Participants at UEA post budget debate 2015/16
The recently passed 2015/16 budget attracted mixed reactions from economists during a post budget review debate jointly organized by the Uganda Economists Association, Bank of Uganda and EPRC.
Makerere University’s John Mutenyo in his presentation contrasted how the budget impacts on interest rates, inflation, debt sustainability and the Uganda’s absorption capacity. He noted that the budget is not backed by output growth and that it is majorly foreign funded. Mutenyo predicted a rise in interest rates in case the Central Bank attempts to curb inflation by use of Consumer Price index (CPI). He argued that use of bonds and bills to sustain domestic debts would attract higher lending interest rates from commercial banks which then will suffocate the informal sector.
However, Adam Mugume of Bank of Uganda, said that the central bank will not print more money to finance the forthcoming elections. “We have not printed money, if we print I will resign officially,” Mugume said amidst jeers from the audience.
On low absorption capacity where billions of money from donors is never utilized, Mutenyo stressed that technical education, health and agriculture will remain in a state of quagmire as long as funds are not fully utilized. He noted that Ugandans are paying interest on non-used funds which he believes will lead to lawlessness among unemployed populace.
Ibrahim Kasirye, a Principal Research Fellow at EPRC, castigated the budget for lacking funds for fighting the persistent infant mortality rate, much as it attempts to improve on nutrition. “We produce five million children yearly yet we have few midwives,” Kasirye added in response to the 500 midwives being trained and bonded, in anticipation of the 2015/2016 health budget funds. Kasirye called upon government to fund the Mama Kit initiative so as to motivate uptake and civic demand for better health care services. He cautioned against having non uniform packages that may negatively influence health seeking behaviours among mothers.
Likewise, Lawrence Bategeka, an economist in private practice stressed that human development must be a government priority, entailing establishment of practical based education, addressing people’s health demands and ensuring social security; for instance curbing theft of pension funds. In addition he said, ensuring political balance in the allocation of the national cake must be emphasized to avoid regional imbalances. Similarly, Hon. Kibirige Ssebunya, member of the Parliamentary Finance Committee, advised government to channel money directly to beneficiaries (SACCOS) and not to ministries which he says waste time and funds in foreign trips which never impact on local lives.
Hon. Kibirige further defended the taxes on fuel and confectionary arguing that due to rising demands from the public, government is left with no option but to tax citizens so as to meet such demands. However, Sarah Ssewanyana the Executive Director, EPRC argues that Government and Uganda Revenue authority should conduct tax education and exercise accountability.
When Julius Kizza, a Makerere University Political Economy Don stepped on the podium, he discussed politics and how it affects the economy. The professor drew the attention of the debate to numerous gimmicks planted in the constitution among other acts, which are used by top politicians to channel huge chunks of money into personal projects in the name of public service. He cited Article 155 of the Uganda’s constitution which empowers the President to prepare fiscal and monetary programmes, and also gives him authority to appoint the committee that endorses estimates of revenues and expenditure covering periods exceeding one year.
The debate on the theme “Macro-economic Implications of a 24 Trillion Budget”, drew participants from the academia, civil society organizations, government and the media. As it came to a close, the conveners were challenged by Hon. Kibirige to organize budget debates before the budget is passed. He explained that post budget reviews often impact less on budgetary decisions and appropriation.