Civil Society Statement on the Budget Strategy and Priorities for FY 2014/15

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CIVIL SOCIETY BUDGET ADVOCACY GROUP

Civil Society Statement on the Budget Strategy and Priorities for FY 2014/15

Delivered at the National Budget Conference for the FY 2014/15 

Thursday 16th January 2014 at Serena International Conference Centre, Kampala

On behalf of Civil Society Organisations working under the Civil Society Budget Advocacy Group (CSBAG)[1], we would like to appreciate the invitation extended to us to participate in this year’s Budget Conference and especially for the opportunity to make a statement on the Budget Strategy for FY 2014/15.

Budget should be about Citizen Economic Opportunities

As civil society we want to underscore that any country’s investments in development that are expressed through annual budgets should be about citizen’s wellbeing and aspirations. Development should be more than production of goods and services or the rise and fall of national incomes and growth in GDP.  It should ultimately be about how citizen associate to take advantage of economic opportunities, organize to overcome all fiscal bottlenecks and work achieve their life goals in a conducive economic environment.

The focus

We therefore want to reiterate that the annual budget should focus on investing in expanding human choices and capabilities and create institutional efficiency.  Indeed the mark of success of all budget instruments should be about economic growth but also the qualitative change in lives of people.  These we believe are fundamentals that we all share and should structure our dialogue around.

Links with the NDP

Honourable Minister, first, we would like to start by commending the Government for the efforts made in conducting the National Development Plan Midterm Review.  This review has raised critical development challenges that require attention of all stakeholders. We are pleased to say that the exercise brought forth findings and recommendations which, upon joint consideration and implementation, can make significant strides towards Vision 2040.

Positive Development

We would also like to commend the government for several achievements in the past year such as the ongoing financial management reforms that were introduced; the application of a Treasury Single Account (TSA), revision of the Public Finance laws, improvement in the disclosure funds releases, increased access to budget information through the website – http://www.budget.go.ug/ among others.  We believe this will go a long way in addressing the financial management challenges the country has faced in the recent years.

On Corruption

We welcome Government for continuing to prioritize the elimination of corrupt practices of public officials including outright theft of public funds as mentioned by the Prime Minister.  While this sounds good, we call on government to handle the corruption cases before court quickly and recover stolen money.  These additional actions will go a long way in dispelling the impression, as mentioned by the Human Rights Watch Report released in 2013, that Uganda’s failure to hold the highest members of its government accountable for large scale graft represents a lack of political will and has crippled Uganda’s anti-corruption institutions and thus undermines the efforts towards fighting corruption.  We are happy that now government officials are starting to appreciate the efforts of the Black Monday Anti-corruption campaign and this year we are adding an integrity campaign where we shall reach all parts of Uganda to identify public officials who are working with integrity and affirm, celebrate and recognize them.  As a country we must change the image of Uganda from being known for its corruption scandals to being known for its beauty and the integrity action of its public officials.

On agriculture

Ladies and Gentlemen, the under-investment in agriculture is evidenced by stagnant budget allocation to the agricultural sector as shown in the MTEF. Despite our persistent outcry and public pronouncements – actual allocation data shows that Government has not prioritized agriculture to the extent that agriculture will receive a meagre 3.1% of the national budget in FY 2014/15.

Domestic Revenue

We also recognize with caution, government’s efforts to increase domestic revenue in order to fully fund the budget. However, we are concerned that low domestic revenues coupled with poor tax administration continue to act as obstacles on the path towards revenue self-sufficiency. The current tax system has elements of regressiveness as it puts more emphasis on indirect taxes rather than direct taxes, undermining citizens’ ownership of the budget, and also overburdening the poor. We thus, propose that any tax reforms need to contain specific proposals on how to make the tax system more progressive in order to make revenue mobilisation more equitable and redistributive, as well as it will increase citizens’ ownership of the budget as the primary mechanisms for budget discipline and budget accountability.

Integrating the Informal Sector

In order to improve on revenue mobilisation, Government should integrate the informal sector into the formal sector through improving the procedures of registering business; address the inefficiencies in tax administration such as tax avoidance and evasion which lead to capital flight and illicit financial flows out of the country and review all tax incentives and exemptions so as to eliminate the unproductive ones.  We therefore welcome the National ID project and hope that the history of corruption that led to its delays initially will not be repeated.

Climate Change

Ladies and gentlemen the issue of climate change threatens to undo decades of development efforts in a short time as has been witnessed in some regions of the country. Climate-related disasters-droughts, floods, landslides, and wind and hail storms-are estimated to destroy 800,000 hectares of crops annually for economic losses of $75 million (USh173 billion). Additionally, economic losses resulting from destruction of civil works, transport accidents, epidemic outbreaks, and climate-related conflict are estimated to cost well over $31 million (USh72 billion) annually.  We request government to prioritize the climate change implementation strategy and ensure that all priority national investments, the proposed timeline, funding requirements are met.

Conclusion

Rt. Hon. Prime Minister, it is important to underscore that a national budget is both a technical and political instrument.  Incentives that accompany budgetary decisions of government are not only located in the technical efficiency of documents received in conferences like this, but also in the demand side pull factors that compel a government to be more efficient and responsive in the budget process.  This therefore means that effective participation of citizens, local government and Parliaments in the budget process would be advantageous. We once again thank the Ministry of Finance, Planning and Economic Development for organising this budget consultation; this provides an opportunity for us to provide input into the budget.


[1] The Civil Society Budget Advocacy Group (CS BAG) is a coalition formed in 2004 to bring together CSOs at national and district levels to Influence Government decisions on resource mobilization and utilization for equitable and sustainable development.

 

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