MAKING THE NATIONAL BUDGET PRO-POOR, GENDER SENSITIVE AND EQUITABLE
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- Milton Franklin
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1 Civil Society Budget Advocacy Group (CSBAG) Pre Budget Dialogue MAKING THE NATIONAL BUDGET PRO-POOR, GENDER SENSITIVE AND EQUITABLE 15 th April 2011, at Hotel Africana
2 Table of Contents: ACRONYMS: Introduction Opening Remarks by Ms. Kirabo Agnes -Board Chairperson, PELUM Uganda Key Note Address -Ministry of Finance, Planning and Economic Development 6 Increasing agricultural productivity: 7 Improving access to gainful employment in hi-tech and industrial development: 7 Strengthen Governments physical and economic infrastructure: 7 Suggested remedies to agriculture sector; Presentation of CSBAG Position Paper- Mr. Mukunda Julius Senior Program Director, FOWODE Macroeconomic management; Resource allocation and the MTEF; Domestic Revenue generation; 9 These are the sectors that this paper looked at: Education, Health, Agriculture, JLOS, Water and Environment, Trade, Works and Transport EDUCATION: Inadequate infrastructure; HEALTH: Drug stock Inadequate staffing; Inadequate Health Infrastructure; WATER AND ENVIRONMENT: Inadequate budget allocation; Low absorptive capacity and limited institutional capacity to deliver on budget priorities AGRICULTURE: Value Addition Access to credit; WORKS AND TRANSPORT: Inadequate funding for district urban and community access roads; Confusion over mandates among sector agencies; High cost of construction and maintenance; JUSTICE, LAW AND ORDER SECTOR: 13 CSBAG RECOMMENDS THAT: Budget Governance and Budget Indiscipline Response to the paper by The Commissioner, Budget Policy and Evaluation Department -MFPED Comments and reactions to previous speakers: Strategic Budget Priorities for FY2011/12 17 Binding Constraints to be addressed in FY2011/12 Budget Strategy Key concerns Raised and responses Reactions by Mr. Mugambe Kenneth to the Position Paper: 18 Sector Conclusion Recommendation 2011 Civil Society Budget Advocacy Group (CSBAG) 6.0 Discussions and Way forward 20 Questions 20 Way forward 22 Appendix 1; List of Participants 23
3 ACRONYMS: ACTADE ACODE BTVET CEWIGO CHOGM CSBAG CSOs ENR FOWODE MDGs HURINET MFPED MoWE NAADS NBFP PEAwP PELUM SEATINI SFG USE UBOS UDN UNRA VEDCO African Center for Trade and Development Advocate Coalitions for Development and Environment Business Technical and Vocation Education and Training Center for Women in Governance Common Wealth Heads of Government Meeting Civil Society Budget Advocacy Group Civil Society Organizations Environment and Natural Resources Forum for Women in Democracy Millennium Development Goals Human Rights Network - Uganda Ministry of Finance, Planning and Economic Development Ministry of Water and Environment National Agricultural Advisory Services National Budget Framework Paper Poverty Eradication Action Plan Participatory Ecological Land Use Management Southern and Eastern African Trade and Negotiations Institute School Facilities Grant Universal Secondary Education Uganda Bureau of Statistics Uganda Debt network Uganda National Roads Authority Volunteer Efforts for Development Concerns 1.0 Introduction The dialogue started at around 9:00am, with introductions from the audience. Mrs.Lydia Rugasira who was the moderator for the dialogue said that the introductions reflected a good representation of the public. She also said that CSBAG aims at using a bottom up, top-bottom approach and engaging consultations at every stage of the process. Ms. Kirabo Agnes in her opening remarks highlighted that a big percentage of the population both in absolute and real terms is living under the poverty line and smallholder farmers have a limited capacity to feed the nation. Mr. Mukunda Julius said that since the involvement of the civil society, there has been an increment in the funds allocated to works and transport sector and the education sector though allocations to agricultural and health sectors still remain low at 4.9% and 8.7% respectively. He also re-echoed Agnes concerns that Uganda s social development indicators such as infant, child and maternal mortality rates remain among the worst; in the world implying that Uganda will not meet most of the MDGs targets by Analysis of the budget priorities for FY 2011/2012 reveal profound similarities with those of the previous financial year and the concerns raised in the earlier paper are still valid. For instance, the high cost of running the government reflected in the escalating allocation to the Public Administration and Public Sector Management. Mr. Kenneth Mugambe, the commissioner for MFPED, said that strategic interventions have been set to tackle challenges in the relevant sectors but not all outlined challenges can be met with current resource envelope. He also recommended that this kind of dialogue should be cascaded down to other sectors and local government in order to empower them to monitor performance at the grass roots. 2.0 Opening Remarks by Ms. Kirabo Agnes - Board Chairperson, PELUM Uganda After greeting the audience and observing all protocol present, Ms. Kirabo said she was honored make these opening remarks on behalf of CSBAG. She said CSBAG is a loose coalition of national organizations in Uganda currently celebrating seven years of ensuring that the concerns of the poor and all gender issues are incorporated into the national budget. Ms. Kirabo said that the dialogue was able to take place due to the concerted efforts of a group of people who Figure 1: Ms. Kirabo Agnes. Board Chairperson, PELUM Uganda giving opening remarks spared time over the weekend at Colline Hotel Mukono to discuss sectoral issues which were drafted into a position paper. These include; ACODE, FOWODE, UDN, PELUM Uganda, Uganda National NGO Forum, HURINET, Environmental Alert, ACTADE, the Hunger Project Uganda, UCSD, VEDCO, CEWIGO, SEATINI, CONCERN Worldwide and many others who deserve recognition. She said that it was a memorable day in which people had set aside time and other resources to discuss the budget. She also said that the meeting had been convened on 15th of April 2011, when the country is experiencing a 30-40% increase in food prices as well as high fuel prices. People are relocating upcountry, domestic violence is escalating, schools are experiencing strikes due to poor diets and graduates being churned out of higher institutions are more of professional than skilled. The rate of maternal mortality rate is high and the country is at a slow pace of reaching the millennium development goals. This can be evidenced; by the high infant mortality rates, the low percentage of children gaining access to good quality education, big percentage of the population both in absolute and real terms living under the poverty line and smallholder farmers have a limited capacity to feed the nation. Ms. Kirabo said that the cause for the dialogue was therefore perfect and there is still hope for change. As long as we can still speak and write, we shall do so in order to further this cause said Ms. Agnes Kirabo. 3.0 Key Note Address -Ministry of Finance, Planning and Economic Development P rofessor Kamuntu said that as members of the audience introduced themselves, it created in him an impression that this was one of those great meetings 4 5
