Gov’t Releases Shs4.8 Trillion For First Quarter of FY 2023/24 With Tough Orders

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Uganda’s Ministry of Finance Planning and Economic Development on July.18 released funds for the first quarter of FY2023/24 totalling Shs 4.8 trillion to meet the government expenditures. This represents 9% of the Shs 52.7 trillion discretionary budget.

Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury (PSST) in the finance ministry said the first quarter release had been informed by the need to keep expenditures within the available resources to ensure fiscal discipline, controlled borrowing, and macroeconomic stability.

He said out of the Shs 4.8 trillion, the wage bill is projected to consume Shs1.8tn or 25% of the government’s entire wage budget which includes a 50% release for missions abroad and hedging them against what he called poundage.

Shs Shs169bn will cater for the payment of pension for the retired civil servants and further Shs147bn for gratuity payments.

In the education sector, the capitation grants for schools have been fully provided to provide for the third term of the school year, according to Ggoobi.

In addition, Shs91bn has been provided to universities and other tertiary institutions in line with semester requirements, with Makerere University getting the largest share of Shs31bn, Kyambogo Shs17bn and MUBS Shs9bn. Uganda Management Institute has been given Shs4bn, Mbarara University of Science and Technology Shs4bn and Gulu University Shs4bn among others.

Slightly over Shs140bn has been provided to the National Medical Stores to purchase medicines and drugs, which is 25% of the annual budget.

The Ministry of Works and Transport and the Uganda National Roads Authority (UNRA) have got Shs50bn to pay for certificates for the ongoing projects.

Under local governments, a total of Shs44bn has been provided translating into Shs250 million per local government to do road maintenance.

Meanwhile, a total of Shs111bn has been provided to cater for government arrears under institutions of which Shs10bn is for salary arrears and Shs101 is for pension and gratuity arrears.

Tough orders

However, Ggoobi ordered all accounting officers to pay wages, salaries, pensions, and gratuities by the 28th of every month. He instructed the display of all the payrolls for salaries and monthly pensions on government institutions’ notice boards.

He said all account officers must prioritise payment of service providers on time and clearance of domestic arrears to avoid further accumulation of arrears and penalties.

Ggoobi also instructed accounting officers not to make any new recruitment of workers unless they are cleared by the Ministry of public service. Relatedly, every promotion and redeployment of staff must be backed up by wage provisions.

Ggoobi said the finance ministry will also not tolerate supplementary expenditures that are not for security or industrial policy purposes.

He said the ministry remains resolute to release funds before the 10th day of the first month of the quarter to ensure the timely execution of government programmes.

Economic experts have welcomed the government’s stance on fiscal discipline and timely release of funds saying it would boost private sector growth, aggregate demand, and overall growth of the economy.

State of the economy

Ggoobi also gave an update on the state of the economy that warranted the release of the quarter-one cash. He said the economy was improving citing headline inflation that was reported at 4.9% at the end of June, down from 10.7% in October last year.

He said the exchange rate has remained stable trading at Shs 3,700 against the popular USD currency. Private sector credit also grew by 0.32% with key sectors of manufacturing, trade, personal and household loans, trade and building and construction, and real estate, all registering increases in credit uptake.

He said the government remains optimistic that the economy is expected to grow by 6% this financial year, higher than the 5.5% registered in FY2022/2023.

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