Parliament wants the money allocated to the Uganda National Roads Authority budget reduced because of the low absorption capacity.
The report from the parliamentary budget committee on the National Budget Framework Paper (NBFP) 2017/18 – 2020/21 indicates that the additional allocation of Shs 1.9tn to Unra is excessive, given the usual absorption challenges it is associated with, especially the lengthy procurement processes.
“Government should review the projected allocation to Unra for FY 2017/18 with a view of coming up with a realistic amount, which will be absorbed under the oil roads. This will free up resources for other constrained sectors,” the report reads in part.
The committee is mandated, among other things, to critically examine government budget estimates and make recommendations for general debate in the House. According to the government’s proposals, Unra has been allocated Shs 4.5tn, up from about Shs 2.6tn in FY 2016/17.
Members of parliament, in the report, have tasked the minister of finance to implement the Charter for Fiscal Responsibility (CFR), which has been widely seen as an attempt to mainly address government’s accumulation of arrears.
CFR was laid on the floor of parliament in August 2016, and approved in December. It sets measurable fiscal objectives to guide the budgeting and codifying Ugandan’s strong commitment to fiscal transparency, including the sufficiency of revenue, and the maintenance of prudent levels of public debt.
“The committee is constrained in determining the level of consistence of the Charter for Fiscal Responsibility with the budget framework paper as required by the Public Finance Management (PFM) Act 2015,” the report from the budget committee notes.
As of October 31, 2016, Uganda’s public debt hit $10.7bn, according to Bank of Uganda. In the NBFP, there was mention that the net domestic borrowing will increase to Shs 7.7tn, from Shs 5.3tn between 2016/17 and 2017/18.
In its seventh policy review of Uganda, the International Monetary Fund said that the adoption of CFR will help support fiscal policy formulation and transparency with the budget planning process and spending projections.
“The budget committee observes that FY 2017/18 will be the third year running of current NDP II, hence the need to closely scrutinize its consistency with NDP II,” the budget committee report reads.
“It is advisable that a mid-term review of NDP II is undertaken and remedial actions taken on sectors, which may be off-track.”
In their report, the committee observed that government had shifted from the output-based budgeting approach to the programme-based budgeting. The report indicates that the sudden transition in policy is likely to affect the NDP II.
The current projection further revises downwards the overall NDP II growth projection from an average of 6.4 per cent for the medium term. The report notes that the continued downward revision of the growth rate has a negative implication for the attainment of the planned overall developments under the NDP II.