4 where people have shown interest in discussing how national resources should be allocated. I am impressed that every District is represented and there is a wide range of interest groups right from; students to civil society organizations which was quite important said the minister. He thanked CSBBAG for putting together such a group and for all the efforts they have made to ensure that the concerns of the target group which includes the poor are incorporated in the budget. We share the interest that the budget should be equitable and aimed at addressing the needs of all groups of people in the nation he said. He assured the audience that Mr. Mugambe Kenneth, the commissioner would capture and forward all the relevant concerns and have them reflected in the budget process. He was of the view that the meeting be more constructive rather that defensive and provide for alternatives rather than criticisms. He said that the country has achieved commendable economic growth for the last two decades and is currently poised for better economic take off. Concentration and focus is needed in order to achieve the vision of transforming this nation from a predominantly peasantry income earner to a middle income earner. According to the MDG assessment report, Uganda has made progressive efforts to improve the percentage of people living below the poverty line. The third progress report on MDG for Uganda also shows that the country has made great progress towards achieving the millennium development goals by reducing the percentage of population suffering from hunger, ensuring gender empowerment and equity especially for women. The government has also reduced parity between girls and boys in school as well as increased access to safe water. The minister said that the government of Uganda is also committed to promoting gender empowerment. This is evidenced by its being a signatory to various treaties that are gender friendly and the presence of a gender policy development framework. In the NDP, gender issues and constraints are defined, one of the outstanding challenges is the low percentage of women involved in decision making at the household level and gender violence which stands at 40%. However, there has been notable progress. The ratio of girls to boys in school has reached one which has come as a result of massive government programs that favor girl child education. Even in secondary and higher institutions of learning, the enrollment of girls is good. In the recently concluded graduation ceremony at Makerere, the percentage of girls that graduated was high. Professor Kamuntu suggested that the civil society commends the government it makes such statistically evident achievements. The Minister said that the country continues to face economic challenges and structural bottlenecks with binding constraints which once tackled, will solve the challenges. He highlighted the following; Increasing agricultural productivity: Measures have been proposed to expand agricultural production and change how it is done. Initially it has been rain fed, hand hoe driven and with minimum fertilizer application. There is necessity to make use of phosphate minerals in the country to produce fertilizers and to make use of improved seeds. In the NDP, Agriculture is considered as a York in an egg because as a York is to an egg so is agriculture to economic development of the nation. Improving access to gainful employment in hi-tech and industrial development: This shall be achieved through mass education of the population and by encouraging the people to use their creativity and innovativeness to create jobs. Government may be limited in its capacity to create jobs so the problem needs to be dealt with holistically and in partnership with the civil society. Strengthen Governments physical and economic infrastructure: There are roles and responsibilities that government cannot delegate e.g. security, law and order, management of currency and development of infrastructure. Development of infrastructure is vital for the development of other sectors in the economy, and Government commits to do the following; Substantially increase investment especially to unlock access to energy Improve transport infrastructure since more than 90% of the cargo in the country is carried by road transport. Massive tarmacking is going on. The government has imported construction units for various districts and plans are underway to improve rail networks so as to decrease the cost of doing business. Major emphasis in the next budget will be placed on the highways between Kampala, Entebbe, Jinja and Mpigi, road networks in mining and tourist target areas, national district and access roads, key bridges and rail network for Kampala/Malaba and Tororo/ Pakwach. Construction of oil refinery in Albertine region CSBAG should be aware that resources are being diverted to infrastructure development which is the pivotal point for development in other sectors. Figure 2: Prof. Ephraim Kamuntu, Minister of State for Finance Economic planning and Development In the agricultural sector, commodity value addition and agro processing is another area that needs joint discussion by the civil society and government. Emphasis should be placed on agro-processing not just to increase shelf life but also reduce post harvest losses which is at 40%. Value addition and this will also reduce poverty levels. Human capital development; in ultimate terms the whole purpose of government is to build the capacity of its population. This is to be achieved through; increasing access to free universal primary and secondary education. Emphasis will also be placed on technical training, vocational and universities. The government will also provide personnel and infrastructure to support the education sector. Suggested remedies to agriculture sector; In order to boost the economy, agricultural production must be increased through improving agricultural skills of women. Both the civil society and government should embark on this because the country has a liberalized economy. 