UGANDA NATIONAL BUDGET: SPEED IS OF THE ESSENCE

The excitement of the budget reading ended a long time ago. Last week by the time finance minister Mathia Kasaija read the budget, we knew all there was to know about the 2024/25 budget.

The budget making process had been going on for nine months and was passed at the end of May. The budget reading to a large extent, is a constitutional requirement now.

But even before that, with the liberalization of the economy and privatization of state owned enterprises, government has no direct control on prices.

"A whole generation of Ugandans do not know the excitement of waiting for the finance minister to pronounce on the price of milk, petrol and sugar. It is now generally accepted that the finance minister has no business setting commodity prices. Which is as it should be...

Believe it or not, by liberalizing the market and privatizing government companies the economy has become more efficient in generating wealth and some may argue, distributing it as well. But that is more testament to government inefficiency down the years, because the market is not the best distributor of wealth.

While official figures show otherwise --  Kasaija reported the economy grew six percent, there is a general feeling the economy is not working for the man on the street.

Kasaija left some clues as to why this is so; debt repayment as ratio of revenue collections will jump to 40 percent from 33 percent, way above the acceptable threshold of 20 percent. This means more and more money is going to paying off debt and not to building infrastructure and social services. The minister pointed out though, that most of the debt has gone to infrastructure development which is underpinning our current growth.

Looking at roads alone there is not much to write home about. Ten years ago then finance minister Maria Kiwanuka reported that the country had 5,224km of paved roads, last Thursday her successor reported we now have 6,338 km of paved road. In ten years we have added 1,114km or about 100 km a year during the period. We know of course that the issues around procuring the projects and compensation slow down these projects, but how does the problem persist decade after decade?

We have all seen it in the suburbs, how there is an explosion of economic activity once some tarmac is laid down. It therefore follows that a faster road construction, to at least keep up with population growth, might just ease our economic pains. As it is now our stock of paved roads are growing at barely two percent a year compared to the population growth rate of about three percent.

Interestingly, Kiwanuka said there were 1700 km of road in the works, are some of those roads only just being done now?

Minister Kasaija also said last week, the government has earmarked sh200b for paying arrears, a pittance when seen against a total stock of nearly sh8trillion. In mathematical terms, if the government owes you a million shillings it will repay you sh20,000 in the next financial year. So there are many businesses, maybe hundreds of businesses, which will fold or will endure unbearable hardship as the wait in anxious hope for government to repay them.

The pain of course is shared by their employees and suppliers and hence the general feeling that this economy is not working for us.

For the man of the street, it is hard to reconcile his hardship with the economic progress of the last ten years.

"Ten years ago, Kiwanuka was making do with a sh15trillion budget or about half what we expect Uganda Revenue Authority (URA) to collect in taxes in the next financial year. In 2014 the size of the economy was about $32b compared to $53b now. It is safe to say we are well into middle income status now – per capita GDP over $1,100 but in 2014 per capita GDP was about $897...

We also feel a bit hard pressed because they are many more demands on our shilling these days than was the case a decade ago. Mobile phone users were about 20 million in 2014, a number that is what MTN reports as its subscriber base today.

But beyond voice calls we are using data at a prodigious rate. I was shocked to learn a few weeks ago that more than half of MTN data usage last year was on the short video app Tiktok! We no longer walk, why when there is a boda boda within spitting distance of anywhere. And of course our night life has continued to flourish as every suburb now has a half decent bar or two, within walking distance of every home.

So while there are issues of macro-economic inefficiency and government priorities, our own spending habits are making us feel harder pressed, even if the statistics show that the Uganda economy is on a tear.