Is the government broke?

By Joan Akello & Ivan Rugambwa

MPs worry as donor aid cuts, budget indiscipline bite

The salaries of MPs are late, teachers have not been paid for months, and police officers are being given food rations to stave off hunger as the government struggles to find money to pay them. The financial situation of the Uganda government was not looking at all good by end of July; just one month into the 2013/14 financial year.

Others yet to receive their salaries by then included officials from the ministries of Internal Affairs and Information technology, officials from parastatal bodies like National Water and Sewerage Corporation, and the National Planning Authority.

The delay in paying civil servants is confusing because in June, Parliament had passed a supplementary budget of Shs46.9 billion specifically to cater for them. The money included 4.6billion for the Education ministry to pay teachers who had gone for months without salaries, Shs3.8billion for the Health ministry, and Shs19.5billion for the Police, to cater for the force’s water and electricity bills plus salaries of the unpaid officers.

The Supplementary was passed even as opposition MPs accused the government of financial indiscipline, since it had come on the heels of another Supplementary budget from State House amounting to Shs14 billion.

Irked by the confusion over salaries the Speaker of Parliament, Rebecca Kadaga, on July 16 joined several MP in demanding an explanation from the government front bench.

“Where did the money we passed go?” she asked before ordering the ministry of Public Service to present a comprehensive statement to the House in three weeks ending August 9.

The Chairperson of the Budget Committee of Parliament, Tim Lwanga (Kyamuswa MP) told The Independent that the government owes the country an explanation as to why these civil servants are not paid.

“That shows that the budgeting process is being poorly managed,” he said.

Lwanga was speaking after it emerged that for the first time in years, MPs and parliamentary staff salaries were also delayed for 10 days.

Confusing explanations

There have been numerous explanations for the delays in salaries but, since they have been mostly contradictory, they have proved more confusing than helpful. Even promises to pay have not been honoured leading some MPs to conclude that donor aid cuts are hurting the economy far more than the government is willing to acknowledge.

Last year, the European Union, United Kingdom, the World Bank and other donors last year suspended up to US$300 million (Approx. Shs750 billion) in budget support to the government over alleged corruption in the Office of the Prime Minister.

At the same time, the Uganda Revenue Authority, which habitually surpasses its targets, suffered a cumulative deficit of Shs135 billion or 1.8% of its target. Not bad except that the URA target this year has been pushed up to Shs8.7 billion.

In the budget, Finance Minister Maria Kiwanuka said “non-traditional” sources of finance would be required to fill the void left by the donor cuts which, together with borrowing from the World Bank and others.

Such external entities, usually act as bail-out for the economy when domestic revenue proves inadequate to supply required public good and services. Without them, a government could become technically bankrupt a reason for printing more money. Although the budget deficit has been growing, it is not clear at what point the economy is.

For now, the government plan appears to balance the budget by collecting more money in taxes locally while drastically controlling expenditure in non-priority areas.

As a result, President Yoweri Museveni, while touring the Luwero sub-region in early July said teachers need to wait a bit longer before salaries are increased because the government’s top priority was infrastructure development. The President explained that infrastructure was the only catalyst remaining for the economy to take off.

When his statement was criticised by parliamentarians and UNATU as “insensitive”, the President on July 22 in the NRM caucus to address the concerns of delayed civil Servants salaries, this time said donor aid cuts were to blame for government’s failure to meet teachers’ salary increment demands.

He appeared unaware that teachers, police, prisons, health workers and a number of other civil servants had not received their salaries for as long as three months.

But when contacted, Kenneth Mugambe, Acting Director Budget at ministry of Finance, Planning and Economic Development told The Independent that “there is no way aid cuts can affect payment of wages”.

“Probably it would, 20 years ago, but today, there is just no way,” Mugambe said.

He also dismissed claims that the government does not have money to pay wages as a lie and said salaries of public servants take first place regardless of Uganda Revenue Authority missing its revenue collection target or the donor aid cuts.

“The government is not broke. It is just because of shortfalls and a few unique issues in certain ministries and government agencies like NPA (National Planning Authority), “URA’s projected revenue target is Shs8 trillion and the total wage bill is Shs2.3 trillion; even if it fails to meet this target by say Shs150 billion like last year, it cannot fail to pay the wages.

Meanwhile, Savia Mugwanya, the commissioner in charge of Payroll in the Ministry of Public Service also told The Independent that salary problems resulted from a shortfall in funding experienced towards the end of the just concluded financial year. She said everyone would be paid by end of July.

Police deputy Spokesperson Patrick Onyango also told The Independent on July 24 that by the end of July, all officers will have received their salaries.

“In fact, I am just from receiving information from our accounts department, informing me, that by the end of July, our accounts shall be updated with both the June and July salaries,” he said.

In an interview on July 30, Kenneth Mugambe confirmed all civil servants had finally been paid.

Uganda government Budget

Emergency measures

The delay in payment caused frustration for police officers, teachers, and other civil servants.

Otim (other name withheld to protect his identity), is a police constable at one of the police stations in Kampala city. He spoke to The Independent about his frustration. He was approached because, clad smartly in his khaki uniform, it was easy to assume that all was well as he went about serving his motherland.

When approached, however, Otim who was standing arms akimbo seemed resigned with dejection all over his face. He was from getting his ‘unusual’ ration of maize flour and beans, which was neatly packed in sacks as he bargained with a boda boda motorcycle taxi rider to take him home.

As he turned, after failing to agree on the Shs 3000 fare that the boda boda man was asking to drop his ration home, the dejected look on his face betrayed Otim’s inner frustration.

Tumwebaze, is also a police constable at one of the police stations in Kampala city. He told The Independent that although each police officer was receiving 15kgs of maize flour and 7kgs of beans, survival remained a challenge.

