Uganda NGOs demand for a pro-People Budget

By Valerian Kkonde

PEARL NEWS SERVICE

KAMPALA- During their post Budget Conference on the 2012/13 National Budget Conference, Civil Society Organisations called on Ugandans to put government on pressure so as to spend money on important ventures.

Presenting the Civil Society Budget Advocacy Group’s (CSBAG) position on the presented budget, Mukunda Julius Mugisha cast doubt on the budget’s ability to be people-centered when government is withholding funds meant for key sectors like health, education and agriculture.

“Pubic administration is going to consume up to two trillion shillings in the 2012/13 budget. All this is meant for creating new districts and demarcating sub counties.”

Running on the theme: Government’s Renewed Commitment to People-Centered Budget: A Myth or Reality, the Conference sought to examine the ability of government to fulfill its projections as per the concerns and needs of Ugandans.

The CSBAG labeled the budget as ambitious and detached from the plight of the country, as it set out to achieve growth rate of at least 7%.

The budget comes at a time when inflation is still at the all time high 18%, youth unemployment at 32.2 per cent, Central Bank lending rates at 21 per cent and commercial banks lending rates at an average of 26-27 per cent.

With the general decline in purchasing power and a depreciating Uganda shilling, “such a situation would take more time not in one year as anticipated to achieve in the above targets.”

Agriculture, the backbone of the country, is expected to receive 585 billion in the budget an increase from 447 billion for the 2011/12 Financial Year. With over 80 per cent Ugandans drawing their livelihoods from agriculture, the sector requires more funding and attention. The 5.2 per cent of the national budget is still far below standard requirement of 10 per cent.

The NGOs still cast doubt on the agriculture funding arguing that the Agricultural Credit Facility of 37.5 billion disbursed by Bank of Uganda to commercial banks, only 5.5 billion has been borrowed by farmers.

“The high interest rate of 12 per cent and short grace periods of 3-6 months are constraints. So are the short-term investments the Credit Facility addresses, yet agriculture should be long term.”

Praising the idea of commodity approach as it will give small scale farmers an opportunity to benefit from government assistance, the NGOs expressed worry at the irrigation schemes that have appeared in the last three budgets without tangible action and progress.

“Only 10 per cent of civil works for the rehabilitation of Doho irrigation scheme have been done, while 15 per cent works of Mobuku irrigation scheme have been undertaken by the end of half of 2011/12.”

On the creation of employment, government intends to have an additional 3 billion for the Youth Capital Venture Fund. A graduate Venture Capital Fund is to be established with an allocation of 16 billion shillings.

The NGOs note that the current performance of the YCVF has been dismissingly low with only 8 billion utilized out of the 25 billion. The Youth have gone to the extent of demonstrating over the dilly dallying but government often giving the excuse of lack of an enabling policy. In other instances, government has been faulted over dishing out money to its cohorts even those outside the youth bracket.

“Operational modalities and clear guidelines should be developed by government on how the youth should access the funds. And this should not be left for the private sector.

Such ventures should be proposed based on clear policy frameworks. Broaden these job creation schemes and ventures to employment programs.”

In a bid to kick start the rotten health sector, government was urged to increase the percentage of allocation to the Abuja target of 15 per cent.

According to World Vision, malnutrition accounts for 60% of child mortality in Uganda. Malaria accounts for 25%.

For the Kampala City Traders Association (KACITA) spokesperson Isa Ssekitto, government is oppressing Ugandans simply to meet its selfish intentions. He was bitter that indigenous traders are deliberately being pushed out of business in favour of foreigners.

“Government is failing Ugandan traders to be importers and exporters by bringing in Asians and Chinese to do exactly that. All the small shops are now occupied by these people.

During the campaigns last year, two trillion shillings were printed without parliamentary approval. Now they come to recover the money they gave to politicians to spend recklessly, and they want to collect it from traders.”

Ssekitto further revealed that when the trades protested the increase in lending rates which was to lead to the closure of 24 per cent traders, the Bank of Uganda governor Emmanuel Mutebile arrogantly said that he will continue with those that will remain.

On the traders’ continued loss of their security to banks, the traders’ spokesperson blamed this on the greed, corruption and oppression that are synonymous with government. He said that the Islamic Bank that offers low interest rates has been frustrated to start operations here yet neighbours Rwanda and Tanzania are taking advantage of its services.

“During the Islamic Conference, an investor went to the president and expressed willingness to start the Islamic Bank but the goons including the prime minister have frustrated the venture. It is because they are promoting their own bank to rob Ugandans.

People who do not want Ugandans to access low interest loans, let alone meaningfully fund agriculture that supports 80 per cent of the population, cannot formulate a pro-people budget.”

He went on to decry the operations of the many foreign banks in the country, accusing them of having no concern for Ugandans other than milk them dry. He added that they later take the dollars out of the country. He further blamed the financial crisis in the country on the thieves in government who keep their money in dollars and under their beds, and later bank it outside the country.

Ssekitto welcomed the formulation of a bill to take care of the private-public partnership.

He added that for the last ten years government has deliberately refused to take up the country’s agricultural advantage, through the budget, in the region.

For the budget to meet the people’s expectations and challenges, the CSBAG maintains that BOU should identify the real social economic problems and address them conclusively.

The CSBAG, a coalition of 25 Civil Society Organisations formed in 2004, promotes fiscal and monetary policies that are pro-poor, gender responsive and livelihoods oriented. It also promotes transparency and accountability in the formulation and implementation of national policies, policy processes and programmes.

In the June 20 Conference, the CSBAG further faulted government on the trend of supplementary budget requests which has been on a steady increase from 4% in 2008/09 to 7.2 in 2009/10 and to 27.7% in 2010/11.

“This trend is eroding the credibility of the budgeting process, more so as a significant portion of the amounts requested for is spent on unproductive sectors like the president’s office and public administration.”

The coalition also pointed out the need to expand the tax base to include the informal sector which is engaging in import and export business as well as reviewing and streamlining tax exemption policies and practices. This, they noted, will increase revenue generation.

Introduction of Graduation Venture Fund and the commodity based approach, the one stop center for business registration and license are other areas where government was commended.

Other areas of concern to the coalition include the need to review ambitious macroeconomic targets, improve coordination of government agencies to deliver as one, harmonize fiscal and monetary policy and reduce costs of running government.

The coalition also called upon government to develop a supplementary budget policy, remove VAT on water, develop concrete policies for poverty alleviation and allocate adequate resources to rid the country of corruption.