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Opposition Warns on Escalating Debt, Wants More Funding in Agriculture, Tourism

In the current 2020/2021 budget, the Works and Transport docket took the lion’s share with an allocation of 5.84 trillion Shillings, followed by Security with an allocation of 4.5 trillion Shillings. Agriculture and Tourism are among the least funded sectors.
Leader of Opposition Betty Aol Ocan.

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The Leader of Opposition (LOP) Betty Aol Ocan has demanded that government invest more money in the country’s productive sectors like Agriculture and Tourism in order to solve the unemployment and poverty.

Ocan today presented before Parliament the Opposition’s alternative proposals to the coming financial year 2021/2022 budget.

In her statement, LOP Ocan said that although the country’s economy is reported to be growing, the growth is not inclusive since it has not translated into jobs, poverty reduction and wealth for Ugandans.

“We are concerned that the economy is now on a rapid path of sustainable growth. However, the number of new jobs arising from this growth has been disappointingly low. It is estimated that of the 700,000 individuals who enter the labor market each year only 100,000 find employment,” she said.

Ocan recommended more investment in productive sectors saying that these will create more jobs as compared to complementary sectors like works and transport. She also said that more support should be given to the private sector so as to overcome the economic effects of Covid-19 pandemic.

In the current 2020/2021 budget, the Works and Transport docket took the lion’s share with an allocation of 5.84 trillion Shillings, followed by Security with an allocation of 4.5 trillion Shillings. Agriculture and Tourism are among the least funded sectors.

The Leader of Opposition also called for the re-adjustment of the budget ceiling since parliament established that the Central bank does not need a recapitalization of 481 billion Shillings as earlier stated and demanded by the Minister of Finance.

Speaking about external borrowing, Ocan said that the increasing rate of borrowing is the country’s biggest burden and she proposed that a public debt repayment schedule should be developed and published to guide debt management.

The Opposition also wants the terms and conditions of domestic borrowing to be tabled before Parliament and become enforceable by a resolution. According to Ocan, government must not commit loans that it is not intending to use in the near future.

She says that it sounds irregular for taxpayers to pay for interest on loans that are idle.

A recent International Monetray Fund- IMF report raised a red flag at Uganda's rate of borrowing warning that by 2022, the country's debt would be unsustainable.

According to the Bank of Uganda (BoU) monetary policy report for August 2020, the country's public debt increased by 20.5 percent from 46.2 trillion in June 2019 to 56.5 trillion in June 2020. The increase in the public debt according to the report was attributed to accumulation of interest on old debts and the many acquired new debts.

Revenue The Opposition in Parliament raised concern over the projected reduction in domestic revenue by 1 trillion Shillings despite an increment in (external) budget support funding by 755.4 billion Shillings.

She recommended that for the country to boost revenue collection by Local Governments, there should be increased allocation of funds to Local Governments to undertake revenue assessment and registration so that there is no more reliance on the Central Government collections.

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Deputy Speaker Jacob Oulanyah, said that for proposals by the Leader of Opposition to be successfully captured in the budget process, the Clerk to Parliament should extract the recommendations and forward them to all the Ministries, Departments and Agencies that submit policy statements to the House.

“Because policy statements are supposed to be in this House by the 15th of this month and today is already 4th, so time is of essence," Oulanya directed. "Clerk, extract these recommendations and forward them straight to the MDAs so that they can look at them in the process of preparing their Ministerial Policy Statements to be submitted to the House.”

Jack Wamai Wamanga, the Mbale Municipality MP questioned whether the policy statements and alternatives previously offered by the Opposition side in Parliament have ever been considered by government in the budget.

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Abdu Katuntu, the Bugweri County MP said that they need some accountability on the part of government in regard to the extent the Opposition views have been taken up. He says that this is one of the ways of taking the budgeting process seriously.

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Ruth Nankabirwa, the Government Chief Whip assured MPs that they have been accommodating some of the recommendations that government thinks can be adopted. She said that this can be traced in the different treasury memorandums government submits to Parliament.

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Oulanyah reiterated his earlier ruling saying that the recommendations by the Opposition should be sent to the different Ministries for consideration.

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Henry Musasizi, the Finance Committee Chairperson noted that the Opposition alternative statement should have come at a point when Parliament was debating the Budget Framework Paper- BFP in January since the PFMA, 2015 provides that the policy statements must be consistent with the BFP.

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David Bahati, the State Minister of Finance for Planning also noted that the alternative by the Opposition should have come in January but he hastened to add that the recommendations would be discussed alongside the ministerial policy statements that are yet to be discussed by parliament.

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