Is Uganda broke?

Under the aegis of total accountability and transparency, the Ministry of Finance under Muhakanizi routinely publishes government quarterly releases and expenditure on its website and in media outlets including The Independent.  But critics insist these releases have in the last two quarters covered only basics like salaries, gratuity and utilities. In some cases, the critics say, the money does not in fact get released to listed recipients.

Mugambe dismisses their claims. He says the government cannot publish releases that do not get to the targeted recipients because international financial oversight agencies like the International Monetary Fund (IMF) routinely go through these figures.

URA bullish

These revelations come at a time when government departments are struggling as the country comes to the end of this financial year. Matters are not helped by the fact that tax body, Uganda Revenue Authority (URA) has not been collecting enough. Owing to the uncertain electoral period, the taxman registered a shortfall of Shs242.6 billion between January and March.

The shortfall mainly arose from a fall in domestic taxes like Pay as You Earn (PAYE) remitted on behalf of employees by employers, Value Added Tax (VAT) charged on consumption, and local excise duty paid by manufacturers. The tax deficit on these areas of the economy reflected a slowdown in activity. Now URA needs to raise over Shs 80 billion per month until June to beat its target.

Domestic taxes for the period July 2015 to March 2016 were Shs4.5 trillion, which was Shs145.58 billion below what was targeted. Fortunately, the URA total revenue performance is showered up by a 102.35 percent performance within the first six months of the financial year 2015/16. According to Dickson Kateshumbwa, the commissioner of customs, who released the URA performance report, the offset caused by the Shs242.61 billion between January and March, needs to be seen against that background. Kateshumbwa said URA remains confident it will meet and achieve its target for FY 2015/16.

“We think that the factors that have affected performance in the last three months were temporary,” Kateshumbwa said, “they are not factors that we think will continue to play in the next remaining months.”

For critics, however, given the amount of money that the ruling party spent during elections and the fact that state coffers dried up around the same time, it is government money meant for projects that was used in electioneering.

The Alliance for Campaign Finance Monitoring (ACFIM), on Jan.21 published a report detailing trends in election expenditure by parties, parliamentary and presidential elections ahead of the 2016 elections.

ACFIM’s report showed that President Museveni and his ruling party dwarfed the entire opposition at all forms of election spending.

ACFIM showed that between November and December, President Museveni spent almost 12 times more than his two closest opponents combined on his presidential campaign over the past two months.

Across the 16 districts that ACFIM studied in November and December, Museveni spent in excess of Shs. 27 billion or 91.6 percent of the total minimum expenditure. Yet ruling party insiders say this was just a tiny fraction of what was spent given that there were individuals who were single-handedly controlling a budget of over Shs. 40 billion.