4.0 Presentation of CSBAG Position Paper- Mr. Mukunda Julius Senior Program Director, FOWODE Mr. Mukunda Julius; presented a position paper on the National Budget framework paper FY 2011/12 FY 2015/16. He said in his presentation that; this paper was prepared by the Civil Society Budget Advocacy Group (CSBAG), to ensure that the views and concerns of the poor people and gender concerns are incorporated into the national budget priorities. He further informed the audience that; this position paper was developed under a collective framework with substantive contributions from PELUM Uganda, FOWODE, UDN, ACODE, Uganda National NGO Forum, HURINET, Environmental Alert, ACTADE, the Hunger Project Uganda, UCSD, VEDCO, CEWIGO, SEATINI, CONCERN, all these and many others are members of CSBAG. A number of achievements have been realized since the involvement of the civil society. Some of these include the increased allocation to works and transport sector (14.4%) and the education sector (15.9%). However, allocations to agricultural and health sectors still remain low at 4.9% and 8.7% respectively. Uganda s social development indicators such as infant, child and maternal mortality rates remain among the worst, in the world implying that Uganda will not meet most of the MDGs targets by Mr. Mukunda Julius mentioned that; the analysis of the budget priorities for FY 2011/2012, show profound similarities with those of the previous financial year and the concerns raised in the earlier paper are still valid. For instance, the high cost of running the government, which is reflected in the escalating allocation to the Public Administration and Public Sector Management, this takes over quarter of the entire national budget. The position paper highlighted views with regard to Macroeconomic Management, Service Delivery sectors, Infrastructure, Environmental issues as well as budget governance issues. 4.1 MACROECONOMIC MANAGEMENT: It was proposed that there be a departure from the prevailing neoliberal macroeconomic framework, by introducing two major alternative economic models that could be successful by tapping into the country s full economic potentials. These include a managed exchange rate to promote competitiveness and currency stability as well as a monetary policy that supports fiscal expansion and export promotion by achieving real rates of interest for private investment Resource allocation and the MTEF; It was noted that the budgetary allocations are not consistent with government commitment to enhance economic growth. The household incomes, through increased production and productivity are largely recurrent in nature of the budget. Large portions of the budget earmarked for less poverty reduction spending such fighter jets, expensive vehicles and bloated public administration wages. There is, therefore, a need to overhaul the entire national budget in order to make it development oriented. 6 7
5 4.1.2 Domestic Revenue generation; Despite Uganda being ranked among the best performing economies in the region, the growth in domestic tax revenue has hardly kept pace with the growth of the economy. Key factors affecting revenue generation performance include; Lack of a clear comprehensive policy on taxation and revenue generation Lack of a clear policy and/ or guidelines on tax incentives and waivers Tax avoidance and evasion, corruption and leakages in tax management have continued to hamper the growth of the country s tax revenues. A request to the Government was made by the civil society, to develop a comprehensive taxation policy to guide taxation in Uganda. The comprehensive review all tax policies so as to identify ways of achieving the objectives of adequate revenue, economic efficiency, and provision of equity as well as effective tax administration is a necessity. It was suggested that in the upcoming budget, government should reduce taxes on petroleum products which could effectively reduce costs of fuel and instead re-introduce some on the direct taxes like vehicle road license and road user fees. These are the sectors that this paper looked at: Education, Health, Agriculture, JLOS, Water and Environment, Trade, Works and Transport. 4.2 EDUCATION: CSBAG commends Government for introducing UPE and USE that; has seen enrolment rates increase tremendously. There are concerns that the sector is putting less emphasis on funding skills development, in that technical and vocational training are only getting only 2.2 per cent of the sector budget. There is also a concern about the poor quality of education; inadequate facilities for children with special needs; inadequate infrastructure; and insufficient community participation in school management. Most of the budgetary allocation goes to salary and wages. In addition, the completion rates in primary schools for girls are very low standing at 48 percent and 55 percent for Boys. This means that half of the entire population of children who begin P.1 cannot complete P.7. Given the huge amounts of resources spent in this sector, CSBAG recommends that; the government to should come up with concrete proposals on how to address these teething challenges. For instance, government should consider increasing the UPE capitation grant for pupils from 6,000/= to 10,000/= to enable schools run effectively. It also proposed that; instead of training inspectors from abroad, the sector trains them from within the country to minimize on costs and relocate the funds to underfunded activities in the sector. The sector should finalize the SNE policy during this Financial Year and provide sufficient funding for SNE Inadequate infrastructure; This continues to affect the quality of learning in all UPE schools, yet the Government tremendously reduced funding to School construction through SFG from 2.08 bn in FY 2010/11 to in the FY 2011/12 proposed budget. Pupil classroom ratio of 72:1 (2009) as per the NDP is still high to accord pupils conducive learning environment. The situation is worse at lower levels where 50% of the pupils enrolled do not have sitting and writing space. 