House passes Shs72.136trn budget for FY 2024/2025

KAMPALA, May 17, 2024 – Parliament has passed the national budget for the financial year 2024/2025, approving a total expenditure of Shs 72.136 trillion following the passing of the Appropriations Bill 2024 on Thursday, showing a marked increase of about Shs 14trn from the initial budget proposal of Shs 58.34trn.

The budget comprises recurrent expenditure of Shs 18.9trn and development expenditure of Shs 34.7trn, with the total amount including statutory expenditure standing at Shs 72.136trn.

The biggest portion of the budget, Shs 32.3trn, will be sourced from domestic revenue (tax and non-tax revenue), while other sources include budget support [grants and loans] of Shs 1.3trn and domestic financing [domestic borrowing] of Shs 8.9trn.

Additional sources include project support of Shs 9.5trn and domestic debt refinancing [rollover] of Shs 19.8trn.

From the above resource envelope, Shs3.1 trillion is allocated for external debt repayment, Shs 9.5trn for project support, Shs 12trn for domestic refinancing, Shs 9trn for interest payments, Shs 293.9 billion for appropriation in aid, Shs 603 billion for Bank of Uganda recapitalisation, Shs 200bln for domestic arrears, and Shs9.1trn for domestic debt repayment under Bank of Uganda, take a first expenditure call.

The breakdown of the budget highlights key priorities and allocations for various sectors. Human capital development emerged as the top priority, receiving Shs 9.9trn [26.3 percent of the budget] for investments in education, healthcare, and skills development.

Governance and security was allocated Shs 9.1trn [24.2 percent of the budget] to bolster law enforcement and national security measures. Additional allocations include Shs 5.1trn for integrated transport infrastructure and services, Shs 2.3trn for development plan implementation, and Shs 2.0trn for private sector development.

Significant investments were also directed towards key sectors and initiatives, including sustainable energy development [Shs 1.0533trn], administration of justice [Shs 481.4bln], legislation, oversight, and representation [Shs 978.6bln], climate change and environment management [Shs 682.6bln], and Digital Transformation [Shs 230.9bln].

Presenting the report, the Deputy Chairperson of the Budget Committee, Remigio Achia, emphasised the need to strike a balance between infrastructure and human capital development as well as re-engage development partners, especially under the programme of human capital development. “Investments in social sectors, especially health, education, and social protection, have a direct impact on poverty and income inequality,” Achia, also Pian County MP, stated.

Achia also highlighted an allocation of Shs 362bln towards the Uganda Secondary Education Expansion Project for the construction of 60 seed schools in sub-counties without secondary schools and the expansion of 61 existing government secondary schools, with special consideration for refugee-hosting districts and transfers to the Uganda National Examinations Board to facilitate the equating of student refugee results.

The Minister of State for Finance, Planning, and Economic Development [General Duties], Henry Musasizi, provided insights into budget financing, mentioning that, “Shs 34.3trn is for appropriation and Shs 37.8trn is statutory.”

The budget will be financed through domestic revenue, budget support, petroleum fund transfers, and other sources.

In his remarks, Musasizi emphasised the strategic focus of budget investments on peace and security initiatives, road maintenance, railway rehabilitation, and construction projects.

Notable allocations include funding for the Hoima and Akii-Bua stadium construction ahead of hosting the African Cup of Nations in 2027 and the initiation of the Standard Gauge Railway construction.

Shs 30bln has also been allocated to kick-start the process of establishing Busoga and Bunyoro universities.

“The investments shall be directed towards peace and security, maintenance of roads and construction of a few strategic ones as well as rehabilitation of the metre gauge railway and construction of standard gauge railway,” Musasizi said.

The budget approval process also saw parliamentary discussions and perspectives from Members of Parliament, including concerns over public debt raised by Ibrahim Ssemujju Nganda, the Kiira Municipality MP, who noted, “Next financial year we are going to spend Shs 34trn servicing a debt and yet the country thinks we are processing a budget.”

Theodore Ssekikubo, representing Lwemiyaga County expressed surprise over the addition of Shs 14trn to the budget.

Meanwhile, Geofrey Ekanya, the Tororo North County MP  defended the move to increase the budget, stating that Members of Parliament had pleaded for funding for local councillors’ ex-gratia.

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