Every Shilling Counts: Citizens' Perspectives on the National Budget Frame work Paper FY2014/15

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Citizens perspectives on the
National Budget Framework
Paper FY 2014/15
Civil Society Budget Advocacy Group
EVERY
SHILLING
COUNTS

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Every Shilling Counts: Citizens perspectives on the National
Budget Framework Paper FY 2014/15, was produced by the Civil
Society Budget Advocacy Group (CSBAG) and presented at the Civil Society Pre-
Budget Dialogue FY 2014/15. The contents of this publication are the responsibil-
ity of CSBAG and not of our development partners.
© APRIL 2014
Civil Society Budget Advocacy Group (CSBAG)
P.O. Box 660, Ntinda
Plot 15 Vubya Close, Ntinda Nakawa Rd
Fixed Line: +256-41-286063, Mob: +256-755-202-154
E-mail: csbag@csbag.org
Web www.csbag.org
@CSBAGUGANDA CSBAG/Facebook.com
All rights reserved. No part of this publication may be reproduced, or reprinted
in any form by any means without the prior permission of the copyright holder.
CSBAG encourages its use and will be happy if excerpts are copied and used.
When doing so, however please acknowledge CSBAG.

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It is with pleasure that I share with you the Citizens’ Perceptives on the National
Budget Framework Paper FY 2014/15. It has been a great milestone for the Civil
Society Budget Advocacy Group (CSBAG) to have successfully consulted all our
53 member organizations, and our districts of operations to make contributions
towards this publication. My special thanks to the women and men from all the
regionsofUgandawhoattendedthePre-BudgetDialogueatUgandaManufacture’s
Association (UMA) Conference Hall on 15th April 2014. The debate at this meeting
was enriching as citizens got an opportunity to hear from their leaders, Members
of Parliament and Government Technocrats on how the proposed budget for FY
2014/15 will address their needs.
This publication serves three major purposes;
1. It provides citizens’ perspectives on the National Budget Framework Paper
FY 2014/15. We believe the concerned Government Ministries will integrate
these concerns in their Ministerial Policy Statements and Budget for FY
2014/15
2. It provides critical areas of concern that government can address to improve
service delivery and welfare of citizens, and thirdly
3. It takes stock of what positive changes the Government has made to improve
budget efficiency and effectiveness.
This publication is intended for policy makers especially Members of Parliament to
understand and get alternative Policy options on how government resources can
be mobilized, allocated and utilized in a gender sensitive , pro poor and sustainable
manner.
I encourage the different Ministries to also read this document as it provides an
opportunity for them to make their planning and budget more consultative and
participatory. The publication has sectoral issues which when addressed by
different ministries can enhance the welfare of citizens.
Once again, I thank all those who contributed immensely to the development
of this publication as we promote a Uganda with a people centered budget that
dignifies humanity
FOREWORD
Julius Mukunda
Coordinator

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List of Figures 5
List of Tables 5
List of Acronyms 5
EXECUTIVE SUMMARY 6
1.0 INTRODUCTION 8
1.1 Background 8
1.2 Macroeconomic Outlook for the FY 2013/14 8
1.3 The NDP and the FY 2014/15 National Budget 9
2.0 MACRO-ECONOMIC MANAGEMENT 11
2.1 Inflation 11
2.2 Interest Rates 12
2.3 Unemployment and Job Creation 13
2.4 Consumption vs. Development Expenditure 13
2.5 Supplementary Budgeting 14
2.6 Public Debt 15
2.7 URA Revenue Performance 16
3.0 SECTOR ANALYSIS 17
3.1 EDUCATION Sector 18
3.2 AGRICULTURE Sector 18
3.3 HEALTH Sector 25
3.4 WATER & ENVIROMNMENT Sector 28
3.5 WORKS & TRANSPORT Sector 30
3.6 SOCIAL DEVELOPMENT Sector 32
3.7 TRADE, TOURISM AND INDUSTRY Sector 33
4.0 OTHER BUDGETARY ISSUES 35
4.1 Fiscal Decentralization: 35
4.2 Public Administration: 35
4.3 Salary Enhancement for Public Servants: 36
4.4. Court Awards: 36
4.5 Decisive action on theft of public funds: 36
4.6 Gender and Equity Issues 36
4.7 Climate Change and Disasters 37
5.0 CONCLUSION 37
TABLE OF CONTENTS

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List of Figures
Figure 1: Sector analysis of commercial banks’ credit to the private sector. 12
Figure 2: Government Recurrent and Development Expenditure for the FY 14
2014/15
Table 3: Summary of Supplementary Expenditure for the 18
FY 2013/14 – Schedule 1
Figure 4: Education intra sector Allocations in the FY 2014/15 18
Figure 5: School Inspection Grant Transfers to Local Governments 19
(Billion UGX)
Figure 6: Intra-sectoral allocations for the Agriculture Sector 23
in the FY 2014/15
Table 7: Health sector budget Allocations for the FY 2014/15 23
Figure 8: FY 2014/15 Health sector allocations 26
Figure 9: Intra sector allocations for the FY 2014/15 28
Figure 10: Intra-sector allocations for the FY 2014/15 30
Figure 11: Intra sector allocations for the FY 2014/15 32
List of Tables
Table 1: NDP sector projections vs FY 2014/15 allocations (bns) 10
Table 2: Summary of Supplementary Expenditure for the 15
FY 2013/14 – Schedule 1
Table 3: Summary of sector allocations for the FY 2014/15 (UGX billions) 17
Table 4: Education Sector Budget Allocation for the FY 2014/15 18
Table 5: Education Expenditure Outturns in Arrears (UGX Billion) 20
Table 6: Special Needs, Guidance and Counselling Expenditure 20
(UGX Billion)
Table 7: Staffing Gaps at Ministry of Education &Sports 21
Table 8: Agriculture Sector Allocations for the FY 2014/15 22
Table 9: Health sector budget Allocations for the FY 2014/15 26
Table 10: Water & Environment Sector Budget for the FY 2014/15 28
Table 11: Works & Transport sector budget for FY 2014/15 30
Table 12: The Rollover of Maintenance Funds (2009/10-2010/11) 31
Table 13: Social Development Sector Budget Allocation FY 2014/15 32
Table 14: Social Development Sector budget for the FY 2014/15 34
List of Acronyms and Abbreviations
ACF Agriculture Credit Facility
BOU Bank of Uganda
BOP Balance of Payments
CBR Central Bank Rate
CDF Community Development Fund
CSBAG Civil Society Budget Advocacy Group
CSOs Civil Society Organisations
DUCAR District Urban Community Access Roads
EAC East African Community
FY Financial Year
GDP Gross Domestic Product
GMOs Genetically Modified Organisms
GOU Government of Uganda
ICT Information, Communication & Technology
JLOS Justice Law & Order Sector
LGs Local Governments
M&E Monitoring and Evaluation
MDAs Ministries, Departments & Authorities
MoFPED Ministry Finance Planning & Economic Development
MTEF Medium Term Expenditure Framework
NAADS National Agriculture Advisory Services
NARO National Agriculture Research Organisation
NBFP National Budget Framework Paper
NDP National Development Plan
NEMA National Environment Management Authority
PPDA Public Procurement and Disposal of Assets Authority
PWDs Persons with Disabilities
RWSS Rural Water Supply & Sanitation
SACCOs Savings And Credit Co-operatives
SNE Special Needs Education
TOT Terms of Trade
UACE Uganda Advanced Certificate of Education
UCE Uganda Certificate of Education
UDHS Uganda Demographic Household Survey
UNESCO United Nations Educational, Scientific and Cultural Organization
UNRA Uganda National Roads Authority
UPE Universal Primary Education
URF Uganda Road Fund
USE Universal Secondary Education

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The Minister of Finance Planning and Economic
Development (MFPED), Hon. Maria Kiwanuka submitted
the National Budget Framework Paper (NBFP) for the FY
2014/15 to the Parliament of Uganda as per Section 4(1) of
the Budget Act 2001 on the 27th March 2014. The NBFP
lays out the fiscal policy framework and strategy for the
financial year and details out how the Government of
Uganda (GoU) intends to achieve its policy objectives
over the medium term through the budget.
Since the budget is an important political tool used by government to transform citizens’ lives, Civil
Society Organizations (CSOs) under the Civil Society Budget Advocacy Group (CSBAG) , share
their proposals on how the FY 2014/15 can better address the needs of poor women and men,
children, the youth, Persons with Disabilities (PWDs), and the elderly among others. This is part of
the input by CSOs in the budget process, making it more participatory at the approval stage. This
publication can be used by government and other stakeholders including CSOs to make the budget
more effective and efficient.
On the Macro Economy, CSBAG proposes the following;
Inflation:
• Government should address the supply side concerns within the agriculture sector that cause
the food price hikes on a seasonal basis. Specifically government should:
o Invest in irrigation and other appropriate technologies to reduce the over dependence on
the unstable climatic conditions;
o Invest in food storage and post-harvest technologies, so that during drought food supply
is not acutely affected, thus stabilizing food market prices;
o Strengthen extension services for the farmers so that they can learn sustainable
agricultural practices as well as connect farmers to potential markets; and
o Improve the meteorological department so that weather forecasts are more accurate,
which will give a sustainable solution to food production while checking food price shocks
and in the process achieving low and steady inflation in the economy.Interest rates
EXECUTIVESUMMARY

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§ Government should provide adequate credit
facilities, such as the establishment of the
Cooperative and Agricultural Bank, targeted
towards small-scale farmers and entrepreneurs
who are more likely to be affected by the high
commercial bank lending rates.
Unemployment and Job
Creation
§ We urge government to develop an employment
generation strategy that recognizes employment
as a crosscutting issue.
§ This strategy requires an ultimate objective
on employment in all sectors of the economy
particularly those with the highest potential to
generate employment opportunities particularly
the agriculture sector.
Consumption vs.
Development Expenditure
§ We recommend that increased consumption
expenditure should be done through business
transactions with the private sector.
Supplementary Budgeting
§ We recommend that parliament continues to
scrutinize all supplementary expenditure and the
implore it to only authorize genuine unforeseen
expenditures.
Public Debt
§ Government should desist from domestic
borrowing (either for consumption or Monetary
Policy) as this will crowd out the private sector.
§ Government should seek to effectively spend the
locally sourced revenue to reduce the need for
borrowing both internally and externally.

