State Minister in charge of Planning Amos Lugoloobi has explained the tough economic situation government found itself in as it prepared the budget for the 2022-2023 Financial Year.
On March 31, Minister Lugoloobi presented the budget estimates for the coming financial year before Parliament as per the provisions of the Public Finance Management Act which requires the Minister of Finance to present annual budget estimates by April 01 of the preceding year.
The Minister told Parliament that the budget for the next financial year will be guided by the theme ‘Full Monetization of the Ugandan Economy through Commercial Agriculture, Industrialization, Expanding and Broadening Services, and Digital Transformation and Market Access’ as derived from the Third National Development Plan (NDPIII) overall Theme of ‘Increased Household Incomes and Improved Quality of Life of Ugandans.’
Lugoloobi, also the Ntenjeru North, further noted that the Economic Growth and Budget Strategy for FY2022-2023 will focus on ensuring peace and stability, mitigating the impact of the Covid19 pandemic, and enhancing socio-economic transformation.
He went on to reveal that the estimated total budget for Financial Year 2022-2023 is Shs47.25tn, of which Shs28.668tn is ready for appropriation while Shs18.58tn will be for statutory expenditures charged directly on the Consolidated Fund.
The Minister in charge of Planning also apprised fellow legislators on the economic environment in which the budget for the next financial year has been prepared. He noted that government was unable to borrow over 53.9 per cent which in itself is above the maximum requirement of 53.1 per cent, provided for in the Charter for Fiscal Responsibility. But Lugoloobi was optimistic this would be restored to 47.8 per cent of GDP over the medium term.
The Minister also listed other challenges as: the inability to impose new taxes or raise the existing taxes due to the need for the economy to recover from the Covid19 pandemic impact; increasing commitments of interest payments and rising statutory obligations; tight fiscal space resulting from the effects of the Covid19 pandemic which delayed implementation of projects; and reduced budget support by development partners.
The others were: inadequate funds to finance all our budget needs; emerging critical funding needs required to transform the economy and meet more statutory obligations; and commitment to end the fiscal indiscipline of supplementary budgets, beginning next FY 2022-2023 by limiting them to three per cent of the total approved budget as provided for in the law.
Deputy Speaker Thomas Tayebwa, who presided over Thursday’s sitting, referred the budget estimates to the Committee of Budget and relevant sectoral committees. Tayebwa urged committees to be mindful of the tight deadlines for the processing of the budget.