Government projects to fund the Shs52.7 trillion budget of the 2024/2025 financial year largely through domestic revenue, totaling Shs28.9 trillion.
This was in a motion for adoption of the National Budget Framework Paper (NBFP) for the financial years 2024/2025 to 2028/2029.
The NBFP, which is government’s overall strategy document for the budget, and provides the link between government’s overall policies (identified in the National Development Plan) and the annual budget was presented by the Minister of State for Finance, Planning and Economic Development, (General Duties), Hon. Henry Musasizi, during plenary sitting on Thursday, 25 January 2024.
He enumerated other sources of funding which include; Project support at Shs4 trillion, domestic refinancing of Shs9 trillion and Non Tax Revenue totaling Shs287 billion.
The NBFP contains information on macroeconomic policy and plans; overall fiscal strategy, such as revenue projections; the overall resource envelope for the medium-term; overall priority interventions (identified within the National Development Plan) and proposed sectoral expenditure plans.
Musasizi said that all the resources will be utilised and spread across the 20 “Third National Development Plan” (NDPIII) programmes.
“The ministry is working on tax measures which will be tabled as part of the budget submission for your scrutiny and approval in April,” Musasizi said.
He added that priorities for next year’s budget are; peace and security, roads, electricity, funding to income generating activities such as the Parish Development Model (PDM) and other wealth funds.
Investing in the people, Musasizi said, is among the priorities, as well as adequate planning for natural disasters and international commitments.
“Government will continue to support other key interventions and priorities under the NDPIII,” he said.
The Committee on Budget in its report, presented by the Deputy Chairperson, Hon. Remigio Achia, recommended approval of the motion, but cautioned government to reduce on domestic borrowing which according to the Auditor General stood at Shs96 trillion as of 30 June 2023.
“We, therefore, recommend that government should gradually scale down on domestic borrowing because of its negative effects on private sector credit,” said Achia.
The committee further noted that whereas government is prioritising investing in the PDM to alleviate household poverty, the economic strategy should be able to enhance the impact of public investment on growth through implementation of policies that foster efficiency in public investment, increase domestic revenue mobilisation efforts and maintain price stability.
“Government should adopt measures to improve the external position with the rest of the world through promoting a competitive exchange rate and building up foreign reserves to cushion the country against external shocks,” read the report in part.
There was, however, a minority report signed by Hon. Ibrahim Ssemujju Nganda (FDC, Kira Municipality), Hon. Yusuf Nsibambi (FDC, Mawokota County South), Hon. Nkuyingi Muwada (NUP, Kyadondo County East) and Hon. Ronald Kanyike (NUP, Bukoto County East).
The lawmakers contested and called for rejection of the NBFP over several issues, including what they termed, ‘suspicious domestic revenue figure.’
The report questioned the drop in Non Tax Revenue which he said will grow by a paltry Shs287 billion compared to Shs4.3 trillion in the previous financial year.
Ssemujju said that it is not possible that an economy whose Gross Domestic Product (GDP) is projected to grow from 5.2 to 6 percent will have its revenue grow by less than one percent.
“There is something the Government is hiding from Parliament. Either all the previous figures about domestic revenue growth were cooked and they are now telling us the truth or they want to do something fishy with our money,” he said.
Deputy Speaker Thomas Tayebwa, deferred debate on the NBFP to Tuesday, 30 January 2024, saying that legislators require time to prepare adequately for a well-informed debate.
“I want us to have a well-structured debate. I do not want to limit you on time but it will be a debate on a national picture,” said Tayebwa.