Rwanda tension cited in supplementary budget, but why does govt want Shs1.5 trillion?
Kampala, Uganda | HAGGAI MATSIKO | The government intends to push US$320 million (Approx.Shs1.2 trillion) worth of supplementary budgets through parliament in the next two months, The Independent can exclusively report. The money must be passed urgently before the current FY2018/19 closes in June.
Source familiar with the details of the government move say the supplementary budgets were expected as has become the norm before an election year. However, the size and components of the supplementary budgets are raising eyebrows.
The anticipated $320 million is about 5% of the Shs32.7 trillion total resource envelope for FY2018/19. It is bigger than the budgets of most ministries.
Part of this money, The Independent understands, is $100 million (Approx.Shs370 billion) extra that President Yoweri Museveni has directed the Finance Ministry to allocate towards the defence budget.
This means that instead of the usual supplementary budgets that many see as part of Museveni’s pre-election planning which includes building a financial war chest for the 2021 elections, the portion for Defence could be part of preparations in case of a war with Rwanda.
The directive to increase defence spending followed two meetings this month; one with security chiefs and another with officials from the Finance Ministry, The Independent understands.
Museveni first met the security chiefs and discussed “tensions with Rwanda”, said a source familiar with the details of the meeting on conditions of anonymity because of the sensitivity of the matter.
After this meeting, the source added, Museveni then summoned officials from the Finance Ministry who he directed to make the allocations.
The $ 100 million is marked as classified expenditure under the defence ministry, insiders say.
Given that initially the allocation towards defence was about Shs.2.2 trillion (Approx. $600 million), the new allocation brings to about Shs 2.6 trillion, the total defence budget for the financial year ending this June. That is a one percentage point rise on Defence spending in the FY 2018/19.
Details indicate, however, the Defence is likely to get significantly bigger allocation in the next FY2019/20 budget that Finance officials are putting together. The total resource envelope for next financial year was projected to be about Shs.35 trillion (Approx.US$9.5billion).
In this budget, Defence spending was set to drop to Shs.1.9 trillion according to National Budget Framework Paper (NBFP).
Now, The Independent understands, the Finance Ministry will add another $270 million (Approx.1 trillion) to the defence budget for 2019/2020 alone. This will bring Uganda’s defence spending to close to $1 billion dollars again.
Uganda last spent $1 billion dollars on defence in 2011. That year, Uganda even surpassed regional giant Kenya’s defence spending for the first time.
Of the US$ 1.02 billion, US$270 million was spent on its usual defense budget items (food, salaries etc) and US$ 750 million on acquisition of 6 Su-30MK Russian jets.
The acquisition of the jets elevated Uganda’s air force to one of the most advanced combat aircraft squadrons in East and Central Africa, the Stockholm International Peace Research Institute (Sipri), which tracks conflicts and military spending globally, reported.
In its recent report, Trends in international arms transfers, 2011, SIPRI notes that the purchase of the fighter jets and other arms increased Uganda’s military expenditure by 300%, dwarfing Africa’s 9% and the world’s 24% expenditure on arms.
Given that this time the budget for the financial year 2019/2020 has only increased by Shs.2 trillion from the current financial year, Defence, it appears will swallow half of the national budget increment.
The Defence budget is skyrocketing at a time when allocations to other sectors are dipping.
For instance, the Health budget is reducing from Shs2.3 trillion to Shs2.2 trillion and Education is equally facing a cut from Shs2.7 trillion from shs2.6 trillion, according to details in parliament’s Budget Committee report on the NBFP.
It is also growing at a time debt is piling and the taxman is facing tough times meeting its revenue collection targets. Uganda Revenue Authority (URA) has registered over a Shs1 trillion revenue shortfall and debt now stands at Shs41.3 trillion or 41.5% of national Gross Domestic Product.
As a result, Treasury Operations, which deals with domestic debt refinancing, was allocated a total of Shs9.5 trillion. The other lion’s share Shs5.3 trillion up from Shs.4.7trillion went to the Works Ministry.