4.3 HEALTH: Figure 3: Mr. Mukunda Julius, Senior Program Director, FOWODE Uganda has been one of the pioneering countries, in undertaking health sector reforms within the framework of decentralization. In addition, Primary Health Care (PHC) and Minimum Health Care Package (MHCP) were introduced and have significantly contributed to improving the health of the population. A big percentage of the budgetary allocation still remains at the local government to cater for wages. The health sector has been affected by the following factors; Drug stock out at health facilities has been identified as a key issue in service delivery; A request was made to the government to increase funding to pharmaceuticals and Medical supplies by at least 10% to cater for inflation. Government should also allocate additional funds to National Referral Hospitals, Health Supplies to LG Units, General and Regional Hospitals. In addition, the basic kit for HC III and II should be reviewed to ensure that the drugs supplied match the need/disease burden Inadequate staffing; Availability of health workers at Health Units has been cited as a major impediment to service delivery. The NBFP indicates that the percentage of approved positions filled by qualified health workers was at 53% in 2010 falling short of the target of 65% of the HSSPII. It is for this reason that we suggest a target of 70% on this indicator and consequently the inclusion of UGX 36 billion needed for PHC wages to districts as well as UGX 1.8 billion for recruitment of health workers which has been put under unfunded priorities. Recruitment of health workers at regional referral hospitals could be stalled but not at lower Health Units Inadequate Health Infrastructure; The facilities at health Centres particularly Health Centre IVs negatively affect the delivery of health services. For instance the level of functionality of theatres and maternity wards greatly impact on indicators of maternal health care. A request was made to the government to increase the development expenditure to meet the increasing demand at LGs. 4.4 WATER AND ENVIRONMENT: The Water and Environment sector is challenged by the following critical budget issues which if not addressed would undermine sustained socio -economic transformation in the country: -Limited resources allocation and re-investment at both local and national levels; -Poor governance in the implementation of policies and programs in the sector and -limited capacity of CSOs both financially and institutionally to participate effectively in monitoring sector performance among others Inadequate budget allocation; Despite the sector s contribution to the national economy and livelihoods, it remains the least funded. The situation is amplified at local governments where the allocation to ENR ranges from 0.5 per cent to 1 percent. This gross under-funding has resulted in mal-functional institutions which can never deliver effectively on their plans because of limited resources and poor policy implementation, monitoring and law enforcement overall. We therefore recommend that Government prioritizes water and environment sector in planning and budgeting. In addition, ENR issues should be mainstreamed in all sectors. The civil society appreciates the fact that Government is putting more emphasis on energy. This allocation will help to solve the county s energy deficiencies which have historically paralyzed the water and environment sector resulting to increased deforestation. However, the implementation of Environmental Impact Assessments (EIAs) needs to be highly considered to ensure that energy production does not negatively affect the sustainability of our environment Low absorptive capacity and limited institutional capacity to deliver on budget priorities According to the NBFP March, 2011 (page 54), there is a significant disparity between approved and released funds. For instance UGX billion was approved, but only UGX billion had been spent by December We recommend that the sector enhances its staffing level of all its agencies such as Forest Sector Support Department (FSSD) and Climate Change Unit (CCU). In addition, the sector needs to enhance its capacity of the technical staff to ensure timely execution of roles and responsibilities. 4.5 AGRICULTURE: It s a well known fact that agriculture is the engine of Uganda s growth and poverty reduction. Despite the fact that the share of the Agricultural sector in Uganda s total Gross Domestic Product (GDP) has been declining from 39.9% in 2001/02 to 15.4% in 2008/09, the sector still employs majority of Ugandans and most people derive the livelihood from agriculture Value Addition The National Budget Framework paper ( p.83) states that despite the increasing demand for value added agricultural products and commodities, Uganda still registers only 5% of value added products and commodities. Poor coordination among different chain actors, low capacity of farmers to effectively participate and benefit in the chain, and limited access to affordable equipment and machinery has made value chain addition for small scale farmers a nightmare (PMA, Financial year book, 2009, pg 11). A request was made to the government to reduce the cost per unit of electricity and other energy sources to make it affordable agro-processing affordable. Government should also explore and invest in alternative sources of energy like, bio gas, solar and wind energy. In addition, government should subsidise agriculture equipments for both inputs and outputs markets. Furthermore, government should re-introduce national food reserves through allocating resources to finance its re-establishment and operation. 8 9
6 It was recommended that at least 20% of th1e total research allocation should be earmarked to multiply and disseminate research findings and that government needs to consolidate all the research funding that are scattered into various ministries and agencies into one research agency to constitute a national research agenda Access to credit; Despite the fact that farmers cite shortage of capital and credit as their single biggest constraint to improving farming, government has not provided adequate funding towards improving access to credit by farmers (Benin, S., et al, 2007). Only 4% of the PMA funds are allocated towards rural finance services, which include increasing access to credit. Most farmers fear to get loans because of harsh treatment of that defaulters get, also the repayment period that does not coincide with the harvest season. In addition, the money allocated in the budget for lending to agriculture such as the UGX 30 billion in FY 2009/10 (MFPED, Budget Speech, FY 2009/10), is not readily available to the intended people. It seems to benefit the elite and progressive farmers, but not the small scale farmers. It was also therefore recommend that Government allocates earmarked funds for lending to small scale farmers, exploit the possibility of establishing an Agricultural Bank that will explicitly focus on farmers credit needs, hedge against risks like crop failures and volatilities in the prices of agro-products. 