Uganda Revenue
Authority (URA) Revenue
Performance
• Improving the procedures of registering informal
businesses as this will potentially improve the tax
base.
• Review all tax incentives and exemptions so as to
eliminate the unproductive ones.
• To improve tax efficiency and accountability, URA
and the MFPED should deliberately display all the
individuals and companies that have been granted
tax holidays and exemptions by government.
• A key step to solving the tax deficit problem hinges
on growing the private business sector of Uganda.
This in turn, requires improving the investment
climate, especially with easing access to credit
by discouraging government domestic borrowing
which crowds out the domestic sector.
The sector specific recommendations are also
detailed in the paper and the sectors covered include
Agriculture, Health, Education, Water & Environment,
Social Development, Works & Transport, and Trade
Tourism & Industry. Other issues that have budgetary
implications are also alluded to in this paper. These
include fiscal decentralisation, public administration,
salary enhancements for the public servants, gender
and equity issues, climate change and disasters among
others.
... Government
will actively parner
with CSOs, in
the objectives
of monitoring
and evaluation
of its activities
especially as a
means of enforcing
effeciency and
value for money...
NBFP FY 2014/2015

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INTRODUCTION
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1.1 Background
1. On behalf of Civil Society Organizations (CSOs) working under the Civil Society Budget
Advocacy Group (CSBAG)1
, we would like to present CSO perspectives on the budget
strategy and priorities for FY 2014/15. As CSOs, we value good governance, social justice,
and national development and seek to contribute to a conducive environment that promotes
dignity, opportunity and equality for all citizens.
2. We commend government for the continued consultation and involvement of various
stakeholders including civil society in the budget process. We are however concerned that
the proposed/new budget process is compressed within too short a period of time. This
might undermine the meaningful stakeholder consultations in future. As CSOs we strongly
believe that Uganda’s service delivery challenges do not emanate from the lack of funds as
such, but rather poor prioritisation of public expenditure coupled with budgetary indiscipline.
3. The Minister of Finance Planning and Economic Development, Hon. Maria Kiwanuka
submitted the National Budget Framework Paper (NBFP) for the FY 2014/15 to the
Parliament of Uganda as per Section 4(1) of the Budget Act 2001 on the 27th March 2014.
The NBFP lays out the fiscal policy framework and strategy for the financial year and setting
out how the Government intends to achieve its policy objectives over the medium term
through the budget.
4. Since the budget is an important political tool used by government to transform citizens’
lives civil society organizations under the Civil Society Budget Advocacy Group (CSBAG),
wish to share their proposals on how the FY 2014/15 can address the needs of poor women
and men, children, the youth, Persons with Disabilities (PWDs), and the elderly among
others. This is part of the input by CSOs in the budget process, making it more participatory.
The information generated can be used by government and others to make the budget
more effective and efficient in addressing poverty in Uganda.
1.2 Macro Economy outlook for the FY 2013/14
5. The Gross Domestic Product (GDP) has in Quarter 1 and Quarter 2 for the FY 2013/14
grown from 1percent to 2.3percent at market prices. This is growth from 6.2 to 6.3 trillion.
This development has been achieved along a steady exchange rate for the most part of
the third quarter for the FY 2013/14. The shilling has however depreciated to average at
about UGX 2,550 in March 2014. This has helped the exports to improve as the Balance
1 The Civil Society Budget Advocacy Group (CSBAG) is a coalition formed in 2004 to bring together
CSOs at national and district levels to Influence Government decisions on resource mobilization and utilization
for equitable and sustainable development.

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of Payments (BOP) position and the Terms of
Trade (TOT). The inflation however increased
from 6.8percent in February 2014 to 7.1percent in
March 2014 partly due to the weakened shilling.
Year-on-Year, the annual inflation for March 2014
has increased by 42.3percent.
6. According to the Bank of Uganda (BoU) statistics,
the interest rates have averaged at 22percent
for the past five months. This is in particular the
weighted average of commercial banks’ lending
rate. The CBR has still been held at 11.5percent for
the fourth month in a row since December 2013.
7. According to the Uganda Bureau of Statistics
(UBOS) statistical abstract 2013, the overall
unemployment rate was 3.6percent while the
urban unemployment rate was 8.7percent.
The situation was worse for women whose
unemployment rate was 4.5percent compared
to 2.6percent for men. Unemployment according
to the Uganda Demographic Household Survey
(UDHS) 2009/10 was low among the youth
population (5percent of those in the labour
force). However, the youth unemployment rate
in Kampala was thrice (15percent) the national
youth unemployment rate, which underscores the
difference in the structure of the urban and rural
labour markets.
8. According to the NBFP for the FY 2014/15,
revenue collection by URA is projected to increase
from UGX 8,534.5bn in the FY 2013/14 to UGX
9,834.7bn in the FY 2014/15. The Collections
from Non Tax Revenue (NTR) sources are
projected to increase from UGX 270.6bn in the
FY 2013/14 to UGX 292.6bn in the FY 2014/15;
this will be a 20percent increment between FY
2013/14 (projected outturn) and FY 2014/15
projection. Domestic resources will account for
about 82percent of the total budget. Of this, URA
revenue collections next financial year account for
about 69percent (equivalent to about a 0.5percent
increase as percentage of Gross Domestic Product
(GDP) over this year’s level). There is however the
need to improve the reporting and accountability
on Non-Tax Revenue collections and utilization by
Ministries Departments and Authorities (MDAs).
1.3 The NDP and the FY
2014/15 National Budget
9. The National Development Plan (NDP) envisions
a transformed Ugandan society from a peasant to
a modern and prosperous country within 30 years
and that Uganda should be in the middle income
segment by 2017. The development indicators
associated with transformation, according to
the NDP, include: Increasing per capita income
levels; Improving labour force distribution in line
with sector GDP share; raising the country’s
human development indicators; and, improving
the country’s competitiveness to levels associated
with middle income countries.
10. The indicators above in the budget for the FY
2014/15 (the last year for the NDP) are not in
tandem with the NDP. The sector allocation
to education has been reduced by UGX 92bn;
agriculture which occupies the majority of
Ugandans receives only 3.1% of the national
budget and the government plans on borrowing
UGX 1.6 trillion from the domestic market
(keeping lending rates high contrary to middle
income countries). Also to note is the investment
priorities in the NDP and the National Budget for
the FY 2014/15, which are - improving agriculture
production and productivity, tourism, trade and
Information Communication Technology (ICT).
These sectors however are budgeted to receive
3.1%, 0.5% and 0.1% respectively of the National
Budget. This does not resonate with the NDP and
the reference to these sectors as priorities in the
budget.
According to the
NBFP for the FY
2014/15, revenue
collection by URA
is projected to
increase from
UGX 8,534.5bn in
the FY 2013/14 to
UGX 9,834.7bn in
the FY 2014/15.
9

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Table 1: NDP sector projections vs FY 2014/15 allocations (bns)
Sector
2014/15 NDP
projections
2014/15 budget
projections
Change (+/-)
2014/15 NDP %
shar
2014/15 % share
Works & Transport 2,266.70 2,575.50 308.80 16.4 18.1
Energy & Mineral Dev’t 1,736.20 1,711.70 -24.50 12.6 12
Education 2,633.24 1,699.40 -933.84 19.1 11.9
Health 1,598.40 1,197.80 -400.60 11.6 8.4
Public sector Mgt 806.09 1,070.40 264.31 5.8 7.5
Security 826.76 1,005.50 178.74 6 7.1
JLOS 549.43 778.5 229.07 4 5.5
Accountability 807.47 707.1 -100.37 5.9 5
Public Admin 219.09 504.2 285.11 1.6 3.5
Agriculture 737.19 440.7 -296.49 5.3 3.1
Water & Environment 516.72 430.8 -85.92 3.7 3
Legislature 182.34 237.6 55.26 1.3 1.7
Lands, Housing & Urban Dev’t 30.8 99.1 68.30 0.2 0.7
Tourism, Trade & Industry 110.09 68.4 -41.69 0.8 0.5
Social Dev’t 55.72 52.9 -2.82 0.4 0.4
ICT 14.39 15.4 1.01 0.1 0.1
Interest Pay’ts due 647.8 1,104.80 457.00 4.7 7.8
Unallocated 41.33 542.89 501.56 0.3 3.8
Grand Total 13,986.17 14,242.70 256.53 100 100
Source: NDP 2010/11-2014/15 and the NBFP FY 2014/15

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2.1 Inflation
11. We like to commend government upon achieving and maintaining
a single-digit inflation rate since August 2012. The inflation rate has
however since June 2013 been above the 5% policy target by BoU.
In the Month of March 2014, inflation was reported to be 7.1%; an
increment from the 6.8% inflation in February 2014. To have sustained
single digit inflation and also to achieve the inflation projection for the
FY 2014/15 of 6.9%, the structural bottle necks affecting agriculture
production and productivity have to be addressed.
12. This is not to say it’s the only cause of inflation but solving this will,
together with other factors, have a more sustainable solution. The
other factors that cause inflation in Uganda and need attention include
among others: - the exchange rate since Uganda is predominantly
an importing country, currency in circulation, aggregate demand and
international oil prices.
Recommendation
• Government should also address the supply side concerns
within the agriculture sector that cause the food price hikes on a
seasonal basis. Specifically:
o Invest in irrigation and other appropriate technologies to
reduce the over dependence on the weather;
o Invest in food storage and post-harvest techniques, so that
during drought food supply is not acutely affected, thus
stabilizing food market prices;
o Strengthen extension services for the farmers so that they
can learn sustainable agricultural practices and connecting
farmers to potential markets; and,
o Improve the meteorological department so that weather
forecasts are more accurate, which will give a sustainable
solution to food production while checking food price shocks
and in the process achieving low and steady inflation in the
economy.
MACRO-ECONOMIC
MANAGEMENT

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2.2 Interest Rates
13. We commend Government for its interventions in the management
of the monetary policy and its attempt to reduce lending rates. The
lending rates have been managed from 27.5 in March 2012 to the
current level of about 20%. However this weighted average does not
reflect the current market lending rates that are averaging at 25%.
The use of Central Bank rate (CBR) as a policy variable to reduce the
lending rates has only worked on the weighted average but not on
the commercial market rates. This is due to the structural rigidities in
the financial markets that include: low financial penetration, high loan
administration costs and the high rates of default on loan repayments
among other reasons.
14. The use of the CBR as a Monetary Policy Tool has had diverse effects on
the economy. According to the State of the Economy Report by Bank
of Uganda published in June 2013, the final consumption expenditure
contribution to real GDP growth gradually reduced from 8.2% growth in
the FY 2010/11 to 3.4% in 2011/12 and was at 1.3% in the FY 2012/13.
Furthermore, household final consumption expenditure also reduced
to -1.4% in the FY 2012/13 from 8.4% in the FY 2010/11.
15. As a negative impact on the private sector by the CBR, the growth
in access to credit by the private sector has continued to be strained.
This is because the cost of borrowing is high and so becomes a barrier
in access to credit. The increase in credit extension to households
reported to be at 38% in December 2013 has no long-term good
economic implication for the economy. This is because this credit
acquired is purely for consumption and not investment. Whether or
not CBR is high the demands for consumption still exists and that’s
why high lending rates are not seen to deter household demand for
credit from the commercial banks.
16. The demand for credit by households is possibly driven by consumption
expenditure such as tuition for school children. These kinds of loans
extended to the households only look good in the loan portfolios of the
commercial banks, but, for a short time. Before long the commercial
banks will suffocate from the high rate of bad loans registered. This not
only negatively impacts the profitability of the banks but also reduces
on the corporate tax levied by URA since it depends on the profits
registered by the institution. For as long as the cost of doing business
is increased by the high costs of loans administration as well as high
rates of non-payment among other reasons, the lending rates will not
go down further irrespective of how low the CBR is reduced.
Recommendation
Governmentshouldprovideadequatecreditfacilities,suchastheestablishment
of the Cooperative and Agricultural Bank, targeted towards small-scale
farmers and entrepreneurs who are more likely to be affected by the high
commercial bank lending rates.
Figure 1: Sector analysis
of commercial banks’
credit to the private sector.
12

