Stick to The Budget, IMF Tells Uganda.

1542 Views Kampala, Uganda

In short
Ana Lucia Coronel, the IMF Uganda Mission Chief says that government needs to concentrate on the real needs of the country, like infrastructural development and the National ID project.

In its first review of Uganda’s fiscal policy using the Policy Support Instrument, the International Monetary Fund-IMF says that government needs to resist spending pressures and stick to the approved budget.

This comes at a time when government is continuously put under pressure from public servants who plead for pay increments. These include among others teachers who recently went on strike demanding for a 20 percent salary increment. This increment had not been provided for in the current 2013/14 budget estimates.

Ana Lucia Coronel, the IMF Uganda Mission Chief says that government needs to concentrate on the real needs of the country, like infrastructural development and the National ID project.

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She however hastens to point out that if there were salaries that had been kept for a long time then they should be accommodated in the budget.

Additionally, the IMF appeared rather disappointed that the National ID Project has been delayed despite its importance to the country.

Coronel emphasized that this particular project had been delayed “for too long” yet non-essential expenditure tended to make into the budget, especially with supplementary budgets almost every financial year.

The IMF has been one of the fiercest critics of supplementary budgets and Coronel did emphasize this stance.

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In the IMF’s review, it was noted that Uganda’s economic outlook was favorable as inflation abates slowly and growth recovers, then Ugandans would get to borrow more from banks.

Furthermore, investment by government in infrastructure projects like hydro power dams and roads would address the infrastructure needs of the country and also stimulate employment.

In the 2013/14 budget, Finance minister Maria Kiwanuka allocated UGX 1.7trillion and UGX 2.4trillion to the energy and roads respectively. These projects, according to the IMF could have a 1 to 2percent impact on economic growth during the construction phase and a 0.2 to 0.3percent impact at the end of construction.

Coronel revealed that in various meeting with the ministry of finance, she pointed out the needs to increase domestic revenues by revising the tax policy towards the new realities facing the economy. Another area of concern was also the arrears the government continued to accrue.

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Going forward, the government was hailed for improving financial management practices like implementation of the treasury single account and called for the swift passing of the Public Finance Bill tabled earlier this year.