Monday, May 30, 2011


Budget day this year has been set for next Wednesday, June 8th .

It will be a welcome break – at least for me from all the wolo …. Sorry, politicking we have been suffering over the last six months.

At close range, caught up in the daily rat race the negatives get largely magnified and the positives seem like temporary reprieve from the hard times.

I like budget season because it is the one time in the year that we step back and see the forest from the trees.

In the budget we expect the Finance minister to announce that despite falling marginally below expectations, the economy grew by 6.4% compared to the planned 6.6%. Last year the economy grew by 5.2%.

Continued economic growth is critical. You cannot have poverty eradication without growth in the general economy. You might argue about whether the benefits of growth are spread equitably, but as long as the economy is growing there is hope for us.

The minister will also announce that despite a sh46b shortfall in revenues collected during the last 12 months, our share of revenues as percentage of GDP has grown to 13% from about 12.5%.

These increased revenue collections means we are relying less and less on donor funding. When I started my business journalism career, donors carried more than half our budget now the minister will announce that in the just concluded year donors paid out sh2,300b or about a quarter of our total budget. A much larger budget it must be added than when I started out.

Indications are that this will reduce further to about a fifth of the budget over the next five years.

The importance of this gradual progression cannot be underestimated. For one it means we are increasingly take control of our budgetary prioritization. I will never forget the then Energy minister Syda Bumba being made to jump through hoops, running around the region getting commitments from regional governments that they will buy our power, as a donor condition to finance Bujagali dam. The donors were unconvinced that there was sufficient local demand for a mere 250 MW. With our own resources such ignomity will be avoided.

Secondly, in the long term, an improved democracy will only take effect when we shoulder more or even all of our budget with our taxes.

Exciting in the budget for me is the allocation of funds, sh830b to kick off the Karuma power project, money for the construction of the oil refinery, rehabilitation of the Tororo-Pakwach railway line and commencement on a standardized gauge railway line from Malaba to Kampala, all important projects to ease the process of doing business in Uganda.

It is obvious that if the commendable growth figures this country enjoys are to trickle down to the people, we need to get a handle on the corruption issue. It is bad enough that we are constrained by how much money we can spend on the critical areas of social services and infrastructure development, without adding the grubby fingers of public officials looting the state coffers.

I was encouraged that the vote for accountability this time around will be increased by more than 50%. We can gnash your teeth all you want at the Inspector General of Government and Auditor General or any other of agencies but if they have no money you might as well be pissing into the wind.

An increased in budgetary allocation is a start – the highest increase after energy and mineral development who will see their budget tripled. Let us man our agencies and equip them the best we can to tackle corruption with the seriousness it deserves because truth be told it is a national security issue.

History shows that that the trajectory of development is not a straight line, it moves in waves. Your best case scenario is that you take three steps forward and two steps back, but as long as the trend is upward there is hope.

This has been a testing financial year, but you have to give it to the irrepressible human spirit to continue to survive and even thrive, in less than ideal conditions.

No comments:

Post a Comment