4.6 WORKS AND TRANSPORT: The works and transport sector budget was increased tremendously over the last three financial years after years of neglect. However, absorption capacity remains a key challenge for the sector. The sector was commended for reducing expenditure on Government Buildings and Administrative Infrastructure by a tune of UGX billion and for increasing expenditure on rehabilitation of Upcountry Aerodromes especially upgrading Kasese Airstrip to Airport status. The government was also commended for its emphasis on improving the road network in Uganda, through the construction of superhighways. However, the current challenges in transport sector cannot be solved by constructing superhighways, but rather by improving the existing roads (completion of the Northern by-pass and maintenance of Kampala city roads) and revamping of the railway network. CSBAG requests government to divert the recent US $ 380 million loan that was approved by Parliament for the construction of the Kampala- Entebbe superhighway to revamping the Kampala Malaba railway network Inadequate funding for district urban and community access roads; A concern was raised on the fact that the Local Governments which are at the centre of stimulating rural economy are least funded with UGX bn compared to the central government allocation of UGX 118 bn. The situation of low funding is worsened by the recurring creation of new Local Governments (Districts, Municipalities, and Town Councils). In an effort to overcoming poor road maintenance due to inadequate funding, the Road Fund should by way of amending the URA Act should be enabled direct transfer of user charges to URF account to allow more and consistent disbursement to the LGs Confusion over mandates among sector agencies; The relationship between the URF and UNRA is unclear; especially on how the two institutions relate with each other and even their mother ministry. For instance, the MoWT has continued to carry out construction works, repairs and maintenance despite the existence of other semi autonomous bodies directly charged with this mandate such as UNRA. This has led to allocation inefficiencies due to duplication of responsibilities among the sector agencies. Due to the existence of UFR and UNRA, the mandate of MoWT, should be revisited with a view to rationalizing expenditure and prudent utilization of public resources High cost of construction and maintenance; Poor contract management in the roads sector has resulted in stalling of the Sector s projects at all levels. This is explained by the very poor performance of the road sector (GoU, GAPR FY 2009/10). Some road repairs have not been completed due to purported delayed payments to contractors. This is causing the roads to deteriorate and escalating the costs of completing the works (Auditor General Report on CHOGM 2009). This could be avoided if proper arrangements were made to clear contract payment obligation on time. The Ministry should further come out with measures to ensure value for money when awarding contracts for road maintenance and construction. This may be achieved through initiating policies that will build the capacity of the players in the delivery of good quality roads. Such players include consultants, contractors and providers of construction materials and services. JUSTICE, LAW AND ORDER SECTOR: Safety, security, justice and constitutional development are critical for poor people, as they are most vulnerable to crime Challenges A shortfall in investigation and prosecution; this is due to limited resources (fuel, cars, stationary), inadequate capacities of the investigators and state attorney, inadequate motivation of the staff (allowances, awards) and corruption. Inadequate information accessibility by the public; this is due to unclear systems to access the information and public ignorance of the sector. Inadequate staffing in the judiciary due to low budgetary allocation to recruitment, limited motivation and brain drain. Poor implementation of the existing policy and legal frame work in the sector; There is limited access to justice due to procedures/long process/bureaucratic tendencies, corruption, generative ethical code of conduct, under staffing, inadequate supervision (DPP, judiciary, police, prisons etc), lack of gadgets to cater for the impaired people and lack of rights based approach (especially for vulnerable groups i.e. PWDs) Limited infrastructure development in the sector (police, prisons) due to inadequate budgetary allocation for the development of infrastructure in the sector Despite all the above-mentioned challenges, the proposed budget cut (from UGX bn in the previous financial year to UGX bn in FY 2011/12) is likely to affect the performance of the sector especially access to justice for all Ugandans. CSBAG RECOMMENDS THAT: Government prioritises increasing budget allocations to the sector to cater for civic education on rights and crime prevention, to recruit more judicial officers (Magistrates, Judges) and state attorneys /prosecutors. The sector allocates more funds towards procuring better IT systems for better evidence collection, storage and management; this portion should also cover training of the required personnel. The sector reallocates part o the UGX 20 billion for recruitment for police constables as allocated in FY 2010/2011 to also cater for investigation to boost evidence collection for better dispensation of justice. The sector increases allocations to the prisons services from 15% 2010/2011 by at least 20% to cater for transportation facilities. The sector increases funding towards supervision and monitoring for all the JLOS sectors to ensure effective and efficient deliverance to justice Budget Governance and Budget Indiscipline The inability to use the budget as a development policy instrument to achieve dramatic and measurable progress in key priority sectors is inherent in the nature of our budget governance and the apparent budget indiscipline. There are at least five critical areas that undermine effective budget governance in Uganda. Authority and control over the budget The Executive arm of Government exercises near absolute control over the way national budget resources are appropriated and utilized. In the majority of cases, Parliament which is supposed to be the guarantor of public interest with regard to public funds acts as a spectator or is sometimes an accomplice in budget abuses. It is believed that the passage of the recent supplementary budget was such a case. A realignment of budget priorities without ensuring appropriate checks and balances over the budget between the executive and the parliament will not yield meaningful results. The concept of participatory budgeting has more or less been abandoned or at least only exists as a ritual. This is evident from communities across the country. Budget Indiscipline; The major challenge of effective alignment of the budget with NDP priorities affected by gross budget indiscipline that has been displayed by Government over the years. The following areas of indiscipline are particularly noteworthy: Supplementary Expenditures; Government is using the supplementary budgets as a mechanism for diverting resources away from agreed priorities in the National Development Plan and development partners (under the Joint Budget Support Framework). The last two FYs have seen large supplementary budgets approved by Parliament amounting to UGX 500bn in FY 2009/10 and UGX 602 bn (schedule I) and UGX bn (schedule II) in Parliament for approval in FY 2010/11. The supplementary budget is not in favour of the service delivery sectors. Instead, the sectors benefitting from supplementary budget are mainly Security (defence), Public Administration (State House and Office of the President), and Justice, Law and Order (Uganda Police). Off budget spending; In addition to supplementary budget, we concerned about the increasing off budget expenditures. According to recent reports, US $
