Unplanned expenditures slowing down economy-Muwanga Kivumbi

Shadow Minister Hon.Muwanga Kivumbi

Shadow Finance Minister, Hon Muwanga Kivumbi has criticised government for prioritising expenditure over development, which he said is reflected on the budget presented to Parliament, slowing down the economy.

Muwanga said with half of the appropriated revenue for the current financial year already released to Ministries, Departments and Agencies (MDAs), much of it goes to consumptive items that have no bearing on growth of the economy.
“The greater portion of the national budgets is geared towards recurrent expenditures. However, these do not grow the economy for they comprise of consumptive items such as debt management costs, wages, workshops, entertainment, donations, travel inland and abroad among others,” he said.

This, said Kivumbi, explains why there is minimal infrastructural development that is happening in the financial year.
“…it is therefore not surprising that no substantive infrastructural developments in form of roads, schools, health centres and water sources among others have been noticed across the country,” he added.

With Covid-19 instigated budget cuts across agencies, Kivumbi said it was expected that the proceeds amounting to Shs2.6 trillion would be dedicated to actual economic growth, but that the money has instead been ring-fenced for further consumption.
“While 40 per cent of the budget cuts were made across votes as well as freezing of travel abroad, workshops and seminars, the realised funds amounting to Shs2.6 trillion was still allocated towards other non-targeted consumptive items,” he added.

On classified expenditure, Kivumbi said a Member of the opposition should be co-opted by the Speaker to form part of the committee that scrutinises classified budgets, but Deputy Speaker Anita Among said a Member from the opposition side had already been co-opted into the Committee.

Unspent funds in a financial year, said Kivumbi, is of great concern and that the funds have the potential of becoming proceeds of corruption.
He called for a comprehensive report on the unspent funds.
“The Minister responsible for Finance should immediately report to Parliament the extent of unspent balances in the closed financial year 2021/22. Parliament should subsequently consider appropriation of the unspent balances,” he said.
Kampala Central MP, Hon Muhammad Nsereko said the slowing down of the economy is attributable to the cash-strapping of the local governments, whose accounts he said are centralised.
“The most important thing at the moment is the performance at the local level, their accounts being centrally controlled; we are not respecting the principle of decentralization,” he said.

Finance State Minister (General Duties), Hon Henry Musasizi thanked Muwanga Kivumbi for the insights but said the issues of absorption cannot arise when there are no releases made.
“You need to differentiate between absorption and disbursement; the issue of absorption cannot arise when it is not disbursed,” he said.

On the unspent balances, Musasizi said the monies return to the Consolidated Account since appropriation expires with the end of the financial year.
“The law provides that appropriation will expire at the end of the financial year; our budget system does not provide for carry forward; every appropriation shall expire at the end of the financial year,” he said.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top