Gov’t cuts spending by UGX 2 Trillion as revenues fall

Kampala, Uganda | THE INDEPENDENT | The government has released funds for the first quarter of the financial year 2021/22, with focus on the health sector and the fight against Covid-19.

The release amounting to 5.673 Trillion Shillings represents 25% of the approved government budget minus external financing, appropriation in aid and public debt.

Patrick Ocailap, the acting Permanent Secretary at the Ministry of Finance, Planning and Economic Development said the amount released is less by 2 Trillion Shillings, compared to what had been budgeted because of the drop in revenues.

The economy was badly hit by the first lockdown to mid-2020, but a second deadly wave of the pandemic has forced the government to institute a new lockdown for an initial 42 days to contain the spread.

According to Ocailap, this is expected to hit the recovery of the economy hard.

As a consequence of projected shortfall in revenue of 2 Trillion Shillings and the need to respond to the Covid-19 emergency through a supplementary of 600 Billion Shillings, budgets of MDA’s have been suppressed by up to 41.2%,” Ocailap said.

He says that that the strength of the economy now lies in the hope that the agriculture sector will not be hit by harsh weather, and hopes that the situation will improve.

The areas prioritized under the release for the first quarter include funding for requirements for managing the Covid-19 pandemic under the health sector, support to the vulnerable population and other sectors.

Others are security, agriculture institutions to cater for the planting season and funding to cater for a certificate for ongoing contracts for key projects under roads, water and energy.

Under the health sector, the ministry has prioritized a supplementary of 206 Billion Shillings to cater for the provision of oxygen, logistics, hospital beds, Intensive Care Units and high dependency units for national and regional referral hospitals.

According to the ministry, another 218.1 Billion Shillings has been released to the National Medical Stores for the purchase of Covid-19 vaccines and other essential medicines and drugs for other diseases.

Mulago National Referral Hospital and the other referral hospitals have received 19 Billion and 67 Billion Shillings respectively. The relief funding to vulnerable groups has also been catered for under the supplementary with 53.5 Billion Shillings while about the same amount goes to the local governments and village health teams (VHTs).

The long-awaited payment of an improved lunch allowance for midwives and nurses has also been catered for, with 32.7 Billion after the allowance was increased from 3,000 Shillings to between Ushs 10,000 and 15,000, depending on the salary scale.

Another health sector spending is the 7.3 Billion Shillings for the operationalization of the Cancer referral laboratory.

Ocailap noted that some accounting officers do not remit Pay-As-You-Earn and National Social Security Fund deductions for contract staff and withholding tax due, yet all appropriations are tax inclusive. Others he says collect non-tax revenues and do not remit them to the consolidated fund.

“Any accounting officer who attempts to collect and use NTR at source or fail to remit it will be sanctioned accordingly,” he warns. He adds that funds for the first quarter will only be released to votes where the accounting officers appointed have submitted their acceptance letters & their performance contracts duly countersigned.

Ocailap says the minorities, departments and agents that have seen their budgets cut should bear with the ministry and use the resources sparingly, warning that the effect of the second wave is going to be worse in July than it was in June.

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