Source: Bank of Uganda

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2.3 Unemployment and Job
Creation
17. In Uganda, the working age is considered to be
from 14 to 64 years. According to the UBOS
statisticalabstract2013,theoverallunemployment
rate is 3.6% while the urban unemployment rate
is 8.7%. The situation is worse for women whose
unemployment rate is 4.5% compared to 2.6%
for men. The unemployed among the youth are
a hybrid of youth living in slums, city streets,
high risk and impoverished communities, with
disability, living with HIV and AIDS as well as
those who have completed secondary school or
tertiary institutions but without employment.
18. Whereas the overall unemployment rate was
3.6% in FY 2009/10, the majority (79.5%) of those
employed were in self-employment. Knowing the
high rate at which start-up businesses die in this
economy, it is possible to posit that actually more
than 50% of the working population is unemployed
save for the issues with the country’s description
of a working age.
19. Although economic growth has been steady
over the last 5 years, the growth process has not
translated into a creation of more and better jobs.
It is estimated that about 480,000 students leave
the education system per annum. However over
2 million literate youth are jobless and a further
2 million are underemployed. The budgetary
allocations have always been short on enhancing
economic growth and household incomes through
increased production and productivity in the
agricultural sector. The majority of the proposed
job-creation strategies such as the Graduate and
Youth Venture Capital Funds, as well as the Youth
Livelihoods Programme, among others, are yet to
deliver the required outcomes.
20. The median amount of monthly payment in
2009/10 was UGX 37,735 in real terms and since
the price level of goods and services is known to
increase over time, yet remunerations do not,
this means that the majority of the working age
Ugandans, fortunate enough to get a job, cannot
afford to live, considering the huge number of
dependents they take care for.
Recommendations
• We urge government to develop an
employment generation strategy that
recognizes employment as a crosscutting
issue.
• This strategy requires an ultimate objective
on employment in all sectors of the economy
particularly those with the highest potential
to generate employment opportunities. This
strongly suggests that more efforts should be
geared towards the agriculture sector.
2.4 Consumption vs.
Development
Expenditure
21. In the FY 2014/15, government expenditure is set
to reduce in terms of capital and consumption
outputs. In the FY 2013/14, the estimated
consumptionexpenditurewasat44.9%(UGX4.7tn)
and this is estimated to increase to 50.7% (UGX
5tn) in the FY 2014/15. Capital expenditure
which was estimated at 47% (UGX4.9tn) in the
FY 2013/14 will reduced to 39.6% (UGX3.9tn) in
the FY 2014/15. The argument brought forward
by government that an increase in consumption
expenditure will ensure that assets acquired by
According to the
NBFP for the FY
2014/15, revenue
collection by URA
is projected to
increase from
UGX 8,534.5bn in
the FY 2013/14 to
UGX 9,834.7bn in
the FY 2014/15.
13

14
Figure 2: Government Recurrent and
Development Expenditure for the FY
2014/15
government are operational is deceptive. We strongly believe that this
increase in public consumption expenditure is a result of the random
creation of districts and other public institutions that we cannot support
sustainably.
22. Whereas the increased consumption expenditure is expected to be a
stimulus in the economy, the most desirable effects are achieved when
the expenditure is on sales and purchases with the private sector. The
common practice to spend heavily on workshops, allowances and trips
abroad will be a self-defeating purpose for the increased consumption
expenditure.
Recommendation
• We there for recommend that the increased consumption
expenditure be done through business transactions with the
private sector.
2.5 Supplementary Budgeting
23. In the FY 2013/14, so far, the GoU has forwarded to Parliament a
supplementary expenditure schedule totalling to UGX 81.126bn as
recurrent expenditure for ten institutions and ministries and UGX
139.442bn as development for three institutions and ministries. The
total supplementary expenditure on schedule 1 is UGX 220.568bn
Table 3 highlights these expenditures:
23.1 We commend government for strictly enforcing budget discipline in the
FY 2013/14 thus far. The Ministry of Justice and Constitutional Affairs
requested for a supplementary expenditure of UGX 8,109,601,000 of
which 3.267bn was for facilitation for the Heritage Oil and Gas Ltd and
Tullow Uganda Operations PTY arbitration case in London and UGX
4.843bn for partial court awards. The Reason for not appropriating
these funds was that they could not fit in the MTEF ceiling. However, in
the FY 2013/14, UGX 4.347bn was appropriated for court awards. This
supplementary expenditure of over UGX8bn is 69% of the approved
votes function contrary to Section 12 (2) of the Budget Act.
24. To put this in perspective, since government operates a cash
budget, and all the money has been allocated, to get supplementary
expenditures, some government institution has to suffer a budget
cut to avail money for the court cases, whose verdict can’t even be
certain. This then has a spill-over effect of poor service delivery since
work plans are not implemented as planned in the MDAs whose
budgets are cut. We once again commend the Parliament for strongly
condemning this expenditure.
Recommendation
• We recommend that parliament continues to scrutinize all
supplementary expenditure forwarded to them and it should only
authorize genuine unforeseen expenditure.
14
Source: National Budget
Framework Paper FY2014/15

15
2.6 Public Debt
25. According to the NBFP for the FY 2014/15, Uganda’s total external
debt exposure has increased over the years from USD 2.45bn in June
2007 to USD 6.4bn in December 2013. USD 4.1bn of total debt is
disbursed and USD 2.3bn is loan commitments, which have not yet
been disbursed. The increase in external debt arises out of the need
to bridge the huge infrastructure gap to finance priority investments
identified by the NDP, particularly in sectors such as Energy and
Mineral Development, Works and Transport, Education and Health.
26. The domestic debt in the FY2014/15 is projected to be UGX1, 647.2bn
and this will make the crowding out effect of the private sector worse.
In effect, the lending rates in the commercial banks will too not come
down soon since the banks will prefer to deal with the government
than the private sector (lower risk profile is attached to government).
27. The total expenditure on interest payment is projected to be UGX
1,104.8bn on both the domestic and external debt in the FY 2014/15.
The domestic interest payment is UGX 996.5bn while the external
interest payment is projected to be UGX 108.3bn. The important thing
to note about the interest on the domestic debt is that most of it has
accumulated due to the operations of the monetary policy through
issuing of bills and bonds. Also to note is that this money is being
paid to offshore investors thus the tax payer is paying opportunistic
foreigners under the pretext of managing the monetary policy.
Recommendations
• Government should desist from domestic borrowing (either
for consumption or Monetary Policy) as this will crowd out the
private sector.
• Government should seek to effectively spend the locally sourced
revenue to reduce the need for borrowing both internally and
externally.
Table 2: Summary of Supplementary Expenditure for the FY 2013/14 – Schedule 1
Ministry/Institution Recurrent(‘000) Development (‘000) Total (‘000)
Ministry of Foreign Affairs 997,126 - 997,126
Ministry of Justice and Constitutional Affairs 8,109,601 - 8,109,601
Ministry of Education and Sports 1,300,000 - 1,300,000
Ministry of EAC Affairs 909,480 - 909,480
Busitema University 1,321,693 - 1,321,693
NAGRC&DB 2,000,000 - 2,000,000
Uganda Police Force 60,000,000 - 60,000,000
NFA 5,000,000 - 5,000,000
Uganda Mission in Brussels 867,128 - 867,128
Judiciary 620,851 - 620,851
Ministry of LG - 858,935 858,935
National Citizenship and immigration Control - 138,583,014 138,583,014
NARO - 16,700,000 16,700,000
Total 81,125,879 156,141,949 237,267,828
15
Source: Supplementary Schedule 1 for the FY 2013/14

16
2.7 URA Revenue Performance
28. According to the NBFP for the FY 2014/15, the net domestic revenue collections by URA had a short
fall of UGX 289.72bn by end of January 2014. The projected shortfall erodes the revenue base for the
FY 2014/15, which implies need for tax policy and administration measures to complement financing of
the budget for the FY 2014/15. The projected tax to GDP ratio for the FY 2014/15 is expected to increase
to 13.5% compared to the provisional 12.96% for the FY 2013/14. It will be extremely challenging for
the government to meet the minimum requirement for joining the EAC monetary union since it among
other things the Tax-to–GDP ratio is supposed to be at 25% for at least three consecutive years.
29. It is important to note that revenue performance of any given country allows for an insight into potential
signs of deeper problems in an economy if the root cause of the short fall appears to be internal
(corporation taxes) rather than deficit international taxes.
Recommendations
• Integrate the informal sector into the formal sector through improving the procedures of registering
businesses. This will potentially improve the tax base.
• Review all tax incentives and exemptions so as to eliminate the unproductive ones.
• To improve tax efficiency and accountability, URA and the MoFPED should deliberately display all
the individuals and companies that have been granted tax holidays and exemptions by the GoU.
• A key step to solving the tax deficit problem hinges on growing the private business sector of
Uganda. This in turn, requires improving the investment climate, especially with easing access to
credit by discouraging government domestic borrowing which crowds out the domestic sector.
Whereas the increased
consumption
expenditure is expected
to be a stimulus in the
economy, the most
desirable effects are
achieved when the
expenditure is on sales
and purchases with the
private sector.
16

17
30. The National Budget in the FY 2014/15 is projected to increase to about UGX 14.3 trillion
were the Winners and Losers are highlighted in the table below:
Table 3: Summary of sector allocations for the FY 2014/15 (UGX billions)
Sector FY
2013/14
approved
budget
FY 2014/15
budget
projections
Change
(+/-)
FY 2013/14
% share
FY 2014/15
% share
Works &
Transport
2,510.70 2,575.50 64.8 19.2 18.1
Energy &
Mineral Dev’t
1,675.70 1,711.70 36 12.8 12
Education 1,761.60 1,699.40 -62.2 13.5 11.9
Health 1,127.50 1,197.80 70.3 8.6 8.4
Public sector
Mgt
1,093.80 1,070.40 -23.4 8.4 7.5
Security 1,048.50 1,005.50 -43 8 7.1
JLOS 625.7 778.5 152.8 4.8 5.5
Accountability 698.8 707.1 8.3 5.3 5
Public Admin 398.3 504.2 105.9 3 3.5
Agriculture 382.7 440.7 58 2.9 3.1
Water &
Environment
383.9 430.8 46.9 2.9 3
Legislature 237.6 237.6 - 1.8 1.7
Lands,
Housing &
Urban Dev’t
30 99.1 69.1 0.2 0.7
Tourism,
Trade &
Industry
54.8 68.4 13.6 0.4 0.5
Social Dev’t 44.4 52.9 8.5 0.3 0.4
ICT 15.4 15.4 - 0.1 0.1
Interest
Payments due
975.3 1,104.80 129.5 7.5 7.8
Unallocated - 542.89 n/a 3.8
Grand Total 13,064.79 14,242.70 1,177.91 100 100

