Government to Borrow Shs28.8 Trillion for Revised Shs72.13 Trillion National Budget

Parliament has approved the Appropriation Bill, 2024, concluding the budget process with a revised national budget of Shs72.13 trillion for the 2024/25 fiscal year.

This significant increase from the initially proposed Shs58.34 trillion aims to address the nation’s financial and developmental needs.

The government plans to finance the budget by borrowing Shs28.768 trillion from local commercial banks, a substantial rise from the previously proposed Shs15.436 trillion. Additional funding sources include Shs9.5 trillion from project support and Shs19.8 trillion from domestic debt refinancing.

Key budget allocations include Shs3.1 trillion for external debt repayment, Shs9.5 trillion for project support, Shs12 trillion for domestic refinancing, Shs9 trillion for interest payments, Shs293.9 billion for appropriation in aid, Shs603 billion for Bank of Uganda recapitalization, Shs200 billion for domestic arrears, and Shs9.1 trillion for domestic debt repayment under Bank of Uganda’s first expenditure call.

Governance and security received Shs9.1 trillion (24.2 percent of the budget) to bolster law enforcement and national security measures. Integrated transport infrastructure and services were allocated Shs5.1 trillion, while Shs2.3 trillion was set aside for development plan implementation and Shs2 trillion for private sector development.

Investments in key sectors include Shs1.0533 trillion for sustainable energy development, Shs481.4 billion for the administration of justice, Shs978.6 billion for legislation, oversight, and representation, Shs682.6 billion for climate change and environment management, and Shs230.9 billion for digital transformation.

The budget allocates Shs1.27 trillion for the construction and upgrade of national roads and bridges, with Shs20 billion for the rehabilitation of the 72 km Kampala-Jinja Highway and Shs25.05 billion for the Busunju-Kiboga-Hoima road. Additionally, Shs592.08 billion is earmarked to address flooding, traffic congestion, poor road infrastructure, unsignalized junctions, street lighting, and storm water drainage enhancements in Kampala.

The Standard Gauge Railway (SGR) project will receive Shs2.221 trillion, including land acquisition in the Tororo-Mayuge districts and feasibility studies updates. The budget also includes Shs57.8 billion for COVID-19 response, Shs569 billion for essential medicines and health supplies, Shs29.93 billion for specialized medicines, Shs57.4 billion for the Uganda Heart Institute, Shs38.56 billion for the Uganda Cancer Institute, and Shs12.7 billion for Regional Oncology and Diagnostic Centers in Arua, Mbale, and Mbarara.

The Ministry of Defence and Veteran Affairs is allocated Shs172 billion for food, Shs230.16 billion for equipment, and Shs214.62 billion for wages and gratuity payments. Additionally, Shs30 billion has been set aside to establish Busoga and Bunyoro universities.

Human capital development emerged as a top priority, receiving Shs9.9 trillion (26.3 percent of the budget) for education, healthcare, and skills development.

Despite the extensive allocations, the budget process faced criticism for its chaotic execution. Ibrahim Ssemujju (Kira Municipality) condemned the disorganization and contradictory figures presented by the Ministry of Finance, describing the process as the most chaotic in Uganda’s history. Ssemujju questioned the varying budget figures at different stages, likening the preparation to work by juvenile commerce students.

Hon. Geofrey Ekanya (FDC, Tororo North County) defended the budget increase, citing the need for funding local councillors’ ex-gratia.

Despite the controversies, Parliament’s approval of the revised budget is aimed at addressing Uganda’s financial and developmental challenges for the upcoming fiscal year.