How Financial Year 2024/25 UGX 72 Trillion Budget Will Be Funded

The 2024/25 financial year budget of UGX 72.1 trillion provides a totally challenging role for the Uganda Revenue Authority (URA) to raise the local revenue while all eyes will be on the Ministries, Departments and Agencies (MDAs) to implement the planned projects.

While delivering the budget speech at the Kololo Independence Grounds on Thursday, Finance Minister, Matia Kasaija made a clarion call to Ugandans to pay their taxes. This notwithstanding the tax measures the Minister laid down after being approved by Parliament with some rise on the Excise duty for some commodities that do affect a common Ugandan.

Out of the UGX 72.1 trillion, the tax body is expected to collect UGX 32 trillion. Out of this target, UGX 29.366 trillion is expected from domestic revenue while UGX 2.616 trillion is expected to be collected by MDAs through Non-Tax Revenue (NTR).

The rest of the funding for the budget will be UGX 12.022 trillion from domestic refinancing of maturing domestic debt; UGX 9.583 trillion from project support (external borrowing); UGX 8.968 trillion from domestic borrowing; UGX 7.779 trillion from treasury bonds for settling Government outstanding obligations in the central bank; UGX 1.394 trillion from budget support; UGX 293.9 billion worth of local Government revenue; and UGX 115.4 billion out of petroleum fund drawdown.

To Kasaija, meeting the target for the domestic revenue needs patriotic efforts of Ugandans by paying the taxes levied for them. The Minister, whose docket is responsible for borrowing, told the nation that the rhythm has to be changed to make the economy more self-sustaining.

“Madam Speaker, I call upon all of you colleagues and fellow Ugandans to render URA and other revenue-collecting institutions the necessary support to mobilize the revenue required to meet the targets for FY2024/25. We must raise more revenue and reduce reliance on borrowing and external grants. Those of us who go to borrow, they take us as if we are children, they look at you; go today, come tomorrow, no. We should make a decision so that we can at least get a reasonable percentage”  Kasaija said.

Kasaija’s call comes at a time when public debt continues to soar although the Government insists that this is still sustainable.  Uganda’s public debt, according to the Minister, is projected to stand at UGX 97.6 trillion by June 30, 2024 hence representing a 47.9 percent debt to GDP ratio.

Budget priorities

The Finance Minister told the country that the budget for FY 2024/25 will be implemented under seven priorities with UGX 10.204 trillion going to education, health, water, sanitation and hygiene while UGX 9.107 trillion will go to peace and security program.

The integrated transport and infrastructure program has been allocated UGX 4.989 trillion to cater for the maintenance of all roads, construction of a few strategic roads, as well as rehabilitation of the Meter Gauge Railway and construction of the Standard Gauge Railway.  With the Government looking to uplift the welfare of the people, UGX 2.641 trillion will be spent on wealth creation initiatives including Parish Development Model (PDM), Emyooga, Agriculture Credit Facility, Youth skilling, commercial agriculture and value addition, among others.

To sum-up the development expenditure in the next financial year, other priorities are UGX 982.6 billion for electricity transmission, distribution and utilization of existing energy stock; UGX 146.1 billion for contingency fund for response to disasters; and, UGX 31.1 billion to meet Uganda’s international commitments for regional and global partnerships.

Key sector allocations

The budget which was dedicated to the different categories of people including the elderly, the youth, women and men, was packaged to deliver services and development programs in the four key sectors of;  Agro-Industrialisation; Tourism Development;  Mineral Development, including oil & gas; and, Science Technology and Innovation (STI), including ICT.

The STI and ICT sector will be supported with UGX 246 billion to continue its development and digital transformation. According to the Finance Minister, this will go to the; expansion of internet connectivity and digital infrastructure across the country; continuing the rollout of digital services across Government to improve efficiency of service delivery, transparency and accountability; digital skilling to increase adoption of the digital services; and cyber security, data protection and privacy.

For the Energy and Mineral development sector, UGX 920.8 billion has been provided for oil and gas ventures in construction of the East African Crude Oil Pipeline hub in Tanga, Tanzania; continued construction of the pipeline; procurement and dissemination of the 57,000 Liquefied Petroleum Gas; and, establishment of the Petroleum Geoscience Laboratory. On the energy side, the Government will spend UGX 982.5 billion on; increasing access to electricity through grid expansion and connectivity projects; and, more investment in the construction of transmission and distribution networks targeting load centres to promote value addition.

The budget speech also noted the rise in the number of foreign tourists hence a need to develop the tourism sector to become more attractive. The official figures indicate that Uganda earned $ 1.03 billion from tourism receipts in 2023 calendar year. Therefore, next year, the Government will spend UGX 289.6 billion on supporting international and domestic marketing and promotion activities; modernising the tourism products to make them competitive; continue with the grading, supervision and classification of tourism facilities to enhance the quality of services and ensure adherence to the required global standards;  and, complete the upgrade of the Uganda Hotel and Tourism Training Institute infrastructure in an effort to make it an International Centre of Excellence for training and skills development in tourism and hospitality; among others.

Competitive production

While commenting on the budget speech, President Yoweri Museveni made a case for the economic growth projection saying that there is a need for the Ugandan products to be competitive and of superior quality in order to attract local and international market.

Museveni who during the State of the Nation Address (SONA) on June 6 rallied every adult Uganda to produce a good or a service, revealed that the Government is playing its part to ensure that the country is on course with industrialisation.

“In order for the economy to grow, we need to be competitive in the products we produce. Our products and services must be cheaper and of better quality, than products from other countries. In order to achieve that, we need affordable electricity which is already being worked on. We need low-cost money for the wealth creators, which is already available in the forms of PDM, Emyooga and UDB loans. Labour is still not expensive,” said Museveni.

The President re-echoed his message on a need to reduce the cost of transport by reactivating railway and water transport for cargo. He underscored the recent completion of repairs on the Malaba-Kampala and Tororo-Gulu-Pakwach meter gauge railway lines.

“We are going to start building the SGR from Malaba to Kampala and Kampala to Mpondwe. Later, we are going to expand the SGR to Gulu–Nimule. The railway will transform our capacity to create wealth. It will also save the roads from the destruction by the heavy trucks, cause less pollution and consume less fuel,” the President added.

Museveni also explained how Commercial Agriculture; Artisanship and Manufacturing; Services; and, Information and Communications Technology (ICT) are going to grow the economy if Ugandans embrace and utilise them well.

Under these sectors, the President revealed that there are already 922,998 people employed in manufacturing and 5,076,787 people employed in services.

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