UNRA, Ministries Of Energy & Health Return Shs1.3tn To Treasury

By Staff Writer

With just a few days left for Parliament to embark on the scrutiny of the 2019/2020 national budget, an analysis into the 2017/2018 budget has showed that Uganda National Roads Authority (UNRA) and Ministries of Health and Energy failed to spend the Shs1.310 trillion they had budgeted for, despite not receiving 100% releases.

The details of the expenditure were made public recently by Amos Lugoloobi, the Chairperson Parliamentary Budget Committee while presenting the report on the Budget Framework Paper, with State Minister for Planning, David Bahati acknowledging that some public entities hold onto funds, at the expense of the other sectors that are underfunded.

According to the Budget Committee report, the overall approved budget amounted to Shs2, 370.642 trillion and by the end of June 2018, the overall sector budget release amounted to Shs2, 289.672 trillion, translating to 96.60%.

However, out of the total released budget, Shs1,518.317 trillion was actually spent, which is equivalent to 64%, leaving a total of Shs771.35bn of unspent balances with the poor absorption largely registered in the Large Hydro Power Infrastructures program, where Shs529.38 billion was unspent .

Difficulty in acquisition of Right of Way (RoW) affected works on all transmission line projects, where contractors were denied access to the project sites, and compensation was not fully undertaken.

Yet the poor absorption hasn’t given the Treasury second thoughts on lumping funds in the Energy sector whose funding is projected to increase by Shs224.6bn from Shs2, 438.2 trillion to Shs2, 662.8 trillion.

The increment will affect largely the program; Petroleum Exploration, Development, Value Addition and Distribution products that will have its budget increased from Shs57.928bn to Shs519.67bn and the increment is due to the prioritized activities under the Midstream activities of construction of the Oil refinery budget at Shs467.65bn from external financing.

But the large Hydro power infrastructure will have its budget reduced from Shs751.03bn to Shs664.5bn as a result of anticipated Isimba-HPP completion and Commissioning scheduled for early this year, however, Karuma-HPP project is still allocated substantial resources to the tune of Shs556.9Bn.

The other project responsible for increment of funding to energy sector if the Rural Electrification Agency projected to have its budget excluding Appropriation in Aid increased from Shs636.5bn to Shs67l.1bn an increment of Shs34.6bn with the bigger potion of the budget is allocated to the project bridging the demand gap through the accelerated rural electrification Program (TBEA) of Shs260.4bn.

UNRA Stuck With Shs450Bn

The report also highlighted that the approved budget allocation for the Works Sector was Shs4, 621.29bn in FY 2017/2018, of which only 75% was released with the poor release performance attributed to the poor performance of external financing releases that had only 45% of the approved budget released by the end of the financial year.

However, Shs2, 996.58 trillion was spent, registering an absorption rate of 56% with UNRA accounting for the highest unspent balance of Shs450.3bn followed by KCCA with an unspent balance of Shs34.6bn.

The Committee pointed at the Hoima-Wanseko, Muyembe-Nakapiripirit, Kampala Flyover North Eastern Road-Corridor Asset Management Project and Rukungiri-Kihihi-Ishasha/Kanungu as the Road projects with the highest unspent balances under external financing.

There were also concerns raised on Road Maintenance versus Road development, where road development still takes the biggest share of the budget, at 90% while road maintenance is still a 7%of the total budget, warning that such imbalance is resulting in unsustainable development of the network while the backlog maintenance is growing and will result in higher replacement costs of the road asset in future.

But even when UNRA returned a big chunk of funds to the coffers, this hasn’t deterred the Executive from funding the sector further as witnessed in the coming budget projections, where the total sector budget excluding Arrears and Appropriation in Aid for Works is projected to increase by 110% from Shs4, 786.62 trillion approved in FY 2018/19 to Shs5, 316.85bn projected in FY2019/2020, bringing the increment to Shs530.23bn.

This allocation will increase the share of the budget from 15.3% in FY 2018/19 to 16.5% in FY 2019/2020 with the increment mainly attributed to budget increments towards the Ministry and in particular towards Transport Services and Infrastructure program.

The increase in the program is mainly driven by two projects: Development of Kabale Airport and Uganda National Airline Project that are projected to increase from Shs176.3Bn and Shs129.5Bn approved in FY2018/19 to Shs531.4Bn and Shs429.2Bn respectively.

The Committee also noted that the budget allocated to road maintenance can only finance 25% of the road maintenance backlog which currently stands at Shs3, 148 trillion in FY 2019/2020, leaving 75 percent unmet.

Lugoloobi told Parliament; “This implies that there is a need to urgently fund road maintenance given the projected road development programs in the medium term.”

Based on the Sector Outcome Indicators, the Proportion of National Road Network in fair to good condition (paved) is targeted to decrease from 97% in 2017/2018 outturn) to 88% in FY2019/20 and the same trend is also expected in regards to, the Proportion of National Road Network in fair to good condition for unpaved roads.

The Committee argued that there is need for clarification on why the proportion of National road network is projected to worsen from the current performance.

Yet still, the Sector Outcome indicators, showed that the Casualty per 100,000 person by water transport is targeted to increase from 4 persons in 2017/2018 to 20 persons in FY2019/2020 with MPs calling on the Works Ministry to explain why the indicators of water safety are projected to worsen from what was realized in the past financial year.

Health Ministry Fails To Spend Shs88Bn

As at the end of June 2018, the overall sector budget release for the Ministry of Health amounted to Shs1, 291,46 trillion representing (68.7% with the performance attributed to the lower than expected release performance under the development budget category and Appropriation in Aid.

But out of the total released budget, Shs1, 202.99 trillion was actually spent equivalent to 93.1% leaving a total of Shs88.47bn out of the released budget unspent.

A further analysis of the Budget Performance Report by Ministry of Finance, for FY2017/2018  unearthed a number of budget implementation challenges under the health Sector, which challenges are similar to those reported during the FY2015/2016 and 2016/2017 with MPs arguing that this indicates that the Sector has not instituted appropriate mitigating interventions to curb these challenges.

The Ministry was faulted for conducting poor planning characterized with initiating projects before adequate appraisal and costing as well as delayed commencement of procurements.

In some cases, implementing Entities have committed Government above the approved estimates and availability of resources in the medium term expenditure plans, thus leaving a number of projects stalled notably the construction of staff houses under the Italian Support in Karamoja and the surgical complex at Mubende RRH.

Other projects like the maternity Ward complex and Gulu have outlived their contractual periods resulting in endless extensions which have resulted in loss of time, value for money and deprecation of facilities.

The coming financial year is likely to bite the Health Sector budget with projections indicating a reduction to a tune of Shs31.29bn from Shs2, 363.56 trillion approved in FY2018/19 to Shs 2,332.27 bn in FY 2019/20.

The situation is likely to worsen in the coming financial years with the medium term sector budget outlook projected to decline from the approved amount of Shs2,363.56Trn approved in FY2021/2022 to Shsl,779.l trillion in FY2022/2023 on account of projected declining external financing towards development projects.