Our research fellow Mr. Paul Corti Lakuma gave his views about the anticipated performance of the 2021 budget in the post covid-19 economic recovery process. This was in an interview with the Monitor for an article to which other policy experts and economists contributed ideas.

Asked about the ability of the 2020/2021 budget to support post-Covid-19 recovery, Mr.Lakuma,noted  that success of the budget will rely on "stability of the budget."

"The budget must have some stability. I expect that principle to be maintained in this budget. I would discourage the sudden shift of sectoral spending without building capacity at sectoral level to spend," said the EPRC research fellow.

He continued: "The health sector will still receive 8 per cent of total allocation. However, over the medium term, we will, witness a gradual increase in expenditure in the social sectors, especially health. We have learnt a lesson, from COVID-19 about the preparedness of our system to handle a major catastrophe. I expect the fiscal stimulus for reinvigorating businesses and keeping the business environment vibrant to be handled through supplementary instruments.".

Mr Lakuma further believes that it will be difficult to reallocate conditional funding to the road and energy sector to social spending. This is besides road and energy sector, he says provide a bulk of jobs that support thousands of households directly and indirectly.

Dr Fred Muhumuza, Economics Lecturer, Makerere School of Economics, says the 2020/2021 budget is at variance with the current situation.

He said: "The 2020/2021 budget does not address the Pandemic and aftermath in any way since it still follows views that were there before the coronavirus outbreak. We should have reduced it by a minimum of Shs3 trillion to avoid excessive borrowing and disruption of private sector."

 

Breakdown of 2020/2021 budget

Financial year 2020/2021 total budget is:Shs45.5 trillion

The Ministry of Works and Transport: Shs5.8trillion

Security: Shs4.5trillion

Interest payment: Shs4.0 trillion

Others

Education: Shs3.5 trillion

Health: Shs2.8 trillion

Energy: Shs2.6 trillion

Accountability Sector: Shs2.1 trilion

Justice Law and Order sector: Shs2.0 trillion

Local Government: Shs1.7 trillion

Water and Environment: Shs1.6 trillion

Agriculture: Shs1.3 trillion

Public Administration: Shs1.3 trillion

Parliament: Shs667.8b

The original article appeared in the Daily Monitor on April 28,2020

Uganda: Is the 2020/2021 Budget Suited for Post Coronavirus Recovery?

https://www.monitor.co.ug/Business/Prosper/Is-2020-2021-Budget-suited-post-coronavirus-recovery/688616-5535898-p3pah/index.html

 

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