SECTORANALYSIS
3
17
Source: National Budget Framework Paper FY 2014/15

18
3.1 Education sector
31. The education sector has dominated public expenditure in Uganda
over the years averaging 18% of expenditure outturns over the past
decade. However, in the current economic context, Uganda, like
other countries in sub-Saharan Africa, must make difficult decisions
about mobilizing and allocating resources to this sector, especially
in light of rising demands from other public service sectors, such as
infrastructure or healthcare (UNESCO, 2011).
3.1.1 Budget Performance FY 2013/14
32. In the financial year 2013/14, the approved budget for the education
sector amounted to UGX 2.01 trillion (14.6% of the national budget).
The main objectives of this expenditure were, to improve quality
and relevance of education at all levels; improve equitable access to
education and improve effectiveness and efficiency in the delivery of
the education services.
Table 4: Education Sector Budget Allocation for the FY 2014/15

Approved
budget
FY 2013/14
Projections
FY 2014/15
Recurrent

Wage 962.633 963.953
Non-
Wage 364.07 370.15
Development

GoU 147.688 149.688
Ext. Fin. 288.194 216.603
GoU Total 1474.391 1,483.791
Total GoU +Ext
Financing(MTEF) 1762.585 1,700.39
Non Tax Revenue 243.739 251.628
Grand Total 2,006.33 1,952.021
The education sector for the FY 2014/15 is proposed to have an allocation
(with external financing) decrease to 11.9% (UGX1, 699.4bn) compared to the
13.5% (UGX 1,761.6bn) of the national budget in the FY 2013/14. This will
translate into a UGX 62.2bn reduction. The reduction in the education sector
budget is as a result of a drop in projected external financing which reduced
from UGX 288.194bn in the FY 2013/14 to UGX 216.602bn in the FY 2014/15
(a UGX 71.592bn reduction).
33. The percentage too, has reduced much more than the nominal value
because the total budget for the FY 2014/15 has increased to UGX
14,242.7bn compared to the UGX 13,064.79 that was approve in
the FY 2013/14. To note also is that the GoU expenditure (excluding
external financing) is projected to increase from UGX 1,474.391bn to
UGX 1,483.791bn. As at January 2014, the GoU had spent (including
donor funding), UGX 1,039.9bn of the education sector budget as a
whole. This represents a budget performance of 59%.
Figure 4: Education intra sector Allocations in the FY 2014/15
34. Out of the total development expenditure of UGX 366.291bn, UGX
216.603bn (59%) is projected to be sourced from donor funding. The
sector expenditure is strongly skewed to recurrent expenditure taking
90% of the total budget for FY 2014/15 (excl donor funding). More so,
the wages take up 65% of the total recurrent expenditure. The sector
has the following concerns to be rectified for every shilling to count in
the FY 2014/15: -Source: National Budget Framework Paper FY 2014/15

19
3.1.2 Inadequate capitation grants
35. The current expenditure per pupil per year in Universal Primary
Education (UPE) is UGX 6,860 only. This amount is inadequate to
facilitate effective teaching and learning in primary schools. The
ministry’s proposal to increase the capitation grant to UGX 10,000
per child per year should be supported by government. However,
with the projected enrolment numbers of UPE pupils increasing to
7.2million for the FY 2014/15, the ministry has got a short fall of UGX
22.7bn especially if the capitation grant per pupil per year is going to
be increased to UGX 10,000.
Recommendation
• The need for increasing the capitation grant remains and
education sector should also consider introducing an inflationary
parameter in the formula for calculating the capitation grants.
3.1.3 The Monitoring & Evaluation (M&C) budget
is grossly insufficient.
36. The meagre nature of the monitoring and evaluation budget of the
sector has over the years defeated its purpose. At local government
level where the bulk of the services are delivered, the school inspection
grant averaged UGX 2.4 billion. If apportioned evenly across the 134
local governments (including municipalities) it amounts to UGX 17.9
Million for the entire financial year.
Figure5:SchoolInspectionGrantTransferstoLocalGovernments
(Billion UGX)
37. Despite the increment in the M&E budget by UGX 1.6bn, the amounts
are still grossly insufficient and point to an obvious need to bolster the
budget. The significance of M&E to the effective delivery of education
services needs no emphasis and the insufficient funding could explain
many of the challenges such as teacher absenteeism, ghost teacher
prevalence and low completion rate to P.7 which currently stands at
32% among others.
Recommendation
• Government should increase the school inspection grant by
at least UGX 2bn, to improve the monitoring and evaluation
function in the LGs
3.1.4 Arrears
38. Expenditure arrears are forms of fiscal/budget indiscipline and
indicate challenges in budget execution. Contrary to popular opinion,
arrears do not imply outstanding commitments, obligations and
encumbrances (a reservation of spending authority by operating units,
prior to actually incurring any expense) but rather imply liabilities of
the government. Arrears are great risks to accountability because
their tracking gets harder with time.
39. In the FY 2011/12, while the sector registered no arrears in the budget
performance report, the Auditor General’s report for the same period
indicates that the sector had unverified domestic arrears arising from
water and electricity consumption amounting to UGX 1.61bn. From
the FY 2007/08, the sector recorded remarkable improvement in
dealing with arrears as it registered a decreasing trend. However,
in the FY 2012/13, the sector expenditure outturns indicate arrears
of UGX 5.7bn (see Table 4 below). It is notable that the approved
budget for arrears was only UGX 136 million indicating more budget
indiscipline.
Source: Budget Performance Reports and Approved Estimates

20
Table 5: Education Expenditure Outturns in Arrears (UGX Billion)
FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13
Arrears 3.09 2.92 0.23 0.0 0.0 5.665
Recommendation
• For a sector that is still struggling with funding gaps/insufficiencies, the trend before FY 2012/13 is the desirable one. Efforts should be made to
greatly minimize arrears in expenditure.
3.1.5 Special Needs Education (SNE)
40. In 2011, about 10% of Ugandan children of school going age with learning needs required SNE. In the same year, the primary subsector alone had about
197,200 pupils (2.4% of the enrolled number) that required special needs education. It is also worth noting, that SNE forms a very important component
of the equitable delivery of education services. However, the financing of SNE over the years is extremely inadequate (see Table 5)2
. Further, considering
that the available funding remains at the centre Ministry of Education & Sports (MoES), there is no SNE funding at local government level where the
service is actually delivered.
Table 6: Special Needs, Guidance and Counselling Expenditure (UGX Billion)
Expenditure Line
FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14
(approved
budget)
FY 2014/15
(projection)
SNE, Guidance & Counselling 0.91 1.55 1.89 1.68 2.16 2.06
Currently, Uganda has only nine (9) SNE schools. While the emphasis has recently been placed on inclusive schools, the infrastructural and human
resource challenges cannot allow for the effective delivery of SNE. According to the National Disability Act, Government is required to invest 10% of
the education budget to Special Needs Education (SNE). It is saddened that the proposed funding for SNE in the Ministry of Education for FY 2014/15
stands at 0.12% an equivalent of UGX 2.06bn. Worse still, this budget has been reduced from UGX 2.16bn in FY 2013/14 which is a 4.6% reduction.
Equitable access to education is a right of every individual and children with disabilities have a right to access social services including education.
The current support for SNE is still wanting in providing a conducive learning environment which accounts for a high rate of school drop outs among
children with special learning needs.
Recommendations
• Operationalise the Special Needs and Inclusive Education Initiative, specifically to recruit SNE officers, support specialized training in special needs
education and sensitize stakeholders on their role to support the education of children with special learning needs.
• Increase funding of SNE to at least 1% of the Education sector budget in the FY 2014/15
Source: Budget Performance Reports
Source: Budget Performance Reports, Approved budget for the FY 2013/14 & NBFP 2014/15
2 CSBAG study on financing special needs education, 2012

21
3.1.6 School Feeding Policy
41. Over the course of implementing universal primary and secondary
education, the issue of feeding pupils/students has been a source
of constant debate. It has also been subject to several political
pronunciations prohibiting school authorities from levying any charge
for feeding. This has left many of the pupils/students attending class
while hungry. Government doesn’t have adequate resources to
effectively feed the pupils/students and yet prohibits the charge of a
fee, however small, for their feeding.
42. However, Section 15(5) of the Education Act (2008) and Sections
6 & 8(3) (13) of the UPE guidelines clearly stipulate that any school
may levy a charge for mid-day meals as determined by the School
Management Committee in consultation with the district council. In
Subsection (6) the Act further stipulates the payment for such meals
shall be voluntary and no pupil who has opted not to pay for or take
mid-day meals at school shall be excluded from school for non-
payment for such meals.
43. It is worth noting that lunch/midday meals help attract and keep
pupils in school (Paul & Mondal, 2012). As Kibenge (2005) points out,
a partnership between World Food Programme and the government
of Uganda has seen school feeding programmes implemented in
Karamoja since the 1980s. With more support from other development
partners, the programme has increased enrolment as well as helped
retain children in school within the Karamoja sub-region.
Recommendation
• Government shouldn’t constrain schools trying to feed children
through small charges (fees and in-kind contributions) but rather
strengthen its regulatory function to ensure that the legal and
policy provisions are not abused.
3.1.7 Human Resource Constraints
44. While the Pupil Teacher Ratio has improved overtime, human
resource constrains remain in the teaching profession. Coupled with
infrastructural challenges, it implies that in some districts at a given
point, a teacher has over 100 pupils to deal with. For instance, in 2011,
the pupil to classroom ratio in government schools was estimated to
be 67:1. However, like any other average statistic, this masks wide
discrepancies with some districts such as Arua and Maracha having a
Pupil Classroom Ratio of over 100 (MoES, 2011).
45. At the centre, a review of the ministry‘s staff establishment revealed
staffing gaps (see Table 6). Out of 420 approved positions, 185
positions had been filled and the rest of the positions including 234 in
three semi-autonomous boards operating at the Ministry remained
vacant (Office of the Auditor General, 2012). Human resource gaps
constrain performance of the sector and in many cases render the
performance ineffective.
Table 7: Staffing Gaps at Ministry of Education &Sports
Entity Approved positions Positions Filled Positions
Vacant
1 Ministry Headquarters 279 115 164
2 Uganda Business and Technical Examinations Board (UBTEB) 52 20 31
3 Uganda Allied Health Examinations Board (UAHEB) 24 12 12
4 Uganda Nurses and Midwives Examinations Board UNIMEB 23 9 14
5 Directorate of Industrial Training. (DIT) 42 29 13
TOTAL 420 185 234
21
Source: Auditor General’s Report, 2012

