Why parliament approved Shs3.5 trillion Supplementary funding

Parliament has approved Shs3.5 trillion supplementary funding to cater for various government sectors including State House, President’s Office and the Ministry of Health.

The funds, under the Supplementary Expenditure Schedule No.1 for the Financial Year 2023/2024, were approved during the House sitting on Wednesday, 6 December 2023.

The Minister of State for Finance (General Duties), Hon. Henry Musasizi, who presented the motion for resolution of Parliament to approve the expenditure, said Shs1.9 trillion required prior Parliamentary approval while Shs1.5 trillion was within the 3 percent legal limit.

He said that the drivers of the supplementary and statutory expenditure include payment for domestic obligations to the Central Bank of Shs2 trillion.

He said that by June 2023, government owed Bank of Uganda Shs4.8 trillion which had accumulated from 2019/2020 financial year.

“You recall that in order to support the recovery of the economy from the slow down brought about by Covid-19, government expenditure was expansionary in order to provide a fiscal stimulus to various sectors of the economy. However, government was not able to fully fund its expenditures, accordingly, BOU met government obligations on domestic debt redemptions,” Musasizi said.

In the report of the Committee of National Economy presented by the Chairperson, Hon. Patrick Isiagi, out of the Shs1.9 trillion, State House got Shs441.3 billion under classified expenditure, while the Office of the President was allocated Shs26 billion for hosting the Non Aligned Movement and G77+1 summits in 2024.

The Ministry of Finance got Shs44 billion out of which, Shs13 billion will go towards supporting artists under Microfinance Support Centre.

The funds will be used for capitalization of the performing artists’ SACCO to enable them to provide financial services to stakeholders in the Creative Industry as well as support development of structures for the Creative Industry and Artists.

Compensation of the properties of the Kingdoms of Buganda, Bunyoro and Tooro have also been catered for under the Ministry of Lands, Housing and Urban Development which has been allocated Shs10 billion. Buganda Kingdom has been allocated Shs3 billion, Bunyoro got Shs4 billion while Tooro Kingdom received Shs3 billion.

Ministry of Education and Sports was allocated Shs55.7 billion out of which, Shs13.9 billion was given to Higher Education Students’ Financing Board to provide loans for new students. Shs17.6 billion will be used to complete phase one of renovation works at Mandela National Stadium while Shs24 billion was allocated as additional funding to enable Uganda to host the African Cup of Nations and African Nations Champions.

Shs9.8 billion was allocated to Ministry of Health to cover Pay as You Earn for Medical interns to ensure that each intern and senior house officer receives a net allowance of Shs1 million.

Isiagi said that the source of funding for the supplementary is Non Tax Revenue, domestic borrowing and external financing.

There was however a minority report authored by Hon. Gorreth Namugga (NUP, Mawogola County South), Hon. Patrick Oshabe (NUP, Kassanda County North) and Hon. Muwanga Kivumbi (NUP, Butambala County).

Hon. Oshabe said that there are several entities that missed allocation of funding owing to budget ceiling yet they have not been catered to in the supplementary.

“For example, the nursery operators who supplied coffee and tea seedlings. We are concerned that supplementary budget requests are a conduit for misuse of tax payers’ money,” he said.

He was also against the additional allocation of Shs441.3 billion to State House.

Speaker Anita Among tasked the Minister of Finance to commit to provide funds for nursery bed operators.

“We need a commitment from the Minister that the funds for nursery bed operators will be captured in the Budget Framework Paper,” she said.

The Minister of Finance, Matia Kasaija pledged to provide the funds in the 2024/2025 budget.