The Year ahead: Education, health and water to maintain giant’s share of 2023-24 Financial Year Budget

Education, health and water sectors, will have the biggest allocation from Uganda’s 2023-24 Financial Year Budget for the second consecutive year, having increased from Ugx7.5 trillion in financial year 2021/2022 to Ugx9.089 trillion in the current financial year budget of 2022/2023. Of this, Ugx495 billion was allocated for increment of salaries for medical workers and other scientists including teachers.

Government last week released the Budget Framework Paper for next financial year 2023/2024, giving Ugx9.005 trillion out of the proposed Ugx49.9 trillion National Budget to education, health and water, collectively referred to as Human Capital Development programme. This allocation, however, implies that while the programme remains the highest funded, there has been a Ugx83.94 billion reduction in allocation.

Officials explain that out of the Ugx9.005 trillion, Ugx3.96 trillion is wages, Ugx1.96 trillion is non-wage recurrent while Ugx1.005 trillion is domestic development and Ugx2.06 trillion is external financing.

In the past the National Budget has focused on infrastructure development until the National Development Plan III, in which government resolved to balance between infrastructure and human capital development to spur economic growth and development.

In 2023-24 Financial Year government will focus on sustaining economic recovery and building economic and enterprise resilience by focusing on six strategic intervention areas including support for medical schools and science-based research and development; peace and security under the Governance and Security programme (Ugx6.824 trillion); roads and railway (Maintenance of both tarmac and murram roads, development of Standard gauge  Railway- SGR and rehabilitation of the Meter Gauge Railway) under the Integrated Transport programme (Ugx4.65 trillion) among others.

Government also proposes to prioritize the full implementation of the Parish Development Model -PDM and scaling up Emyooga, oil and gas development, enhancing support to Uganda Development Bank -UDB and Uganda Development Corporation -UDC under the Private Sector Development initiative (1.798 trillion) plus irrigation particularly the small scale solar powered irrigation under Agro Industrialization Programme (1.499 trillion).

Government has also proposed to allocate Ugx1.2 trillion for electricity to cater for construction of sub-stations and transmission lines and Agago hydro power station in the medium term under the Sustainable Energy Development programme while Ugx268.4 billion is proposed for industrial parks through building infrastructure and connecting them to electricity under the Manufacturing programme.

According to the Finance Ministry, President Yoweri Museveni identified these areas as priorities, which means government will have to constrain its expenditure to fit within the existing resources for FY2023/2024.

The proposed Ugx49.98 trillion budget, up from Ugx48.13 (FY2022-23), will be financed through domestic revenue (Ugx28.83 trillion), budget support (Ugx2.491 trillion), domestic borrowing (Ugx1.585 trillion), external project support (Ugx8.04 trillion), domestic refinancing (Ugx8.798 trillion), and local revenue for local government (Ugx238.5 billion).

The government projects economic growth to average between 6 percent and 7 percent, with anticipated increase in productivity within agriculture and manufacturing sectors supported by interventions in the private sector activity, public infrastructure investments and operations in the oil and gas sector.

Parliament sectoral committees are scheduled to consider the different sector budgets in January and report to the House Budget Committee on 20th March. The Budget Committee will in turn present a report to Parliament on the estimates in the Budget Framework Paper. The Public Finance Management Act, 2015 requires Parliament to approve the budget framework paper by 1st of February.