“When you wake up every day, going to work, your wife expects you to bring home something. But now, our wives even look down upon us because we cannot provide the family basics, like salt, food and others necessities,” he said.

Tumwebaze says they are entitled to housing and food allowances which they rarely get.

“Unlike other professions, we cannot demonstrate because that will be interpreted as a mutiny which is heavily punished under Ugandan laws,” he said.

Sources inside the force revealed all 40,000-plus officers, men and women had by end of July not received their salaries since June.

In the meantime, police stations around Kampala have been a hive of activity as police officers line up for long hours to secure their ration of food. It is not clear how the situation is being dealt with at station in the countryside. It is feared, however, that the police force; which is already ranked as the most corrupt institution in the country could witness an increases of solicitation for bribes and low attention to crime.

As August sets in, others in this category are teachers and health workers.

Teachers warn

Apart from delayed or missing salaries, the teachers also want a 20% salary increment that they had agreed with the government two years ago, through their association; the Uganda National Teachers Union (UNATU). This was after a sit down strike that lasted for days until government bowed to their demands promising an increment albeit in phases.

In 2011, the government promised the teachers a 50% pay raise to be scattered over three years; 15% in 2011 was paid. But the 20% slated for 2013 has been shelved, according to President Museveni who says concentration should be on infrastructure. The last 15% was to come in 2014.

But when Finance minister Maria Kiwanuka read the national budget for the FY2013/14, the teachers promised salary increment was conspicuously missing. For Charicha, a teacher from Bukwo, it was a double blow since even the meager salaries he was grumbling about was not paid into his account for the month of May, June, and July. He is not alone.

Charicha told The Independent: “When we demanded for a salary increment, it was because the salary we were getting could no longer sustain us, owing to the high standards of living. Now however, even the little that we were getting is no longer there. Its five months now since I last received my salary. I don’t know whether I have been sacked or not.”

UNATU General Secretary James Tweheyo says over 120,000 teachers in over 62 districts have not received their salaries for the months of May and June. He spoke to The Independent even as July was coming to a close.

Tweheyo said there are also cases of teachers who never received their April salaries and some that have not received any salary since December last year.

The NRM Caucus Chairman, David Bahati (Ndorwa MP), says after meeting with Museveni, it has been agreed once again that Shs5 billion be allocated to the teachers saving and credit cooperative (SACCO), for the next five years, to help teachers access credit at low interest rates.

The caucus also directed the ministers of Finance and Public Service to ensure that the teachers missing salaries are paid immediately.

In late July, the Permanent Secretary in the Ministry of Finance, Keith Muhakanizi, told journalist that Shs44 billion had been set aside to clear shortfall in pay for teachers, police and other civil servants.

But Savia Mugwanya, the commissioner in charge of Payroll in the Ministry of Public Service, had earlier told The Independent that her ministry had applied for another Shs56 million supplementary budget to offset the salary arrears which was still yet to be approved by parliament. It is not clear where the Muhakanizi intervention leaves that.

By press time, it was not clear if teachers and police had received their salary cheques. The government is working under pressure because teachers and the police are among the least paid yet crucial sector of the civil service. Some of them earn as little as Shs270, 000 (Approx. US$110) per month.

At the height of their demands, the teachers under UNATU held a general assembly on July 24 and resolved to give the government an ultimatum of 90 days to pay or face industrial action.

“I hear that in the caucus meeting, MPs resolved that teachers should be paid immediately. I do not know whether the word ‘immediately’ was used in error, or they don’t know its meaning, because up to now, teachers are yet to receive salaries,” Tweheyo told the meeting, “How do they expect us to survive?”

A meeting with the President in late July failed to reach agreement. Instead, UNATU insisted that if its demands are not met, its members would go on strike on Sept.16 to coincide with the start of third term. The timing of the strike threat date is crucial because third term is a period of critical year-end exams that are the basis for promotions for pupils and students. Failure to conduct exams for whatever reason is unprecedented and could potentially bring the education cycle to a grind.

Kenneth Mugabe, Acting Director Budget at ministry of Finance, Planning and Economic Development explains.

He said all civil servants were paid on July 29, including teachers with May and June arrears.  He said delay in payment roots back to the Financial Year 2010/2011 where government had a huge salary shortfall of Shs127 billion.  The government was granted supplementary budget worth Shs 127 billion to clear the bill but the auditor general was instructed to carry out investigations in the matter.

The auditor general’s report was released in June last year, a few  weeks to the beginning of the 2012/2-13 financial year and it also caused another problem. It showed that over 70,000 accounts in the Public Service ministry were invalid, and upon the advice of ministry of Finance, the said accounts were deleted from the payroll and were not budgeted for.

However, when public service conducted a verification exercise, most of the accounts were for bona fide civil servants, especially upcountry teachers, entitled to salary.

He says other votes such as police, ministry of Education and Sports, and National Planning Authority (NPA) had special reasons for delays.

The NPA board increased salaries despite the Finance Minister Maria Kiwanuka alert that there was no money to cater for the changes while the Education ministry recruited 6,000 primary and 2,000 secondary school teachers.

Decentralisation of the pay roll affected the tertiary institutions that were separated from the education ministry whose budget catered for only staff at the headquarters. The tertiary institutions had their own budget and were to be paid by the local government but their pay roll was not separated from that of the education ministry which also caused a shortfall.  The Finance ministry gave the Education ministry Shs 4.6 billion to pay the tertiary institutions.

There were promotions in the police which were however not catered for in the budget yet the force had started with a shortfall of about Shs10 billion at the beginning of Financial year 2012/ 2013.