The Ugandan Parliament has approved UGX 132.634 billion for the Uganda National Oil Company (UNOC) to purchase shares in the East African Crude Oil Pipeline (EACOP). This amount is part of a larger supplementary budget of UGX 288 billion for the financial year 2023/24.
The approval came after a motion was presented by Finance State Minister Henry Musasizi on Thursday, May 16, 2024. Musasizi asked Parliament to approve Supplementary Schedule No.3 for the current financial year.
Minister Musasizi explained that the Ministry of Finance received urgent budget requests for the 2023/24 financial year, prompting the preparation of a supplementary schedule totaling UGX 288.644 billion. He mentioned that the Cabinet had approved this request during their meeting on Monday, May 13, 2024.
The minister further clarified that the UGX 132.634 billion allocated for EACOP shares is intended to meet the cash call due to delays in financing by the project’s financiers. The funds must be available before July 2024 to fulfill the financial commitments.
Musasizi indicated that the money would be sourced from the Petroleum Fund at the Bank of Uganda. This fund is designated for supporting government development activities and infrastructure projects.
Hoima Stadium Funding
Additionally, UGX 152 billion of the approved funds will be used for constructing the Hoima City Stadium. This stadium is being built by the National Council of Sports in preparation for the 2027 African Cup of Nations. The allocated money represents a 30% advance payment to the Turkish contractor, SUUMA, to begin construction and ensure completion by December 31, 2025.
Other Allocations
For the Embassy of Geneva, an extra UGX 1.490 billion has been allocated to cover post Non-Aligned Movement (NAM) Summit activities, including rent, salaries, and utilities. These funds were identified from savings found during an audit of the wage bill.
The Uganda Blood Transfusion Services will receive UGX 2.5 billion to address a budget shortfall for blood collection, processing, and distribution for the final quarter of the financial year. This will also be funded by savings from the national wage bill audit.
Opposition to Supplementary Budget
Some Members of Parliament opposed the supplementary expenditure. Nandala Mafabi (Budadiri West County, FDC) argued that a resolution from Parliament is necessary before any withdrawal from the Petroleum Fund can be made to transfer money to the Consolidated Fund.
Attorney General Kiryowa Kiwanuka stated that Parliament’s authorization is required for any withdrawals from the Petroleum Fund. He emphasized that unforeseen circumstances, such as funding for EACOP and the Hoima City Stadium, justify these allocations. He added that contracts for building the stadium could not proceed without confirmed funding from the education ministry.
Wilfred Niwagaba (Ndorwa County East, Independent), the shadow attorney general, noted that Parliament’s approval of the motion would suffice for authorizing the withdrawal of funds from the Consolidated Fund.
Ibrahim Ssemujju (Kira Municipality, FDC) expressed concerns that continually approving supplementary budgets without corresponding increases in revenue from taxes or borrowing leads to financial and budgetary indiscipline.
