Uganda’s budget absorption rate, a measure of spent funds against those released by the government, was 99 per cent at the close of the past financial year, with Ush5.11 trillion ($2.21 billion) used out of a total allocation of Ush5.17 trillion ($2.24 billion).

According to the Government Annual Performance Report FY 2009/10 — December 2010, compared with the mid-year point in December 2009 when the absorption rate was as low as 82 per cent, dropping still further to 79 per cent by March 2010, budget performance in Uganda seems to have picked up momentum.

With spending on arrears dropping to 6.5 per cent of total expenditure, well below the target of 7.8 per cent and the Auditor General registering 100 per cent achievement for clean audits of central and local government, FY2009/10 would seem to have been an exceptional financial year.

Unfortunately, on closer inspection, the picture is less rosy.

The target of clean audits may have been met but at 40 per cent for central government and 19 per cent for local government, the bar seems to have been set rather low.

A detailed analysis of spending activity reveals a lack of budget discipline across all sectors, with demands for additional funds above original allocations resulting in budget discrepancies and raising suspicions over the veracity and value of expenditures.

Just a month before the end of the fiscal year in June, about Ush400 billion ($173.16 million) was lying unused in the government coffers.

Ush138.8 billion ($60 million) of this amount belonged to the Uganda National Roads Authority, which had averaged monthly spending at Ushs19 billion ($8.2 million) for the preceding months.

Following the strict discipline Syda Bbumba has tried to enforce since she took over the Ministry of Finance, Planning and Economic Development, the roads agency rushed through spending of Ush132.5 billion ($57.3 million) in June, seven times its monthly average of the preceding 11 months.

Other poor performers in this regard were the Ministry of Energy and Mineral Development, the Education Ministry and the Ministry of Works and Transport, which had not spent Ush56.5 billion ($24.4 million), Ush19.3 billion ($8.3 million) and Ush21.8 billion ($9.4 million) respectively by May 2010.

In June, the energy sector spent a striking Ush130 billion ($56.27 million) — four times higher than its monthly average for the rest of the financial year — on the energy fund, power sector development operation and support to the thermal power generation plant, three projects whose merit is now in question.

In regard to surplus spending, the worst performers were the public administration sector, which overspent its Ush217 billion ($93.9 million) allotment by Ush140 billion ($60.6 million) reflecting a 64 per cent variance; public sector management, which received Ush144 billion ($62.3 million) more than the Ush472.675 billion ($204.6 million) on budget; and the justice, law and order sector, which exceeded its budget by 28 per cent with a supplement of Ush97 billion ($41.9 million).

In public sector management, the releases in excess of the appropriated budget were a result of in-year supplementary expenditures to take care of emergencies such as the Bududa landslide and civil service pensions, which cost Ush37.04 billion ($16.03 million) and Ush81 billion ($35.06 million) respectively.

Some Ush60 billion ($25.9 million) of the public administration supplemental went to the electoral commission for the management of next year’s general election.

The Ministry of Finance had decided to finance the coming vote like a project, with funds provided on an as-needed basis.

For the three years, up until FY 2009/10, the strategy held, but in that year, the creation of new districts, voter education and increased numbers of candidates played havoc with the ministry’s plans.

The commission had changed the target number of registered voters from 300,000 to 3,500,000 in consideration for Ugandans who had just turned 18 but, given that the national demographic figures are well documented in the population statistics, this figure should have been anticipated, the failure to do so reflecting poor planning on the part of the electoral body.

By the end of the financial year, Ush6 billion ($2.59 million) of the entire Ush100.8 billion ($43.6 million) stipend to the electoral commission had not been used, only 7 out the anticipated 23 new districts had become operational and the body had failed to organise youth votes for the newly created local councils because there were no enabling laws.

Efforts to get an accounting of the rest of the supplemental from the electoral commission were fruitless.

The total State House budget for 2009/10 was Ush76.429 billion ($33.08 million); it, however, received Ush141.679 billion ($61.3 million).

Of the Ush65.25 billion ($28.2 million) extra funding, Ush325 million ($140,000) went to salaries, Ush32.519 billion ($14.07 million) to recurrent expenditures and Ush32.406 billion ($14.02 million) complemented the State House developmental budget.

Agriculture supplementary funding amounted to Ush31 billion ($13.42 million) of which Ush10 billion ($4.32 million) was to be spent by National Agricultural Advisory Service to produce good quality planting and stocking materials and the rest went to the National Agricultural Research Organisation (NARO) to promote agricultural research capacity.

NARO managed to carry out 61 research studies against a target of 48 and produced 18 of 20 prototypes of crop varieties.

These achievements were however not commensurate to a budget expenditure totalling Ush20 billion ($8.65 million), says the report.

All in all, the total supplementary budget for 2009/10 was Ush559.4 billion ($242.16 million) and of this, only Ush147.3 billion ($63.76 million) was spent on emergencies and Ush37.3 billion ($16.14 million) was used to cater for consumptive items like allowances, travel, workshops, seminars and fuel and vehicle maintenance.

The rest, according to Mrs Bbumba, was a “consequence of poor planning and budgeting.”

The finance minister registered concern that government agencies were deliberately under-budgeting for recurrent and essential activities and that aggregate expenditure trends in the previous fiscal year illustrated high levels of consumptive expenditures compared with levels of service delivery spending.

A case in point is the Ush624 billion ($270.12 million) spent on common non-wage items in 2009/10 compared with the Ush500 billion ($216.45 million) to be spent on core front line services this year.

It appears that consumptive expenditure is crowding out essentials at service delivery points across the country, with government agencies spending faster on such items as fuel and vehicle maintenance, allowances and travel than they do on capital projects.

One reason for this is the protracted procurement process and delays resulting from administrative reviews requested by unsuccessful bidders.

The finance minister notes that infrastructure-oriented sectors demonstrated the lowest absorptive capacity for investment expenditure with energy at 5 per cent, works and transport at 15 per cent and ICT at zero per cent.

Even after a budget cut of 23 per cent, the Information and Communications Technology Ministry still failed to spend Ush8.2 billion ($3.5 million) for the transmission backbone infrastructure.

The ministry nonetheless claims to have met their annual target of connecting 20 districts to the backbone, even after spending only Ush2.5 billion ($1.08 million), which was 20 per cent of the budget.

This same project lacked adequate supervision with Huawei Technologies, the main contractor, continuing with work even after parliament had suspended all activity.