22
Recommendation
• The gaps should therefore be filled, especially the recruitment of
teachers.
3.1.8 Budget shortfall for assessment of PLE
and secondary examinations
46. The Number of pupils to be examined in the FY 2014/15 is projected
to be 502,708. At a unit cost of UGX 14,000 per pupil to be examined,
the ministry should be receiving UGX 7.038bn. However, the current
budget provides only UGX 5.966bn which provides a shortfall of
UGX1.073bn. For UCE & UACE, the ministry will have a shortfall of
UGX 2.157bn on both programmes. Inability to cater for examination
bodies to function properly will discredit our examination system and
the quality of our education.
Recommendation
• Government should provide adequate resources for PLE, UCE
and UACE assessment
3.2 Agriculture Sector
47. Agriculture still plays an important role in Uganda, accounting for
24.4% of GDP (UBOS 2012). The sector employs over 75% of the
country’s labour force whose nominal per capita income stands at
$506 (National Development Plan 2010/11-14/15). The smallholder
farmers, based in the rural areas, account for 85% of the country’s
33 million population (World Bank 2010). Despite the importance of
the sector, reviews of public expenditure and programs clearly show
that the agriculture sector has been declining; agricultural output is the
lowest in all the sectors of the economy and is far below the National
Development Plan (NDP) target of 4.9%.
48. Besides the decline in agriculture, Uganda has up to now not prioritized
agriculture in her public spending to the extent that the sector is set
to receive only 3.1% of the national budget (NBFP 2014/15). Further
still, the performance of the agricultural sector has declined steadily
from 7.9 percent in 2000/01 to 1.9 percent in 2012/13. This has been
accelerated by poor absorption capacity of budget resources with
regard to expenditure, As such, service delivery related activities have
been negatively affected and thus performance compromised.
Table 8: Agriculture Sector Allocations for the FY 2014/15
2013/14
Approved
Budget
Projections
2014/15
Recurrent

Wage 62.094 62.094
Non-Wage 62.861 62.861
Development

GoU 190.174 223.174
Ext. Fin. 67.664 92.644
GoU Total 315.129 348.129
Total GoU +Ext
Financing(MTEF) 382.793 440.773
Grand Total 405.38 463.010
We would like to commend government for increasing the agricultural sector
budget from UGX 382.7bn (2.9% of national budget) in the FY 2013/14 to UGX
440.7bn (3.1% of national budget). Whereas the GoU expenditure is projected
to increase by UGX 33bn, from UGX 315.129bn in the FY 2013/14 to UGX
348.129bn in the FY 2014/15, the donor funding for the sector too is projected
to increase by UGX 24.98bn, from UGX 67.664bn in the FY 2013/14 to UGX
92.664bn.This donor funding will make 29.3% of the sector development
budget. To note is that the NTR is projected to reduce from UGX 22.586bn in
the FY 2013/14 to UGX 22.237bn in the FY 2014/15.

23
Figure 6: Intra-sectoral allocations for the Agriculture Sector in
the FY 2014/15
49. The Civil Society Budget Advocacy Group (CSBAG) would wish to
call upon government to give high priority to the agriculture sector by
allocating to it at least more than 6% in the next FY 2014/15. Among
others the following should be the main focus: -
3.2.1 An Inclusive Agricultural Extension
System:
50. According to the National Development Plan 2010- 2014, it clearly
indicates that only 14% of farmers are visited by an extension worker
in a period of 12 months. Today NAADS is regarded the national
programme on extension. Despite the strides that have been made,
farmers are not adequately benefiting from extension services being
offered. Instead it has remained selective and discriminative leaving
the majority of farmers outside their target. Further still research has
shownthatdemand-drivenextensionisunlikelytobethesolutiontothe
challenge of effectiveness but rather an inclusive and well integrated
system that is fully funded and able to reach a wider spectrum of rural
farmers for improved production and productivity.
Recommendations
• In the FY 2014/15, the government should increase funding to the
extension system where deliberate effort to integrate modern
approach with the traditional farmer approach.
• There is also need to consult the local farmers, of what they are
doing besides modern innovations.
3.2.2 Access to Credit Facilities:
51. Farmers cite the 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.
Government also spends very little to expand poor farmers’ access
to credit. Save for the efforts being made by Government under the
Agricultural Credit Facility (ACF), small holder famers have largely
not benefited. Important to note is that lending to agricultural value
addition was increased by 4% from 34% in 2008 to 38% in 2009 but
there is still a lending gap especially to small scale producers (PMA,
Financial Year Book, 2012). The proposal to create a Cooperative
Bank is welcome but it should be fast-tracked to quickly respond to
the overarching need of credit facilities in the sector.
Recommendation
• Allocate earmarked funds for lending to small scale farmers
at affordable interest rates. In addition Government through
the MoFPED should 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.
3.2.3 Revival of Farmer/Producer Cooperative:
52. Cooperatives have been identified as crucial strategies for enhancing
incomes and employment opportunities for households as they enable
collective action but also enabling their access to resources and market
opportunities. Refurbishing the infrastructural system of cooperatives
such as harmonizing operations of SACCOs, producer cooperatives,

24
the warehouse receipt system as well as
input support from a farmer-centred point of
view is more desirable in the development of
farmer institution is also works as a strategy
for increased market access. Additionally
facts on the ground show that the SACCOs/
Area Enterprise Cooperatives that people have
begun on their own (farmer-led) flourish and
yet those which are influenced or started by the
government decline in a short period of time.
Recommendations
• The government should support and
strengthen the cooperative movement to
promote collective marketing and stable
prices for farmers as well as enabling the
farmers to enjoy other benefits that accrue
for such associations/cooperatives.
• The government should also expedite the
reform process of the 1991 Co-operative
Societies Act, to ensure considerable
autonomy and facilitating a well-
functioning of Agricultural Co-operative
Movement in Uganda.
3.2.4 Enhancing Small Holder
Farmers’ Adaptation to
Climate Change:
53. Uganda’s agriculture is still rain-fed despite
the abundance of water in the country as
provided both by rains and water bodies. This
has rendered the sector erratic, inefficient and
unpredictable. The bulk of financing in regard
to water for production has consistently been
left to donors under such projects as Water
for Production and the Livelihoods Support
Programme among others. Micro Irrigation as
a method of production has been neglected
especially for small holder famers, despite
the simplicity of its basic technology and its
enormous potential in Uganda’s agricultural
sector.
54. It has been noted with concern that money
for irrigation has always been shifted to the
Ministry of Water and Environment but up to
now farmers still face a challenge of crop failure
due to prolonged droughts. We commend
government for the installation of 4 small scale
irrigation and water harvesting sites completed
in Nebbi, Maracha, Bulisa, Rubirizi and the
other 3 sites in Katakwi. This is however in
contrast to the 30 planned irrigation schemes in
the FY 2013/14.
55. In the FY 2014/15, government plans to
construct 50 valley tanks with equipment from
the Japanese Government. It also plans to
construct 40 small scale irrigation sites. UGX
133,333,000 is the planned allocation for the
small scale irrigation demonstration sites in the
FY 2014/15, the same as in the FY 2013/14 yet
the output has been increased to 40 from the
30 set at the beginning of this FY 2013/14. In
real terms, the allocation for the FY 2014/15
is UGX 124,726,848 only taking the projection
for inflation in the FY 2014/15 to be 6.9%. The
reason stated is that the priority has been
moved to use of fertilizers and that irrigation
will be dealt with through isolated NAADS
programmes.
Recommendation
• We propose that Government earmarks
funds directed to promoting appropriate
micro-irrigation technologies that can be
adopted by the majority of farmers to
enhance their adoptive capacity to climate
change. This investment will also serve
a double purpose of mitigation to climate
change.
We would like to
commend government
for increasing the
agricultural sector
budget from UGX
382.7bn (2.9% of
national budget) in
the FY 2013/14 to
UGX 440.7bn (3.1% of
national budget).
24

25
1.1.5 Good Quality Seed/Agro- Inputs
for Small Holder Farmers:
56. Good quality seed is key to improving crop productivity. Currently
the Government is in its final stages of passing a Biotechnology
and Bio-safety Bill that intends to introduce and commercialize
Genetically Modified Organisms (GMOs). Aware, that this is a food
security issue, it should be noted that, the introduction of GMOs
has threatened the continued existence of traditional seeds which
have been feeding the Ugandan population since time immemorial.
Once the GMOs have displaced traditional seeds, hunger
will definitely surface.

Recommendations
• We propose that, FY2014/15 allocates funds to put in place
mechanisms that improve the informal seed sector; by
promoting good quality seeds through establishing model
farms for seed multiplication and distribution to other grass
roots farmers.
• There should also be exchange learning visits among the
farming communities to improve on their local innovations
and adopt good farming practices, other than introducing
GMOs which further enslave farmers to be dependent on seed
supplies.
1.1.6 Creation of numerous Semi-autonomous
Projects within the mother Ministry
57. We have noted that the ministry has been over split into semi-
autonomous sectors like; NAADS, NARO, and other agencies for
the promotion of coffee, cotton and oil among others. The creation
of these secretariats has left the ministry with just a regulatory and
coordinationrole.Thishasalsobeenacceleratedbytheuncoordinated,
conflict of interest and multiple approaches employed by the different
stakeholders thus causing the declining performance of the sector.
The ministry has not given effective direction in a coordinated manner
to the technical and other players in the sector hence creating the
mess which is currently killing the sector.
Recommendation
• We propose that the ministry comes up with a mechanism
for direct coordination of the work of different stakeholders in
the sector, including civil society, that are receiving funds for
agriculture.
3.3 HEALTH SECTOR
58. Uganda has made significant progress in improving most of the key
health sector indicators between 2001 and 2010. These include:
accelerated declines in infant mortality (from 81 to 54 per 1,000
births), under five mortality (from 156 to 90 per 1,000 live births), and
maternal mortality (506 to 352 per 100,000 births). There has also
been a significant improvement in contraceptive prevalence rates
(15% to 30%), and an increase in the proportion of births attended
to by skilled personnel (38% to 59%), over the same period. The total
fertility rate also declined from 6.7 in 2006 to 6.2 in 2011. The use
of modern family planning methods has also increased in the last 15
years from 18% to 26% among the married.
59. According to the NBFP for the FY 2014/2015, the health budget
projection is 1,197.80bn which is 8.4% of the overall national budget.
This indicates a decrease in health sector funding from 8.6% in the
FY2013/2014.
25

26
Table 9: Health sector budget Allocations for the FY 2014/15

2013/14
Approved Budget
Projections
2014/15
Recurrent

Wage 305.666 305.666
Non-Wage 331.499 333.799
Development

GoU 75.38 81.380
Ext. Fin. 416.668 478.680
GoU Total 712.546 720.846

Total GoU +Ext
Financing(MTEF) 1,129.214 1,199.526
Grand Total 1,146.51 1,217.892
This continued decrease in health sector budget funding is
inconsistent with the commitment made by the government
to allocate 15% of the national budget to health as per the
Abuja declaration. This budget reduction is a retrogressive
measure that will only cripple further health service delivery
in the country. Below, we take a more critical look at the
budgetary allocations to the sector for the year 2014/15: -
60. From figure 8 below, we note that the allocation for the
National Medical Stores has reduced from UGX 219.375bn
in the FY 2013/14 to UGX 218.37bn in the FY 2014/15. The
regional referral hospitals total budget has also reduced from
UGX 72.4bn to UGX 70.5bn in the FY 2013/14 and FY 2014/15
respectively. This is likely to lead to over-crowding at Mulago
National Referral Hospital if patients are not served at the
regional referral hospitals.
Figure 8: FY 2014/15 Health sector allocations
Source: NBFP FY 2014/15

