Civil Society Organizations (CSOs) have raised concerns over Uganda’s budgetary discipline, criticizing the government for repeatedly exceeding the 3% supplementary budget cap outlined in the Budget Act 2001.
They argue that these violations distort the budgeting process and divert funds from critical sectors such as health and education.
Speaking during a stakeholders’ meeting attended by Members of Parliament, representatives from the Auditor General’s Office, and officials from the Ministry of Finance, CSOs condemned what they described as a pattern of fiscal indiscipline.
The Budget Act 2001 states that “the total supplementary expenditure that requires additional resources over and above what is appropriated by Parliament shall not exceed 3% of the total approved budget for that financial year without prior approval of Parliament.”
However, CSOs note that the government has consistently bypassed this limit, raising concerns over transparency and accountability.
While Section 15 of the Public Finance and Accountability Act allows the executive to spend and later seek retrospective parliamentary approval for supplementary budgets, and Section 12 of the Budget Act grants the finance minister authority to approve supplementary budgets up to 3% of the total budget, CSOs argue that repeated violations of these limits undermine national planning.
Gilbert Musunguzi, Quality Assurance Manager at the Uganda Debt Network (UDN), warned that exceeding the 3% cap disrupts the budgeting process and leads to cuts in other crucial sectors.
“The government often channels these funds into unplanned expenditures, affecting the efficiency of public service delivery,” Musunguzi said.
CSOs pointed to allocations for projects such as Lubowa International Hospital, Roko Construction Ltd, and Dei Biopharma, which they claim were funded through supplementary budgets without adequate evaluation.
According to the Auditor General’s 2024 report, investments in Roko Construction Ltd and Dei Biopharma Ltd lacked proper assessment and documentation, raising concerns over financial transparency.
CSOs argue that funds are often allocated as bailouts or tax waivers without sufficient oversight.
“We see money being allocated outside the regular budgeting framework. Either these organizations receive direct financial bailouts or their tax obligations are waived. These actions, done outside the approved budget, create fiscal instability,” Musunguzi noted.
CSOs warn that continued breaches of the 3% cap compromise the effectiveness of public spending and call for either strict adherence to existing regulations or formal amendments to the law.
“The government must either comply with the Budget Act or transparently amend it if the 3% cap is impractical. Exceeding this limit diverts funds from critical sectors to classified expenditures that lack transparency,” Musunguzi added.
They further stress that repeated violations undermine the credibility of Uganda’s fiscal policies and call for increased oversight to ensure supplementary budgets do not become a tool for unchecked government spending.
“If the government cannot adhere to its own fiscal policies, it should change the rules transparently rather than consistently violating them. Public funds should be allocated based on national priorities, not on arbitrary executive decisions,” Musunguzi concluded.