State Finance Minister Clarifies Delay in Funding Key Sectors
The government has shed light on the delay in disbursing funds to crucial sectors, notably infrastructure, attributing it to ongoing commitments related to debt servicing. This revelation follows a parliamentary session during which Bukanga North MP Nathan Byanyima (NRM) accused the government of underfunding critical sectors of the economy, raising concerns about the much-awaited road grant that has yet to reach districts.
Byanyima highlighted that the anticipated one-billion-shilling road grant, earmarked for each district at the start of this fiscal year, has not yet been deposited into district accounts. This delay in funds has raised significant challenges in terms of service delivery.
He remarked, “I can assure you that the releases are not there. People all over ministries are crying. As people who want to be informed, I can tell you. Like the roads, people are relying on the one billion shillings, but the usual money that we used to work with in districts is no longer going there. The list of roads to be done is extensive. People are lamenting over projects in their constituencies. How will these Members of Parliament return if there’s nothing on the ground?”
In response, Minister Henry Musasizi cited multiple factors contributing to this issue, with debt servicing taking the forefront. He explained that in the first quarter, no funds were released for development, and less than 18% was allocated for recurrent expenditures. This shortfall in disbursements occurred because a significant portion of the budget was directed toward servicing both principal and interest on the national debt. In the second quarter, they managed to allocate the previous quarter’s balance and fully release the second quarter’s allocation. Under the development category, they reached up to 50%. Currently, they are actively seeking ways to secure the necessary funds to fully finance these allocations.
Official statistics indicate that the country’s total public debt at the end of the last fiscal year amounted to $23.7 billion, equivalent to 86.6 trillion shillings. Of this, 60.2% was attributed to external debt, amounting to $14.2 billion (52.2 trillion shillings), while the remaining 39.8% constituted domestic debt, amounting to $9.4 billion (34.6 trillion shillings).
Regarding the one-billion-shilling road grant, Musasizi clarified that it was intended to complement previous funding for districts under the Uganda Road Fund (URF). However, the situation was complicated by a reduction in URF’s budget during the appropriation process.
Musasizi added, “This one billion shillings was meant to be an additional allocation on top of what the road fund had previously provided to these districts. Simultaneously, during the appropriation process, this Parliament subtracted 60 billion shillings from the road fund’s budget, which has impacted disbursements to the Uganda Road Fund. I earnestly seek your support, members, in the future when I present my proposals.”
