Africa-Press – Uganda. A decline in inflationary pressures has nudged the government to relax its tight fiscal policy by raising the second quarter budget expenditure to Shs9.195 trillion, up from Shs4.8 trillion.
Mr Ramathan Ggoobi, the Finance ministry Permanent Secretary/Secretary to Treasury (PSST), said on Friday that the economy is expected to expand by 6.0 percent this Financial Year 2023/2024.
He pointed to the Composite Index of Economic Activity (CIEA), which measures the volume of overall business activities, noting that it has been on an upward trajectory since April.
“This shows that business activity is growing,” he said of the CIEA that increased to 162.63 in August.
The Purchasing Managers Index (PMI), prepared by Stanbic Bank, also improved to 52.9 in September up from 51.6 in August, to put a further spring in the economy’s collective step. This coupled with the latest consumer price index print that puts inflation at 2.7 percent after a reading of 10.7 percent in October of 2022 is, the PSST reasoned, a vote of confidence in the government’s commitment to maintain fiscal sustainability.
The government has also vowed to commence the execution of capital development expenditure, which is the basis for economic growth and ensuring sufficient funds to pay certificates on contracts. This will, Mr Ggoobi noted, avoid arrears and impairing private sector contractors.
Mr Ggoobi said Shs1.842 trillion or 25 percent of the wage budget has been provided to cater for Quarter Two.
The PSST also said the non-wage recurrent expenditure of Shs529.7 billion has been provided for the Parish Development Model (PDM). While this translates to 50 percent of the Budget, he said it will ensure all parishes are provided with Shs50 million each by half year. In addition, Shs100 billion has been released for the Emyooga programme and Shs42.5 billion for capitalisation of the Uganda Development Bank.
Elsewhere, the cumulative domestic revenue collections for this financial year stood at Shs6.3 trillion at the end of September 2023, representing a 16.5 percent year-on-year growth.
Mr Julius Mukunda, the executive director of the Civil Society Budget Advocacy Group, said Ministries, Departments and Agencies (MDAs) are still facing problems accessing released funds in a timely manner.
Dr Arthur Bainomugisha, the executive director of the Advocates Coalition for Development and Environment, noted that the rationalisation of MDAs is taking too long and yet hard evidence shows it will save Shs1 trillion.
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