Dec 9, 2021

Mawazo Writing Africa

Writing about the main

Uganda focuses spending on defence, energy and transport sectors

The defense, energy and transportation sectors were large, while the allocations for fiscal stimulus and domestic arrears payments in Uganda’s 2021/22 budget were given a “modest pie” to support the economic recovery through additional investment in the ongoing infrastructure projects to control.

The construction and transportation sector received $ 5.1 trillion ($ 1.4 billion) for investments in integrated transportation infrastructure with a provision of $ 400 billion ( $ 113 million) for road maintenance work in an agreement that will benefit from ongoing road construction projects in the Albertine region as the country accelerates preparations for commercial oil production, which is expected to begin in 2023.

“The enormous Funding for the transport sector is intended to accelerate the construction of the road network in the Albertine region and Erl legalize the first production of first oil by international oil companies. A combination of increased spending on these projects and early investment by the oil companies will indirectly expand economic activity and stimulate the economy in the short term, ”said Dr. Albert Musisi, Macroeconomic Commissioner at Uganda’s Ministry of Finance, Planning and Economic Development.

The Defense and Security Record received $ 6.9 trillion ($ 1.95 billion), an amount who secured the lion’s share of the country’s resources to fund planned military operations in South Sudan and the Eastern Democratic Republic of Congo (DRC), a mineral-rich trading center that borders parts of western and northern Uganda and also hosts the rebels of the Allied Democratic Forces , a terrorist group hostile to the Ugandan government.

So far, Ugandan troops have reportedly invaded parts of the eastern DRC in preparation for a military offensive, but the duration of that military campaign remains unclear. A portion of the defense budget will be used to build 30,000 housing units for military personnel.

The energy sector received $ 1.1 trillion ($ 310.9 million) for infrastructure development, of which $ 622 billion Dollars ($ 175.8 million.). ) intended for the expansion of rural electrification programs. This budget allocation apparently promises fine opportunities for energy contractors and modest financial relief for Umeme Ltd, which owes more than $ 200 billion ($ 56.5 million) in unpaid bills for subsidized rural electricity connections since 2018.

New judges

In comparison, budget allocations to the judiciary increased from 199 billion US dollars (56.2 million US dollars) in 2020/21 to 377 billion US dollars ( $ 106.5 million) in 2021-22 in a drastic move to support hiring new judges, increasing salaries and allowances for judicial officers, building new courts and purchasing new courtroom equipment. The Supreme Court jurisdiction is served by approximately 80 judges, compared to a target need of 150 judges.

In contrast, the Uganda Development Bank (UDB) received an amount of $ 103 billion ($ 29 million US dollars) allocated additional capital to lend distressed small businesses affected by the coronavirus pandemic following widespread business closings that have affected thousands of small and medium-sized enterprises (SMEs) since last year. p>

Approximately $ 400 billion ($ 113 million) was allocated to domestic arrears in fiscal year 2021/22, compared to $ 773 billion (218.4 million. The total accumulated domestic arrears value is reported Government records to date valued at $ 3 trillion ($ 847.9 million).

“The new budget is primarily driven by historical considerations and not Led by a mindset in planning a Covid-19 pandemic. This explains the increased budget allocations for the transport and energy sectors, which are intended to cover ongoing infrastructure projects despite changing economic realities, ”argued Dr. Fred Muhumuza, a local economist.

The total budget for FY 2021/22 is estimated at $ 44.7 billion ($ 12.7 billion) while the tax collection target of $ 19 trillion $ 5.4 billion in 2020/21 to $ 22.445 trillion ($ 6.3 billion) in 2021/2222 Treasury Department data. Total domestic borrowing is projected to be $ 2 trillion ($ 565.2 million) in 2021/22, while total government debt was $ 17.69 billion by the end of May 2021. The economy is expected to grow by three percent in 2020/21 and probably by 3.3. grow percent in 2021/22.