The Ministry of Finance, Planning and Economic Development has said it will stop incremental budgeting as a way of restoring fiscal discipline and reduce borrowing.
Speaking at the 5th Annual NTV-MoFPED Economic Summit held at Kampala Serena Conference Centre on Thursday, the Permanent Secretary, Mr Ramathan Ggoobi, said the upcoming budgets will be more redistributive and less accommodative.
“First, as a country we are going to learn to live within our means. We’re going to stop budgeting incrementally. Winners are going to gain by taking from losers rather than claiming incremental resources. We are going to make the budget redistributive. We must promise in the plans what can pay for in the budget,” Mr Ggoobi said.
“We are going to make the budget less accommodative. We are going to restore fiscal discipline. The tendency to presume that spending must be higher next year than this must stop,” he added.
This comes as experts raise concern over Uganda’s continued supplementary budget requests, some of which come two months after the passing of the National Budget, amid the growing national debt.
But on Thursday, Mr Ggoobi said that supplementary budgets are going to be only for emergencies and unforeseen expenditures.
“Like elsewhere, we are facing revenue shortfalls and tightening room for borrowing. Therefore, the most pragmatic way out is to increase allocative and technical efficiency. This calls for strict adherence to agreed priorities by both the bureaucrats in MDAs and politicians,” he said.
To finance the budget, Mr Ggoobi said government willimplement practical actions under the Domestic Revenue Mobilization Strategy (DRMS) to generate more revenue and reduce the share of the budget that is financed through borrowing.
He added that government will also enforce compliance instead of introducing new taxes.
“My Minister will announce the actual measures that we are going to undertake to increase revenue without increasing the tax burden on typical groups of taxpayers,” he said.
The PS also said they plan to enhance management of public debt in line with the new Charter for Fiscal Responsibility to ensure that the national debt stays sustainable.
“By the way Uganda’s debt-to-GDP ratio is one of the lowest in the region: Kenya = 72%; Rwanda = 66%; Burundi = 76%; Ethiopia = 56%; TZ = 38%. We are going to borrow largely concessionary or longer-dated commercial to reduce refinancing risk,” he said.
He added that they will review projects to identify poorly performing ones to release resources and/or free our fiscal space.
“We are currently focused on preparing for the post-pandemic economy by reversing the pandemic-induced setback to human capital development, facilitating new growth opportunities, digitalization, and ensuring sustainable public finances. The past two years may have been a pain to each of but the future looks bright. Support our reforms to create an economy that works for everyone,” he explained.