27
3.3.1 Funding highlights for the health sector
in the FY 2014/15
61. There is still a problem of concentration of resources at the centre
yet most of the people use the public health care system at the local
government level. Figure 8 indicates that the allocation for the Ministry
of Health is 524.403bn while the one for local governments/Public
Health Care (PHC) is 303.156bn which is 43% and 25% respectively.
62. On a positive note, we would like to commend the government for
increasing the budget allocations for the Uganda Cancer Institute
from 7.382bn to 10.472bn and Uganda Heart Institute from 7.961bn
to 11.111bn. This is a step in the right direction towards recognition of
the growing problem of non-communicable diseases, for which many
Ugandans seek treatment abroad due to limited services in country.
The Uganda Heart Institute will be able to carry out more open heart
surgeries.
63. The budget allocation for the Uganda Blood Transfusion Service
(UBTS) has also gone up from 4.074bn to 6.374bn. This is also
commendable because there have been many cases of people dying,
especially maternal deaths due to lack of blood at health facilities. It
also indicates a response to the recent crisis that saw Nakasero Blood
Bank running out of blood.
3.3.2 Critical activities underfunded in the FY
2014/15
64. The health sector has identified what they considered critical activities
in the NBFP submitted for parliamentary scrutiny, yet they remained
under or unfunded. These include:
a) No funds have been provided for wage enhancement for the other
health workers except medical officers at Health Centre IIIs and IVs.
UGX 129bn is required for salary enhancement for all staff in the
sector annually.
b) Recruitment of health workers both in local governments and MOH
headquarters to counter the low staffing challenge to match the
population increase. UGX 2.5bn is needed to recruit an additional
3,000 workers, which is the shortfall for the 2012/2013 recruitment
drive.
c) The non-wage recurrent budget needs to be revised to enhance
health service delivery in the local governments. UGX 41.6bn is
required to make the current structure to operate at a reasonable
level. Currently some health facilities have a budget of UGX 120,000
per month to deliver all the required services excluding medicines.
d) Rehabilitation of general hospitals. Many of the general hospitals
some of which were constructed in the 1930s and 1960s are in a
bad shape. The total requirement is UGX 826.8bn excluding those
being covered under the on-going projects. They propose a phased
intervention starting with UGX 25bn in the first year.
e) UGX 40bn is required for the first year to support the introduction
and implementation of the Uganda ambulance service for local
governments and regions. This is to improve the management of
emergencies and referrals in the country.
This underfunding is likely to cause inefficiencies in service delivery and points
to poor government planning and prioritization for improved health service
delivery.
Recommendations
• Re-prioritisation of health sector budget: Since the budget
process is still on-going up to the time of presentation of policy
statements, we recommend that the Ministry of Health re-aligns
its budget towards more pressing needs at lower health units as
opposed to large shares of resources left at the headquarters.
More money should be allocated to regional hospitals, district
health budgets, mental health, vaccination and recruitment
of health workers. Universal access and equity in resource
distribution should be ensured especially to cater for hard-to-
reach areas such as the Island districts which include, Namiyango,
Kalangala, Buvuma and parts of Wakiso and Mukono.
• Diversion of funds: We do recognise the gross underfunding
to the health sector and in light of the funding challenges, we are
recommending that the Ministry of Health available resources
be put to optimal use. The Auditior General’s report for the FY
2010/11 notes that UGX 620,320,431 meant for medical and
agricultural supplies (expenditure item 224002) was utilised
on payment of salaries for intern doctors and sensitization

28
workshops. Such diversion of funds hampers implementation of
planned activities.
• No releases - related to the above, in FY 2013/2014 approved
budget, money was allocated to expand and rehabilitate Kawolo
Hospital out-patient department, theatre and maternity, construct
four units of staff houses and mortuary but no release was made.
This is a call to all stakeholders to engage in budget tracking to
ensure that all the funds approved and disbursed are spent on
the delivery of health outcomes.
• Enhance monitoring and supervision of health services
- The budget for the sector monitoring by the ministry of health
should be increased to reflect government intentions of improving
sector monitoring. The monitoring and supervising vote function
has not received any increment which currently stands at UGX
0.85bn in the FY 14/15 budget proposal.
3.4 Water & Enviromnment
Sector
65. Uganda is not on track to meet the 2015 national sanitation coverage
target of 72%. The country loses about UGX 386bn (USD 177 million)
annually due to poor sanitation; equivalent to USD 5.5 per person in
Uganda or 1.1% of the national Gross Domestic Product (GDP). An
estimated 3.3 million Ugandans do not have access to toilets and
practice open defecation, yet less than 650,000 toilets need to be built
and used to eliminate this practice.
66. The Water and Environment sector was allocated 2.9% (UGX383.9bn)
in the FY 2013/14 national budget, a 0.3% reduction from 3.2% in FY
2012/13. The allocation to the water sector has slightly increased to
3.0% (UGX 430.8bn) of the national budget in the FY 2014/15 budget
projections. Whereas government expects to spend a total of UGX
430.8bn in the FY 2014/15, 39.2% (UGX 169bn) is expected to come
from donor funding through project support. This is a 10.2% (UGX
17.3bn) increase in donor commitment towards expenditure in the
sector.
Table 10: Water & Environment Sector Budget for the FY
2014/15
Approved
Budget FY
2013/14
Projection
2014/15
Recurrent Wage 12.354 12.704
Non-Wage 16.498 17.148
Development GoU 203.314 231.954
Ext. Fin. 151.690 168.970
GoU Total 232.166 261.806

Total GoU +Ext
Financing(MTEF) 383.855 430.776
Grand Total 404.445 447.713
Specifically this donor funding makes up 42% of the development expenditure
for the sector. We commend governments’ efforts for increasing its
expenditure to the Water & Environment sector by 11.3% from UGX 232.2bn
in the FY 2013/14 to UGX 261.8bn in the FY 2014/15 excluding donor support.
Figure 9: Intra sector allocations for the FY 2014/15

29
67. In the FY 2014/15, the Ministry of Water & Environment will have an
increase in allocation of over UGX 45bn while the local government
allocation will increase by only UGX 1bn. While the allocation for the
National Forest Authority will reduce by UGX 3bn in the FY 2014/15,
the allocations for National Environment Management Authority
(NEMA) and Kampala City Council Authority (KCCA) will remain the
same.
3.4.1 Challenges facing the Water &
Environment Sector
There are serious critical issues and challenges which must be addressed
with regard to improving the status of environment and natural resources if
Uganda’s future is to be sustained. These among others include:
§ Inadequate funding for the Rural Water Supply &
Sanitation (RUSS) at LG level - We would like to commend
government for the increase of funds allocated to the sub-sector
from UGX 30.6bn to UGX45.6bn in the FY 2013/14 and FY 2014/15
respectively at the national level. To this extent, the increase in
resource allocation to the Urban Water Supply and Sanitation
(UWSS) and Water for production vote functions in the Ministry of
Water & Environment is plausible.
§ We however note with concern that these same vote functions at
LG level are grossly underfunded. The RWSS budget at the LG level
has not changed and is fixed at UGX 62.4bn. According to the NBFP
FY 2014/15, lack of transport which hampers the work of district
extension staff; and lack of appropriate technology for flood-prone
areas as well as areas with collapsing soils especially in Eastern
Uganda continues to haunt the RWSS at the LGs.
§ Access to safe water in the rural areas is stagnating and this is
attributedtothede-commissioningofsomepointsourceswhichhave
remained non-functional for over 5 years. Similarly costs for water
supplies are increasing due to increasing environmental degradation,
climate change and declining water quality and quantity. There is
also the problem of inadequate capacity in Higher and Lower Local
Governments (LLGs) to adequately support implementation of the
water and sanitation activities and environment management.
Recommendation
• There is need to significantly increase the funds allocated under
the sector budget to the District Water and Sanitation Grant.
68. Inadequate preparation for potential environmental shocks
- Uganda is expected to exploit its oil resources for a fixed period of
time after which the deposits will be exhausted. The potential negative
impacts of oil exploration may include reduction in tourism revenue
and pollution-related diseases if stringent mitigation measures are not
adequately implemented. Government plans to construct oil pipelines
transporting the refined resource from Uganda to other East African
countries are welcome but extra steps should be taken to ensure that
there will be no destruction of natural ecosystems.
Recommendation
• There is need for government to invest in environmental
conservation and restoration programmes with respect to
oil exploitation in Uganda. An Environmental tax levy on oil
production schemes is recommended to generate revenue
for financing such environmental programmes including tree
planting, watershed protection and wetlands management.
70. High encroachment on wetlands - There is massive
encroachment of wetlands especially urban areas for settlement and
industrial growth due to unclear land use planning and corruption. The
EnvironmentalProtectionForcewhichwouldotherwisehaveprotected
the environment and enforced the law has not been budgeted for in
the FY2014/15 to adequately carry out its enforcement and protection
role of particularly wetland resources across the country.
Recommendations
• There is need for an adequately well trained, well-funded
Environmental Protection Unit that is maximally deployed
around the country to curb illegal encroachment in wetlands.
• Government should endeavour to harmonize its environmental
laws particularly with regard to natural resource tenure in order
to curb encroachment on wetlands.

30
3.5 Works & Transport
Sector
71. The works sector has been steadily operating and not often affected
by huge budget cuts. In the FY 2013/14 the sector was allocated UGX
2,510.7bn and UGX920bn had been released by December 2013. The
NDP recommends that the sector should receive at least 21.3% of
the national budget but this hasn’t been achieved so far as it currently
stands at 19.2%. Although the projected sector budget has increased
to UGX 2,575.5bn, the sector share has reduced to 18.1% of the
national budget.
Table 11: Works & Transport sector budget for FY 2014/15
FY 2013/14
Approved
budget
Projections
2014/15
Non-wage 392.13 467.38
Development GoU 1,409.65 1,409.65
Ext. Fin 680.852 670.478
GoU Total 1,829.81 1,905.06
Total GoU+Ext. Fin=MTEF 2,510.66 2,575.53
Non-Tax Revenue 2.603 2.603
Grand Total 2,513.26 2,578.14
In the FY 2014/15, the total development budget is projected to be UGX
2,079.67bn of which UGX 670.5bn (32%) is to be sourced from donor
funding.
Figure 10: Intra-sector allocations for the FY 2014/15
3.5.1 Key Sector Concerns
72. Lack of Value for Money in sector expenditures - Despite
the huge budget allocations to the sector compared to other priority
sectors like health and education, there are still glaring gaps observed
in the performance of the works and transport sector. For example the
aAuditor General’s report 2012 indicates that Uganda National Roads
Authority (UNRA) overpaid UGX 47 billion to various contractors on
three road construction contracts arising from errors in the application
of variation of price formula used in computing compensation amounts.
Recommendation
• We recommend that the ministry embraces open contracting
through which transparency and accountability for public
resources can be enhanced. More information on contracting
should be availed to the public to enable effective monitoring
of the construction work. The only way to promote appropriate
contract management is by keeping the public and other relevant
stakeholders in the know.
Source: National Budget framework Paper FY 2014/15

