Budget: The devil is in the Shs72tn detail, say analysts

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Budget: The devil is in the Shs72tn detail, say analysts
Finance minister Matia Kasaija with the Budget Box

Economists say the Shs14 trillion that ballooned the 2024/2025 National Budget to Shs72 trillion has devil in the detail.

Parliament on Thursday approved a corrigenda of budget tabled by junior finance minister Henry Musasazi against the two earlier budget ceilings tabled by government.

Mr Musasizi said of the Shs14 trillion increment, Shs30 billion will pay emoluments of cultural leaders, while Shs25 billion will help in capitalisation of Vision Group that is currently experiencing financial distress, prompting the company to layoff several workers and halt operations of some of its brands such as Urban TV.

The biggest chunk of the Budget will not add to the GDP, with 88 percent of the Shs14 trillion appropriated for recurrent expenditure.

Only Shs1.7 trillion will go into development expenditure.

It was at the Civil Society Budget Advocacy group that the Nile Post found the executive director Julius Mukunda Friday morning.

He was buried into scrutiny of the Shs72 trillion Budget.

Mukunda is convinced the devil in Shs72 trillion is within the Shs14 trillion and the new areas for spending as identified by government

"The amount of money we are going to collect is still stagnant at almost Shs30 trillion, so where we are going to get the Shs42-plus trillion? We're going to borrow," he said.

Mukunda is even more concerned Uganda borrowing status is undesirable externally at a staggering middle risky status in-terms if debt sustainability.

The Opposition, in their minority report on the 2024/25 Appropriation Bill ,revealed that Uganda’s public debt has now grown to Shs97.499 trillion, yet there are plans to borrow additional Shs25 trillion to finance the next budget.

Ssemujju who doubles as Shadow minister for ginance, identified wasteful expenditure worth Shs5.485 trillion that should be removed from the budget, although the appeal was rejected by Parliament.

“The biggest task on our hands as the 11th Parliament, is to significantly reduce the country's trillion public debt," the Kira Municipality legislator said.

"This debt has become a big burden to our economy and threatens the very existence of Uganda as a sovereign state. Public debt now stands at 52.7 percent of our Shs184 trillion GDP. Parliament must therefore reject any measure that seeks to grow the public debt."

Mukunda said adding the Shs72 trillion could shoot the economy to a high risk "where we will start defaulting".

He wonders how government intends to only finance the budget but also debt refinancing.

"Debt refinancing is a method used that if your unable to pay me today and pay tomorrow. For government if a debt has matured this financial year and unable to pay it you renegotiate with lenders to pay next but the interest rate considered is of present," Mukunda said.

"Refinancing wouldn’t be a problem if it’s reducing ours is going up it was Shs5 trillion five years ago, now it’s Shs19 trillion. Some lenders will say we want our money now we are between a stone and a hard rock."

In execution, the situation gets even worse. In the last FY 2023/2024, audit report indicated that of the Shs55 trillion, government was only able to spend Shs43 trillion.

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