision of Shs200 billion,” Mr Basil Bataringaya (Kashari North) said, adding, “So the Shs7.7 trillion, these are Ugandans who have lent money to [the] government free with no interest rate. They have supplied, they have done business, but they aren’t yet paid.”

Mr Bataringaya’s calculus revealed an even more dire outlook for the local creditors. He noted thus: “Now, Shs7.7 trillion, if we take Shs200 billion every year, we are going to take 39 years to pay this Shs7.7 trillion. So my question is, this person who supplied Uganda, what hope does he have? And remember they used bank loans. Some of them will commit suicide,” Mr Bataringaya said.

Whereas the government concedes with the need to clear up accumulated loans over the years, Minister Musasizi held thus: “We keep paying and arrears, but others keep coming. It is not a static figure. We can provide you with a report on where we are. This year, we have so far paid Shs200 billion. Resources allowing, we would wish to really pay them to settle the arrears completely.”

The junior Finance minister also conceded that the enactment of the Anti-Homosexuality Act, 2023 has compounded matters and caused uncertainty for Uganda. This, he added, has compelled the government to scale-up negotiation efforts with the World Bank to revisit its freeze on funding of Uganda’s projects.

“The enactment of the anti-homosexuality Act has created external financing risks and uncertainty. We have continued with our engagements with the World Bank to ensure the lifting of the ban on the financing of the new projects,” Mr Musasizi said.

State House back at it

In another twist, Parliament learnt that the State House is in pursuit of Shs57.14b to bankroll the procurement of cars, household items and security items for the presidency.

This is contained in their request tabled before the Committee on Presidential Affairs. The committee interfaced with State House officials, including Ms Jane Barekye—the comptroller, on Thursday.

The Shs57.14 billion request dwarfs the Shs21.7 billion appropriated for State House in the Budget Framework Paper ahead of the commencement of the 2024/2025 FY in June.

In submissions made before lawmakers on the Presidential Affairs Committee, it was indicated that Shs14.40 billion is required for the furtherance of “refurbishing” of the Entebbe State House; Shs13.46 billion to upgrade security equipment through purchase of some security items; and Shs6.54 billion for purchase of vehicles. A further Shs8 billion has been pencilled in for travels abroad.

“For the smooth operations of the presidency, State House operates various equipment for security, household, press, office and transport. The operations of the presidency require a large fleet of vehicles for both the principals and support staff. The State House also operates a presidential jet and helicopter,” Ms Barekye told the committee.

The State House also wants another Shs30 billion to cater to donations, Shs4.2 billion for increased wage needs, and Shs16.9 billion to cover staff allowances.

“However as a cost-saving measure, staff are paid an out of pocket allowance and not paid per diem for the field operations. In lieu of the per diem, the staff are paid a monthly consolidated package,” Ms Barekye disclosed, adding, “Given the increasing numbers of both regular staff and SFC (Special Forces Command), who are paid a food basket allowance, the item has a shortfall of Shs16.986 billion.”

In the 2024/2025 draft of the national budget tabled last December, the State House was allocated Shs421.92 billion. Of this, Shs25.23 billion was planned to cover wages; Shs21.72 billion for development; while Shs374.96 billion is planned for recurrent expenditure.

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