7 million (UGX 550 bn) was spent in FY 2009/10 and US $ 440 million (UGX 1.01trillion) in FY 2010/11 has already been spent to purchase fighter jets without Parliamentary approval. This kind of expenditure is more than the combined total annual budget for health and agriculture. High cost of running the Government; The rapid growth in Public Administration expenditure from 14.4 per cent in 2002/03 to 25 per cent in 2011/12 is a major concern in the budget-making process in Uganda. The creation of new local governments, political appointments, widening public service including members of parliament, increasing appetite by most top government officials to live luxurious life is undermining the need to allocate sufficient resources for investment and production. Consequently, the budget which should be an instrument that reflects the strategic development priorities of Government and the county is being reduced into welfare programmes and responses to political constituencies (Mwenda, 2006). The mushrooming of new districts even when done in the name of taking services to the people is one of the causes of the escalating costs of public administration expenditure. The number of Members of Parliament in Uganda is excessively high compared to our neighbouring countries and the proposed expenditure of UGX bn in FY 2011/12 is too high. This kind of spending is unsustainable and should be tamed. 5.0 Response to the paper by The Commissioner, Budget Policy and Evaluation Department -MFPED 5.1 Comments and reactions to previous speakers: Mr. Mugambe said the MFPED does appreciate the contribution of the civil society because they do bring to table issues that the government would otherwise take for granted. He also commended the fact that the dialogue took place at a timely period and consisted of a broader network with representation from wider geographical locations of Uganda unlike the previous years. Mr. Mugambe said that there was a high degree of convergence between the government and civil society on achievements and challenges to be tackled as reflected in the position paper presented earlier by Mr. Mukunda. This creates a leveled ground for solving challenges and hence the next step in the participatory process is to agree on common strategies to solve challenges. The position paper that was presented took into consideration two budgeting principles namely allocative efficiency and operational efficiency. It is clearly spelt out in the earlier sections of the paper that alloactive efficiency has been achieved while operational/technical efficiency is still a challenge. Once the money has been allocated to the broad sectors, it is essential to monitor and ensure that the money is used for the exact intentions it was allocated for. This is an area that the civil society could take interest in by becoming a voice to the ordinary person to monitor the activities at the grass roots. The MFPED does advocate for the open budget index and intend to make initiatives to make the budget more open. Efforts are underway to make simplified forms of performance reports and budgets that are compliant with the lay man s language. From the budget framework paper, the number of people living below the poverty line has decreased despite the high population growth rate. With regard to the low absorption rate of funds in some sectors, this can be attributed to the limited capacity of the key service delivery institutions. Ministry of works and transport had limited capacity to adequately use the funds availed to them but has now registered improvement. The National medical stores are still lagging behind in this area. 5.2 Strategic Budget Priorities for FY2011/12 The budget strategy for FY2011/12 is to provide firm link between NDP and SIPs under theme: Strategic Priorities to Accelerate Prosperity for All through Infrastructure Development and Job Creation. It is important to note that a plan does not create resources but acts as a road map/guide. Northern Uganda has been having a major effect on the poverty average of the nation due to the insurgence. However, since the insecurity ceased, the people are now engaging in income generating activities. Emphasis will be placed on unlocking binding constraints to accelerate growth, development, and realisation of NDP objectives in the upcoming budget. This will be achieved through strategic priority interventions identified in NDP and creation of jobs to address youth unemployment. Binding Constraints to be addressed in FY2011/12 Budget Strategy Constraint: Inadequate infrastructure Interventions in FY2011/12: Figure 4: Mr. Mugambe Kenneth, Commissioner, Budget Policy and Evaluation Department -MFPED Expedite work on flagship energy generation projects such as Karuma, Ayago and Isimba Construction of oil refinery Construction of expressways between Kampala and Entebbe, Jinja and Mpigi; Uganda investment authority did a study on constraints to doing business in Kampala and the suburbs and found traffic jam to be a major constraint which necessitates the construction of the above expressways. Standardised gauge railway between Kampala and Malaba and rehabilitation of the Tororo/Pakwach railway to facilitate transportation of oil. Constraint: Skills gaps in labor force Interventions in FY2011/12: -- Integrate vocational skills training at primary and secondary levels to provide appropriate skills. -- Create resource pool of indigenous expertise in oil sector -- Extension of free Universal education to post O-level, BTVET and technical education -- Support private sector vocational institutions. Constraint: High youth unemployment Interventions in FY2011/12: -- Undertake flagship infrastructure projects and support agro-processing for job creation -- Apprenticeship program for youth in local manufacturing enterprises across the country Roll out the Pilot enterprises of the BEST program of Enterprise Uganda Constraint; Inefficiency in Government operation Interventions in FY2011/12: -- Improve coordination and strategic leadership across GoU. A proposition has been made that at the beginning of next year, all key managers including commissioners shall be employed on a performance contract. -- Prioritize productive expenditure and reduce wasteful consumptive expenditure. Proposals have also been made on limiting consumptive expenditure which takes a lion share of the supplementary budgets. -- Strengthen accountability and oversight role of anti-corruption institutions. The creation of new districts does not necessarily bring resources closer to the people but rather puts a strain on existing resources and the qualified personnel are also limited in number. 