31
73. Operationalisation of the Uganda Road Fund (URF) Act
2008. Since the URF enactment in 2008, it has continued to operate
as a department of the Ministry of Finance and not as it was envisaged
in the URF Act. According to the URF Act, 2008 the road user charges
were supposed to be collect and be directly transferred to the URF
account but this is not yet done as the fund still draws its monies from
the consolidated fund.
74. It has been argued that the URF being roped into the Medium Term
Expenditure Framework (MTEF) budgetary process has made it
difficult to predict with any degree of certainty that the designated
agencies programs will be funded adequately, reliably and in a timely
manner. It has thus become very crucial for the direct transfer of the
RUCs to the URF account such that funding road maintenance can be
stable and predicate.
75. The sources of finances for the URF as envisaged in section 21 of the
URF Act, 2008 include fuel levies, transit fees, road license, axle load
fines, tolls, traffic and road safety fines, appropriations by parliament
and donations/grants. The road license which is one of the proposed
sources of revenue for the Fund was abolished in the Budget of FY
2007/08. The other possible finance sources listed are not operational
or provide very insignificant amount of resources. The major source of
revenue clearly identified at the moment is the fuel levy.
Recommendation
• It is imperative that the Uganda Revenue Authority Act is
amended to allow the direct remittance of the RUC’s directly to
the URF account.
76. Limited absorption capacity - Limitedabsorptioncapacitybysome
agencies under the works sector has been identified as an impediment.
A case in point are the maintenance funds allocated and released but
are all not utilized as some agencies have had low absorption of the
funds leading to delayed implementation of the planned works. This
leads to significant roll over of funds to the proceeding financial years
as shown in table 10 below. District Urban Community Access Roads
(DUCAR) roads carried over un-utilized funds of UGX 3.922bn to FY
2010/11 followed by Uganda National Roads Authority (UNRA) that
had unutilized funds amounting to UGX 1.159bn. KCCA carried over
UGX13bn that had not been utilised in the FY2011/12. This had been
accumulated over three years, followed by districts that did not utilize
over UGX 3bn and this was rolled over into the proceeding financial
year. Much improvement is noticed with UNRA which had 50 million
unutilised and rolled over into FY 2011/12.
Table 12: The Rollover of Maintenance Funds (2009/10-
2010/11)
Network
Agency Carried Over to
FY 2010/11
(UGX bn.)
FY 2011/12
(UGX bn.)
FY
2012/13**
National UNRA 1.159 50.81
KCCA

3.922

13,272.56*
DUCAR Districts 3,881.16
Municipalities 809.96
Community
Access Roads

Totals 5.081 18,014.49
We are also concerned about the value for money in road construction and
delays in completion of road works. A case in point is the Mbale-Soroti
road, whose construction has over delayed and the quality of the roads is
questionable. In addition, the cost of road construction in KCCA has been noted
as very expensive compared to the national average. Budget allocation to
such agencies is done cognizant of their absorption capacity. There is need for
a strict adherence to work plans for appropriate implementation. There is also
great need to emphasize the early commencement of the procurement of road
works. However there is also great need for Ministry of Works and Transport
(MoWT), Ministry of Local Government (MoLG) and Public Procurement and
Desposable Authority (PPDA) to play a key role in addressing the capacity
constraints at the agencies levels.
Recommendation
• We propose an increase in funding for DUCAR to enable local
governments to undertake repairs of community roads.

32
77. Citizens’ participation in government procurement - On
strengthening accountability in public service delivery, Hon Maria
Kiwanuka in the Budget Speech 2013/14 said that “the main challenge
of service delivery in Uganda is not lack of sufficient financial resources,
but the achievement of maximum efficiency and effectiveness in the
utilization of limited resources. Challenges to service delivery include
delayed implementation of government projects, lack of adherence
to financial management procedures, as well as corruption and
misappropriation of public resources and that the government is
committed to improving transparency and accountability in order to
achieve enhanced service delivery”, for which several reforms have
already been undertaken.
78. Noting closely were the Rollout the Integrated Financial Management
System (IFMS) in all Government Ministries, Departments and
Agencies; as well as the review the Public Investment Plan (PIP)
projects to include only those for which cost-benefit analysis and
feasibility studies have been conducted and for which sources of
financing have been secured.
Recommendation
• Basing on the observation embedded in the concern above,
there is need for government to make such systems (IFMS) open
to access by civil society (CSBAG) for purposes of constructive
engagements and also as a means of improving the quality of
citizen feedback. There is also need for government to consider
Civil Society in the processes of reviewing public investment
plans at all levels such that the views from the grassroots are
adequately catered for.
3.6 Social Development
Sector
79. The Social Development Sector works to strengthen communities’
rights and provide them with social protection. Its major focus is to
empower communities to harness their potential through cultural
growth, skills development and labour productivity. The sector is led
by the Ministry of Gender, Labour and Social Development (MGLSD)
and works closely with affiliated statutory institutions established by
Acts of Parliament which include, inter alia, the National Women’s
Council, the National Youth Council, the National Council for Children,
National Cultural Centre, the National Library and the Industrial Court.
Table 13: Social Development Sector Budget Allocation
FY 2014/15

Approved
Budget FY
2013/2014
Projections
2014/15
Recurrent

Wage 2.962 2.907
Non-Wage 24.572 24.572
Development

GoU 18.313 24.730
Ext. Fin. 0.000 2.090
GoU Total 45.848 52.209
Total GoU +Ext Financing(MTEF) 45.848 54.300
Grand Total 46.224 54.676
The Social Development Sector budget projection has increased from UGX
46.2bn to UGX 54.67bn in the FY 2013/14 and FY 2014/15 respectively. This
is an 18% increment from the current FYs allocation. In terms of proportion to
the national budget, the sectors allocation has increased from 0.3% in the FY
2013/14 to 0.4% in the FY 2014/15.
Figure 11: Intra sector allocations for the FY

33
2014/15
80. Whereas the rest of the vote allocation projections
have remained constant, it’s only the Ministry of
Gender, Labour and Social Development that is
projected to receive an additional projected allocation
UGX 8.5bn in the FY 2014/15. In the FY 2014/15 the
MGLSD’s projected budget is UGX 43.857bn of which
UGX 25.2bn (57.47%) is entirely on policy, planning
and support services.
81. Inadequate funding to the sector: According
to the NBFP FY 2014/15, the sector MTEF ceiling lies
at UGX48.25bn. This is extremely low for the sector
which covers the whole country under community
development and empowerment to deliver on its
mandate. The Ministry has huge expenditure such as
rent (UGX 2.43bn), council subventions (UGX 3.88bn)
and others which make the sector ceiling inadequate.
Furthermore, the establishment of regional Equal
Opportunities Commission (EOC) offices and
enhancing the salaries of the EOC staff are some of
the neglected yet crucial expenditures.
Recommendation
• We strongly recommend that the current sector
ceiling be revised upwards.
82. Inadequate funding for Community Develop-
ment function in the LGs: According to the NBFP
the CDF at LG has been allocated UGX 400million for
FY 2014/15 upto FY 2017/18. Our analysis has shown
that each LG on average will receive UGX 50,000 per
quarter for the CDF. This amount is further reduced
by bank charges, transport to collect it and inflation.
The Ministry requires UGX 7.2bn to fully develop the
CDF at LG level.
Recommendation
• We strongly urge government to increase
resource allocation to the CDF to operate
effectively and efficiently.
83. Non-operationalization of the Kiswahili
Council: Under the Decision (EAC/CM/10/Directive
05) EDUC C10, made by the 9th Council of East
African Community (EAC) Ministers, all member
states should establish National Kiswahili Councils
under the Ministry responsible for Culture to promote
trade and labour movement within the region. We
would like to bring to the attention of government that
the Kiswahili Council is not in place due to lack of UGX
1.9bn to start it.
Recommendation
• For Uganda to competitively to participate in
regional politics and trade, it’s imperative that
the Kiswahili Council is put in place to guide and
oversee the implementation of Swahili as the
national language.
3.7 Trade, Tourism And
Industry Sector
84. Trade can be a very powerful tool for poverty
eradication, creation of employment and the
promotion of sustainable development. Trade is
central in the realization of Vision 2040: “To transform
Uganda from a low income to a modern middle
income country within 30 years”.
85. The contribution of the trade and industry sector to
Uganda’s GDP has risen from 37.2% in FY 2004/2005
to 43.3% in FY 2011/2012 growing at an average of
7.7% per annum reflecting the relative importance of
the sector. The Trade, Tourism and Industry sector
contributed 30% to GDP in the FY 20112/13. In the FY
2013/14, it was allocated UGX 57.8bn (0.44%) of the
national budget. This resource envelope however is
still not sufficient to boost the trade sector in Uganda.
The Ministry has
huge expenditure
such as rent (UGX
2.43bn), council
subventions
(UGX 3.88bn)
and others
which make the
sector ceiling
inadequate.
33

34
Table 14: Social Development Sector budget for the FY 2014/15
Approved Budget
FY 2013/14
Projections
2014/15
None wage 17.557 23.876
Development GoU 21.32 21.46
Ext. Fin 2.949 8.852
GoU Total 51.757 59.407
Total GoU + Ext Fin 54.706 68.259
NTR 5.759 6.115
Grand Total 60.465 74.374
In the FY 2014/15, the total sector budget projection is set increase
to UGX 74.374bn from UGX 60.47bn in the FY 2013/14. We welcome
government efforts in increasing the sector budget as trade and
tourism are key sectors that contribute to national development.
However the sector faces a number of challenges that need to be
addressed.
86. Growing trade deficit: The trade deficit is growing at an increasing
rate- it was reported to be USD 2,373.35million in 2010/11, USD
2,581.07million in 2011/12 and it was reported to have increased to
USD 2,617million in May 2013 by Bank of Uganda. In January 2014,
the trade deficit was reported to be USD 288.30 Million. This can
be attributed to the continued export of raw materials & importing
finished/value added products. Uganda has a systemic trade
deficit as a result of the country’s dependence on fuel
imports. Uganda is also a net exporter of agricultural products
such as coffee and cotton.
Recommendations
• We urge government to encourage back ward and forward
linkages with the agriculture sector in various value chains.
This will encourage vale addition and improve the value of the
agriculture export thus reduce the trade deficit.
87. Establishment of a Cooperative Bank - Cooperatives which
enhance collective marketing have greatly disintegrated and closed
up. While the Budget Framework Paper FY 2014/2015 recognizes
that cooperatives play a vital role in job creation, food security
and reduction of post-harvest losses, there has hitherto been an
inadequate government effort to revive them. For example, limited
government funding and political interference have hampered many
of their operations, in the process, hindering some of the cooperatives
from functioning efficiently.
88. We applaud government efforts on improving availability of
affordable financing to agriculture and micro and medium enterprises
development including restoring Uganda Cooperative Bank. The
reestablishment of the Cooperative Bank is long overdue since in
almost all developed countries support to small scale farmers and
entrepreneurs has been a successful strategy for inclusive economic
development.
Recommendation
• We advise government that instead of spending resources on the
study to confirm the already known, let government use these
resources to remodel the Agriculture Credit Facility, support the
Current Bill on Agriculture Bank to establish a cooperative bank.

