By MARTIN LUTHER OKETCH
KAMPALA- Opposition parliamentarians have called for a special audit of the unspent balances of the national budget of the government ministries, departments and agencies that keep cropping up every year.
The MPs say Section 17(21) of the Public Finance Management Act stipulates that a vote that does not expend money that was appropriated to it for the financial year shall at the close of the financial year report the money to the Consolidated Fund.
“A special audit of the Consolidated Fund should be undertaken with the purpose of ascertaining the extent of unspent balances, how they arise, ought to be budgeted for and utilised,” the MPs stated on Friday in a response to the current National budget Framework being discussed in Parliament.
They say it is not clear how unspent balances of previous financial years ore incorporated into financing of budget of the next financial year.
The legislators add that this leads to underestimating the available resource envelope for a given financial year.
“Surprisingly, the votes with highest unspent balances are regular beneficiaries of supplementary budgets. This points to the fact that such votes did not require supplementary budgets. lt also points to inadequate scrutiny of supplementary requests by the Ministry of Finance,” they stated.
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In recent years, government has been borrowing on non-concessional basis.
The MPs said government is increasingly raising non concessional loans for projects that would not generate revenues for government within five years as required under the Public Debt Management Framework.
In the 2020/21 financial year, it is projected that non-concessional loans worth Shs6.16 trillion will constitute 89 per cent of the total external financing of Shs6.93 trillion. The MPs say non-concessional borrowing should be reserved for value -addition projects with a high social or growth impact return such as agro-processing industries and cold chain facilities as well as development of strategic tourist sites.
Domestic borrowing There is a projected reduction in domestic borrowing by 10.3 per cent, but this reduction is not substantial to give the public and private sector confidence that they will be able to get cheap capital to revamp their businesses.
This is seen from the static interest rates by commercial banks which is between 19 and 22 per cent, making it expensive for private investors to access credit. Government will also soon reduce external borrowing which is the biggest burden to the country.
It indicated that it is at the verge of failing to pay its domestic debt which has more than doubled in the last five years.
lt has risen from Shs9.9 trillion in 2014/15 to Shs15.5 trillion in 2018/19. Domestic borrowing is undertaken on highly competitive rates compared to external loans.
The MPs further stated: “However terms and conditions of these loans are not laid in Parliament so that they are enforceable by a resolution. This is a violation of Article 59(3) (o) of the Constitution and Section 35 (51) of the Public Finance Management Act.”
moketch@ug.nationmedia.com
