Uganda government seeks Shs79b to compensate 2,200 staff affected by merging of agencies

The Ministry of Public Service is seeking for Shs79.3b in its 2024/25 budget, to compensate the 2,200 staff that are set to be laid off by Government after the rationalisation and merging of several public agencies.

The money is contained in the National Budget Framework Paper (BFP) for financial year 2024/2025 amounting to Shs52.7 trillion, which was tabled in Parliament last week. According to the Public Finance Management Act, the Government should table the budget framework paper before Parliament by 31 December 2022, and by 01 February 2023, the House should have approved the budget framework paper.

Among the agencies to be merged include; Uganda National Roads Authority (UNRA), Uganda Coffee Development Authority (UCDA), National Information Technology Authority of Uganda (NITA-U), Cotton Development Authority (CDA), Dairy Development Authority and Uganda Meteorological Authority.

According to the rationalisation of government agencies (Repeals and Amendments) Bill gazetted on October 6, 2023, the Uganda National Roads Authority Act, 2006 (Act 15 of 2006) will be amended to “mainstream the functions of UNRA established under the Act into the Ministry responsible for roads.”

The Government proposal to disband and merge departments and agencies is aimed at slashing annual public administration costs which as of 2021 amounted to Shs 1.3 Trillion.

According to Public Service Minister Muruuli Mukasa, the proliferation of agencies had created mandate overlaps and jurisdictional ambiguities among the agencies.

“Additionally, the high cost of administering the agencies has drained the national treasury at the expense of effective service delivery,” said Muruuli, adding, “This has overstretched the capacity of the Government to sustain them.” Dr Gerald Karyeija, the dean of the school of management, Uganda Management Institute, supports the merging of government agencies, saying it falls under the principle of new public management, which emphasizes a lean government.

However, he insists that the restructuring should also move to Cabinet and other government departments.

“I generally consider it as a good move to reconfigure the structures of the government. It (re-organisation) should move to other administrative areas such as the cabinet and local governments. The intention (of re-organisation) should not be to save money, but improve service delivery.”

“The reason for reforms in government and the agencies should not be to save money, but to get value for money. When you retreat a state, it feels like it has been kidnapped, what the government is doing is recapture the kidnapped state, increase its control on the direction of government service delivery,” Dr Karyeija adds.

However, Mr Jude Kamuganga, a lawyer/advocate and policy associate at Envirosure Consulting, says whereas it is brainy to merge certain agencies, there is need to take caution on certain mergers, specifically those in the energy sector.

He explains that the foundation of the electricity sector reforms in Uganda was the Electricity Act, 1999, which unbundled the sector to form Uganda Electricity Distribution Company Ltd (UEDCL), Uganda Electricity Generation Company Limited (UEGL) and Uganda Electricity Transmission Limited (UETCL), under one regulator in Electricity Regulatory Authority (ERA). The vertical unbundling to separate generation, transmission and distribution segments allowed private actors under concessions, hence competition, Mr Kamuganga says.

There has been efficiency, transparency and good governance in the sector, to a large extent, which could be undone by the unbundling of these agencies.