35
4.1 Fiscal Decentralization
89. We commend government on the proposal to simplify the various
conditional grants by reducing the number of conditions. This will
give more flexibility to local governments to address their peculiar
needs in service delivery. We therefore, request government to go
beyond reducing the number of conditions to also allocate more
funds (beyond the current 20%) local government programmes
since they are at the frontline in service delivery. The situation is not
good even at the sectoral level where less money is spent at the
local government level as illustrated in figure 12.
4.2 Public Administration
90. We commend government on the proposal to freeze the creation
of new local governments. This will save the country resources that
canbeusedtoimproveservicedeliveryinthesectorssuchashealth,
education and agriculture. However, government has continued to
experience difficulties in payment of allowances, ex-gratia, salary
and gratuity of political leaders due to lack of adequate information.
We believe that this challenge can be addressed through expediting
4
OTHER BUDGETARY ISSUES
Figure 12: Percentage share of Local Government to
Selected Sector Budgets FY 2014/15

36
the process of electing lower level LCs (LCI, and LCIIs) and providing
support for their effective functioning. The current LC system is weak,
disoriented and demotivated and has outlived its usefulness. We
request government to allocate funds in the next year’s budget for
election of LCIs and LCIIs.
4.3 Salary Enhancement for
Public Servants
91. We applaud government provision of an additional UGX 450bn for
the enhancement of Teachers’ and other Public Servants’ salaries
in the FY 2014/15. We are however concerned that this amount
is not sufficient to address the salary demands especially among
teachers. There is therefore the need to allocate additional resources.
Secondly, government should expedite the establishment of a salary
review commission to harmonise salaries and remuneration of public
servants.
4.4. Court Awards:
92. While we appreciate government’s decision regarding ministries being
responsible for court awards from their MTEF provisions, we further
propose that in cases of violation of human rights by individuals,
such individuals should be held liable to pay for the damages and
compensations to the victims, rather than using tax payers’ money.
4.5 Decisive action on theft of public
funds:
93. Corruption has continued to rob Ugandan citizens of the right to enjoy
public services that they pay for through taxes. Corruption in Uganda
has changed shape, thus requiring more innovative ways of tackling it.
A Human Rights Watch Report released in 2013 documents Uganda’s
failure to hold the highest members of its government accountable
for large scale graft. A lack of political will has crippled Uganda’s
anti-corruption institutions and thus undermining any efforts towards
fighting corruption. To date it remains unclear how many actors have
been brought to book or how much of the stolen funds has been
recovered.
94. In addition there is limited effort towards addressing petty corruption
especially at local levels, yet it is killing the moral fibre of the Ugandan
economy. For instance, teacher and health workers absenteeism are
clear cases of petty corruption. We urge the government to expedite
the proposed anti-corruption amendment bill that seeks to ensure
that corrupt officials first of all refund the lost/embezzled funds, suffer
imprisonment and forthwith forfeit public office for life. This will serve
to deter the practice and enforce zero tolerance to corruption.
4.6 Gender and Equity Issues
95. TheBudgetCallCirculardemandedthatgovernmentagenciesaddress
gender and equity issues through allocation of resources. However,
most sectors continue to allocate resources without considering the
gender and equity concerns. We request the Ministry of Finance
Planning and Economic Development to put in place enforcement
mechanisms that should penalise sectors which do not comply and
reward those that do.
96. In addition, in order for Parliament to take its central role in promoting
gender equality, we propose that before Parliament debates and
approves the annual budget, a “” is produced to show the extent
sector plans and budget address gender and equity concerns.
4.7 Climate Change and Disasters
97. Climate change threatens to undo decades of development efforts in
a short time as has been witnessed in some regions of the country.
Climate-related disasters, droughts, floods, landslides, wind and hail
storms are estimated to destroy 800,000 hectares of crops annually
leading to economic losses worth USD 75 million (USh173 billion).
Additionally, economic losses resulting from destruction of civil
works, transport accidents, epidemic outbreaks, and climate-related
conflicts are estimated to cost well over USD 31 million (USh72 billion)
annually.
98. However, the current budget architecture does not address climate
change. According to a study by ACODE and ODI, the total spending
on climate change-relevant activities is estimated at less than 1
percent of total government expenditure, and this has remained
broadly constant over the four year period, 2008/90-2011/12. This

37
level of spending is about 0.2 percent of GDP, which is in stark
contrast to that recommended in the draft Implementation
Strategy of the Climate Change Policy of around 1.6 per cent
of GDP.
99. We request government to prioritize the climate change
implementation strategy and ensure that all priority national
investments, the proposed timeline and funding requirements
are met. In addition, the necessary capacity of all relevant
institutions especially at local government level, should be
built to allow implementation of priority actions.
5.0 CONCLUSION
100. Budgets are an important political instrument used to address
people needs. The welfare of the citizens is totally dependent
on the way resources are mobilized, allocated and utilized.
We urge government to continue its budget reforms that
are geared towards improving efficiency and effectiveness
in delivery of public services. As CSOs our watchdog role
will be enhanced to ensure that what is entitled to citizens is
actually delivered in its right quality and quantity.
FOR GOD AND MY COUNTRY
37
We applaud
government
provision of an
additional UGX
450bn for the
enhancement of
Teachers’ and other
Public Servants’
salaries in the FY
2014/15.

3838
Adukia, A., 2013. Sanitation and Education, Job Market Paper, Harvard
University. Available at http://scholar.harvard.edu/files/adukia/files/adukia_
sanitation_and_education.pdf
Ministry of Education and Sport, Uganda, 2013. Education and Sports Sector
Review, Field Monitoring Report
Ministry of Education and Sports, Education Statistical Abstract 2011
Ministry of Finance, Planning and Economic Development
Ministry of Finance, Planning and Economic Development, Annual Budget
Performance Report FY 2007/08
National Budget Framework Paper FY 2014/15
Paul, P.K., Mondal N. K., 2012. Impact of Mid-day Meal Programme on
Academic Performance of Students: Evidence from few Upper Primary
Schools of Burdwan District in West Bengal. IJRSS Volume 2, Issue 3 ISSN:
2249-2496
Public Investment Plan FY 2013/14 – 2015/16
Uganda Bureau of Statistics, 2013. Uganda National Panel Survey
2011/2012 (Wave III), Report on Key Findings.
Uganda Road Fund Annual Reports 2009/10 – 2011/12
United Nations Educational, Scientific and Cultural Organisation (UNESCO),
2011. Financing Education in Sub-Saharan Africa: Meeting the Challenges of
Expansion, Equity and Quality. UNESCO-UIS 2011, Ref: UIS/AP/11-01, ISBN:
978-92-9189-079-2.
Wirak, A., Heen, B., Moen, E., Vusia S., 2003. Business, Technical and
Vocational Education and Training (BTVET): for Employment and Private
Sector Development in Uganda, Report 2003-1
World Bank-International Monetary Fund 2003, Public Expenditure
Management, Country Assessment and Action Plan (AAP) for
HIPCs. Available at http://www1.worldbank.org/publicsector/pe/
FinalHIPCAAPGuidance2003-04.pdf
REFERENCES

39
Attendance list
No Names Contact Email
1. Kwesiga steven PLATINUM CREDIT 0781482381 Stev.kwesiga@gmail.com
2. Nyafwono Jean MUBS 0784997931 Nyafwonojean2013
3. Proscovia Nankya SODI 0772484157 nankyaproscovia@yahoo.com
4. Simon Osborne NDI 0752107076 sosborn@ndi.org
5. Mbowa Nathan Digida FM 0776216131 Mbowanathan@yahoo,com
6. Atusingwize Jovan PEARL FM 0705118170
7. Moses Ocom SK Mugisha Associates 0752607110 Moses.ocom@gmail.com
8. Margret Happy ICWEA 0772695133 hmargaret@icwea.org
9. Akakisima JV Lantern Consult 0701640639
10. Kayimbye Janie Joyce fertility Support Center Uganda 0779690713 Joycefertility@hotmail.com
11. Isaac Semagude Legal Brains Trust 0704261501 legalbrainstrust@gmail.com
12. Ssebwufu Edward AFIRD (Farmer) 0705458363 essebwufu@gmail.com
13. Monica Akidi Gorta (Farmer) 0775871975 monicaakidi@gmail.com
14. Tumwesigire Samuel World Voices Uganda 0782488901 Tumwesam@yahoo.com
15. Ahumuza Edwin Center for Governance 0706749163 eahumuza@cev.go.org
16. Andrew T Bagoole DIAKONIA SWEDEN 0414533820 Andrew.bogoole2diakonia.se
17. Achola Rosario Radio One 0712834711
18. Iguma Gabriel WIZARTS Media 0782600607 Gabriel@wizartsmedia.com
19. Aketch Rebeca MUBS 0703194443 aketchbecky@gmail.com
20. Edris Lukwago STAR TV 0704776562 edrisluk@gmail.com
21. Kasule Mark TOP TV 0775027495 kasulejackson@yahoo.com
22. John Kato Spirit FM 0703790712 katojohnkalyango@yahoo.com
23. Kiggundu Nicholas MUK 0712307733
24. Ddungu Davis CBS FM 0702175038
25. Twaka Ramazan NYC 0704440077 tramazan@yahoo.com
26 Nyakira Maliki CSBAG 0705558808 Mnykiira2csbag.org
26. Mbabazi Betty Parliament 0787809278 mbabazi@parliament.go.ug
27. Wangolo Jacob Parliament 0772952851 jwagolo@parliament.go.ug
28. Kasozi Patricia PA Parliament 0778078470 Kasozi.pa@yahoo.comtricia
29. Milo Mohamed NAADS 0774606256 Muloni62@gmail.com
30. Sheila Innocent CSBAG 0702575450 sinnocent@csbag.org
31. Diana Kagere CEDOVIP 0702376257 Dianahkagere2cedovip.org
32. Orau Micheal PELUM Uganda 0773261504 michealerau@pelumugands.org
33. Kashaija Dorothy Parliament –MP 0772459896 dshaija@parliament.go.ug
34. Ogwang A. Ben NURA 0752885757
35. Kalule Charles MUBS 0772031884 Charles@yahooo.com
36. Imagara Elizabeth MoLG/PPA 0700810524 imagaraelizabeth@gmail.com
37. Emmy Mutijima BAHAI FAITH 0755953955 Bahai.oea@gmail.com
CIVIL SOCIETY PRE-BUDGET DIALOGUE ON THE NATIONAL BUDGET FY 2014/15 HELD ON 15TH
APRIL 2014

Every Shilling Counts: Citizens' Perspectives on the National Budget Frame work Paper FY2014/15

Every Shilling Counts: Citizens' Perspectives on the National Budget Frame work Paper FY2014/15

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