5.3 Key concerns Raised and responses Poor domestic Resource Mobilization Unlike the comments made in the position paper, the existing economic policies have benefited the nation in terms of inflation and exchange rate though more must be done to reduce poverty, improve infrastructure and delivery of public services. The greatest challenge how ever has been faced during the implementation of the programs and projects. There is marked improvement in domestic resource mobilization as evidenced by the fact that 70%of the budget is funded by locally generated revenue. Worrying trend of increasing size of public administration budgets and low share of service delivery sectors. The ministry is attempting to strengthen the link between plans and budgets Declining credibility of planning and budgeting process, and abuse of supplementary budgets. The public finance (management and accountability) act has been suggested which will make it difficult to ask for a supplementary budget. Inadequate allocation of resources in key areas which target pro-poor growth in spite of NDP e.g. limited funds for health and education infrastructure and lack of prioritization of DUCAR roads Reforms have separated policy making, implementation and financing into separate departments. This also applies in the aspect of road maintenance. The Ministry of works is in charge of policy making and monitoring while implementation is being phased out to UNRA
8 5.4 Reactions by Mr. Mugambe Kenneth to the Position Paper: Sector Concerns Proposed Interventions Education Sector Health Sector Water Sector Agricultural Sector Works and Transport Sector JLOS (Justice, law and Order Sector) Skills shortages in science and technology low education standards Drug stock outs Poor Remuneration Inadequate infrastructure Poor r Inadequate allocation to environment low absorptive capacity Low access to inputs and credit Additional support to research required Inadequate funding for DUCAR, high unit costs, lack of prioritization of non-road transport Proposed budget cut in FY2011/12 Insufficient personnel to deliver justice Skills gaps to be met by scaling up technical and vocational education, e.g. in oil sub-sector Strengthen priority of inspection to improve standards of education provision Continued funding of the Faculty of Food Science and Technology at Makerere University Extension of Universal free education to include higher, technical and vocational education Focus on turning education leavers into job creators, not job seekers 1. Increased funding for drugs and basic medical equipment provided in FY2011/12 2. Recruitment of key medical personnel to be prioritized, coupled with improved pay 3. GoU will improve the referral services through continued rehabilitation and equipping of the Regional Referral Health facilities 1. Absorptive capacity of Votes a concern across Government. Amendment of PPDA Act will reduce procurement delays. 2. Allocation to natural resource management under MoWE to be increased in FY2011/12. Conditional grant for LG for Natural Resource Management will be maintained Agricultural technology development and enhancement Strengthening linkages between agricultural research and extension services Sustaining of the recently established Agricultural Credit Guarantee Scheme Strengthening the incentive scheme for agricultural exports Improved maintenance of district urban and community access roads taken over by Central Government High unit cost to be addressed by MFPED and value for Money will be prioritized across Government. Commence action on building a standardized gauge railway Kampala- Malaba and rehabilitation of Tororo-Pakwach line. Additional funding in FY2010/11 to sector for capital expenditure on election management, not required in FY2011/12 Allocation to judiciary and sector as a whole to increase over medium term 5.4 Conclusion Budget strategy of FY2011/12 aims to address binding constraints in order to realize NDP goals Strategic interventions in the relevant sectors will target these challenges, but not all outlined challenges can be met with current resource envelope Overall, strategy is grounded in drive to improve efficiency of resource allocation and utilization 5.5 Recommendation This kind of dialogue should be cascaded down to other sectors and local government in order to empower them to monitor performance at the grass roots. 6.0 Discussions and Way forward Questions 1. Why was water for production not captured in the budget yet towns like Kasese have one irrigation scheme and it is endowed with many rivers? 2. Does the Ministry of FPED have a control mechanism with regard to absorption of budget funds with respect to the time period? 3. What measures has the government put in place to ensure time saving and efficient procurement procedures? 4. The presentations have confirmed that a big portion of the budgetary allocations goes to education yet a proposition has been made that government sponsorship at Makerere University be abolished. Why is this so? 5. The fortnightly change of guidelines for NAADS is an inconvenience. Can government put in place controls for that? 6. Why doesn t the MFPED champion the cause for government agencies to expand the Kampala city and its road networks whose current state has become a bottleneck to development? 7. The government earns a sizeable amount of revenue from the fisheries sector but why is it marginalized in the budget? 8. I request that the government deducts taxes on fishing equipment and life saving jackets. It should also offer subsidies to fishermen in order to avoid exploitation of resources? 9. Maternal and infant mortality rates are so high due to poor facilities especially in Katakwi District. Is there a possibility of the government availing an ambulance? 