The Independent Uganda: You get the Truth we Pay the Price
Spiking cost of loans
The group says, under absorption of loans has led to an increase in the cost of loans hence leading to low returns on public investments.
According to the Auditor General’s Report for FY2019/20, loans worth Shs1.3tn performed poorly, and some reached expiry without full disbursement.
“We note the high cost of debt servicing at the expense of service delivery; with interest payments taking up Shs4.88trillion in FY2021/22,” Kashaija said.
He added: “We therefore, call upon government to improve on efficiency in public investment management by exercising due diligence and addressing issues relating to project identification, appraisals and absorptive capacity of for public debt financed projects.”
The group also notes that Uganda Revenue Authority has over the years been unable to fully deliver on its mandate of revenue collection by meeting its set targets.
This is partly attributed to staffing gaps, weak enforcement of compliance and administrative challenges.
“We therefore recommend that the URA is effectively equipped financially and technically to enable it improve efficiency of revenue administration through modernisation, enhancement of institutional and human resource capacities,” Kashaija said.
On local governments, which are at the fore front of service delivery, the CSOs say their financing through central government transfers is still low.
For example, the budget for local governments is posed to slightly increase from Shs4.3tn in FY2020/21 to Shs4.6tn in FY2021/22.
This is compounded by the fact that local governments have been performing poorly in domestic revenue mobilisation and often failed to meet revenue targets.
According to the Local Government Performance Assessment 2019 report, 77 of the country’ LGs were unable to meet their revenue targets.
CSOs recommend that the Ministry of Local Government to expedite the process of domesticating the Domestic Resource Mobilization Strategy to strengthen the Local Revenue Mobilization system at LG levels.
They also suggest that the finance ministry ensures that monies meant for LGs held by ministries departments and agencies are reallocated as mandated under the Second Schedule of the Local Government Act (Cap243).
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