10. The ministry of education and sports should consider investing in building schools for teachers 11. The position paper presented indicates a reduction in the budgetary allocation of the health sector. How will the costs of the Health sector be met? Responses The strategies for water include water for human consumption and water for production. Valley dams had become controversial due to change in dynamics in regions like western Uganda where land is now privately owned. The government though the ministry of Agriculture Animal Industries and Fisheries in collaboration with UWA is working out a strategy on how to facilitate local farmers to build their small personal valley damns. Mr. Mugambe Kenneth The government is also taking into consideration the delivery of water through a gravity flow scheme in mountainous areas. About two years ago the government put in place a performance based budgeting system. All managers including all commissioners are required to sign a performance contract. Money is currently being released at a quarterly basis by the 10 th of the first month of the quarter. For instance the funds for April, May and June have already been released. The condition for release of money for the next quarter is the submission of a performance report of the previous quarter. A budget monitoring and accountability unit has been put in place that does on spot visits on a circle basis to verify the performance reports. After six months, the government organizes a retreat to generally assess performance using color shades (green, orange and red). Barazas were also introduced last year with the intention of enabling monitoring at the grass roots but the civil society needs to fuel this cause. At an individual and micro level it is imperative that government sponsorship should not be abolished. However, studies have shown that the impact of free universal and primary education is more widespread and beneficial as opposed to free university education. The resources needed to provide free education for one person at the university could cater for a bigger number at the primary level. NAADS has been advised not to change guidelines unnecessarily and if need arises that they do so, the beneficiaries should well informed about the need to do so
9 The fisheries sector is catered for under the Ministry of agriculture, animal industries and Fisheries. The ministry of FPED should earmark money for building capacity of the local leaders at the grass roots for community mobilization and for empowerment to monitor performance The commissioner pledged to take on this matter further. The challenge of high infant mortality and maternity rates is cross cutting in the country. Uganda is failing to hit the target for this aspect of the MDGs. The provision of ambulances and drugs is not a permanent solution because these have been abuses. The civil society and government need to look for a more permanent and practical solution to this. I congratulate the government on investing heavily in education but the aspect of training inspectors outside the country yet the curriculum is made within the country needs to be addressed. The government policies such as no repeating a class in a UPE school eliminate and marginalize weak students Provision of meals at schools especially rural ones is crucial for the success of the education sector Ministry of FPED has provided resources for inspection. Inspection as an institution has been decentralized and the funds are in local government. However, it is essential that follow up on the use of resources be done. The aspect of being barred to repeat classes in UPE schools will be referred to the Ministry of Education and sports. Whereas proper nutrition in schools is important for the success of the education sector, providing meals in schools is an expensive venture and is subject to abuse. It is desirable but not affordable. Education should be a public private partnership between parents, schools and the government. It is essential that teacher s houses are built. Initially money for SFG (schools facilities grants) was being diverted to build latrines due to poor sanitation in schools. Next year, teachers houses will be taken into consideration. The budgetary allocation for the health sector has not reduced. The figures used in the position paper presented earlier were not up to date. Suggestion from audience It was suggested that this type of dialogue be organized at district levels so that opinions obtained at this level can be fed into the main dialogue. Way forward It was decided that participants hand in any additional input within a period of a week. A meeting will then be held with parliament to convince them about the issues of concern. Immediately after the budget is read, a high level breakfast meeting will be held with the budgeting team after which a post budget dialogue will be hld. After this, the monitoring process will begin. A vote of thanks was then moved to the team that drafted the position paper on behalf of CSBAG. NAME POSITION ORGANISATION 1. Bukenya Isah Manager Uganda National Farmers Federation 2. Tubbo s.so P/M Kaabong Distrel (NGO) FORUM 3. Yasin James Student KIU 4. John Kasolo Reporter Record Tv 5. Nalunkuma Julian Reporter Media Alliance 6. Kwarisinna.D Administrator Glory Consult 7. Mulumba Kasajja SEE Works Bugiri Bugiri District/Bugiri P/S 8. DJ Mirembe Marketing New Vision 9. Solomon Lubambula Journalist Power Fm 10. Sarah Ssozi Journalist Spirit Fm 11. Mwesigye MFA DPDA 12. Paul Mulika M&E Officer The Hunger Project (U) 13. Mulungi Irene Programme Officer NAWOU 14. Prossy Kizza Advocacy officer Whspa-ug 15. Justus Barugahare student Makerere University 16. Daniel Lukwango TASU/WB 17. Molied Hussein Student KIU 18. Moses K. Kakang NYRO 19. Richard Mugisha Advocacy Officer PELUM Uganda 20. Kirabo Agnes C&AO VEDCO 21. Mukunda Julius S.programme officer FOWODE 22. Kenneth Mugambe Commissioner MFPED 23. Lydia Rigazira Treasurer UWONET 24. Prof Kamuntu Minister 25. Okello CY Chairperson UDN (Amuria) 26. Batondaine Apollo Headteacher Kabaare (Bushenyi) 27. Nshemereirwe mary Bwengye Head teacher Ntungamo p/s UDN Bushenyi 28. Ignatius Tibategyeza CSZUC Ntungamo p/s UDN (Bushenyi) 29. Antony Grange Rep DCA Representative 30. Rachael Okuja Program Assistant to DR.Hon Maria Matembe CEWIGO 31. Mukasa Michael Sebastian Research Assistant CEWIGO 32. Irene Molly Karwemera C. monitor Monitor in Kanungu under UDN 33. Mugisha Lydia Secretary Monitor Kanungu C.BO UDN 34. Okoche Juliet Chairperson UDN Ibudoma 35. Njaye kizito Simon Senior security officer G4S/British High commissioner 36. Wafula Stephen Advocacy officer DFA Busia 37. Kurihira Barbare VECO E.A 38. Luke Okumu SRF EPRC 39. Misusera Mukasa DIR-PROGs DENIVA 40. Mugwanya Nassib Graduate Research Assistant Makerere University 41. Rutaro Thomas Senior officer statistics coordination Uganda Bureau of statistics 42. Muhanguzi Umar Secretary General Bushenyi Poverty monitors 43. Salim Kamuhira Ass/DEO Bushenyi district Bushenyi Education department 44. Charles.M.Olweny Program officer VEDCO 45. Lucy Akello Ayena Executive Director UCAA 46. Muwanga Samuel M+E officer Hanns R.Neuman stifting 47. Joshua Aijuka P.A M&E Advocacy PELUM 48. Jesephine Akia Policy & Advocacy officer NOGAMU 49. Wamagale Herbert P.A M&E Advocany ESAFF 50. Kibuuka Denis SPO M&E Advocacy CIDI 51. Simon Mugudde Team leader PEFO 52. Evelyn Nakagogo Journalist UBC TV 16 17
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