WHY PUBLIC RESOURCES ARE VULNERABLE TO MISUSE BY INCUMBENTS

Published by Patra K on

Why public resources are vulnerable to misuse by incumbents

Former Finance Minister Matia Kasaija (pictured) on 11th June 2020 just before the reading of the Budget.

The amendment of the Presidential Elections Act in 2010 allowing the incumbent to continue using state resources to facilitate their campaigns did not only give the incumbent undue advantage over the rest of the candidates but also left public resources vulnerable to misuse. As the 2021 campaign period intensified, there was increasing fear that the national budget, as has been the case in previous elections, would be used as a tool to finance partisan electoral activities.

It is was therefore critical for ACFIM to examine public institutions that have a great influence on the election process to have pointers on the potential utilization of public resources for partisan electoral activities.

It was premised on the understanding and suspicion that some of the funds from the national treasury could have been used to influence electoral outcomes for candidates at the different levels. The starting point is to understand the legal regime on public financing for elections.

Legal Regime on Public Financing for Elections

Article 67(3) of the constitution provides for candidates to be accorded similar treatment in accessing State-owned media to present their programs to the people. Experience from the 2021 general elections proved the contrary and State-owned media was dominated by the incumbent National Resistance Movement (NRM) party.

In addition, the Public Finance Management Act (PFMA) 2015, provides a framework for fiscal and macroeconomic management providing a Charter for Fiscal Responsibility and procedures for virements, multi-year expenditures, supplementary budgets, and excess expenditure, contingency fund and for commitments against the Consolidated Fund. The limitless appetite has served to defeat the purpose of budgeting and PFMA.

In 2010, the Political Parties and Organizations Act 2005 (PPOA) was amended to insert Section 14(a) to provide for the use of government funds or other public resources to political parties or organizations represented in Parliament; (b) in respect of elections funding shall be on an equal basis; and (c) level of public financing for Political Parties and or Organisations shall be based on the numerical strength of each party in Parliament. Section 14(b) has been persistently ignored.

Half-year budget performance highlights FY 2020/21

In the Financial Year (FY) 2020/21, the total approved budget by the Parliament of Uganda was UGX 45.493 trillion ($12.465 billion) but was later revised to UGX 48.856 trillion ($13.385 billion).

Revised annual budget allocations H1 FY 2020/21 (in trillion)

 

 Total Approved Budget

 Total Revised Budget

 Total Warrants

 Total Payments

 % Payments to Revised Budget

 % Warrants: Cash Limits

 % Payments: Warrants

Central Government

                                 

32.009

   

35.363

 

       

18.979

 

               

17.187

                48.60

          99.44

          90.55

Local Government

                                   

4.160

     

4.176

         

2.227

                 

1.587

                38.01

          99.56

          71.27

Local Revenue

                                      

0.215

         

0.215

 –

 –

 –

– 

– 

Project Financing

                                   

9.101

     

9.101

         

2.217

                 

2.217

                24.36

       100.00

        100.00

Total

45.493

48.856

  23.424

20.991

42.97

 99.33

 89.61

Source: Ministry of Finance Planning and Economic Development

By the end of December 2020, 42.97% of the total budget was spent. Central government spent 48.6% of their approved budget while local governments and projects had an expenditure performance of 38.1 and 24.36 respectively.

Budget performance H1 FY 2020/21


Source: ACFIM’s compilations and computations

While the revised budget for Local Revenue was UGX 215.590 billion, no funds were released and spent as local revenue by end of December 2020. From the analysis above, most of the activity for government expenditure was in central government. Local governments not only got 38% of their total revised budget they also only spent 71% of their total warrants.

Budget Performance for Selected outputs under State House H1 FY

As part of her mandate of monitoring money in public institutions especially those that are politically sensitive, ACFIM monitors State House financing. By the end of H1 FY 2020/21, State House had spent UGX 451 billion ($123.6 million) as a supplementary on the non-wage budget category. This supplementary was over and above the approved non-wage budget for the State House. The expenditure for the non-wage budget was 151.5%

State House had received its entire approved budget for the FY 2020/21 because the release performance was at 145.5% of the total budget and the explanation given for over performance was;

“There were a number of emerging issues which heightened the scale of activities; hence spending more than what was actually planned within the first half of the year”[1]

However, the activities that caused overspending were not stated. This is a red flag for the diversion of funds to deal with the “emerging issues”. The secret known is that State House is home to a number of projects.

In State House, the output that had the highest expenditure was Logistical Support, Welfare, and security provided to the President, Vice President, and their families. UGX 148 billion ($40.547 million) was approved by Parliament for expenditure on this output but by the end of December 2020, UGX 454.73 billion ($124.8 million) was spent making a budget spent performance of 309.9%.

SecretsKnown notes that the classified expenditure was UGX 418.11 billion ($114.5 million) by the end of the 1st half of the FY 2020/21 and in comparison, to the approved classified budget for State House by Parliament, the budget spent performance was 613.9%. Section 24(1) of the PFMA (as amended) 2015, guides that money appropriated under classified expenditure shall only be used for defense and national security purposes.

There is however no explicit mechanism for confirming this Section of the law since this is covered up by Section 24(3) which underlines confidentiality as the reason for a non-detailed classified budget. As such we can only observe the very high expenditure in comparison to the approved budget but with no possible explanation hence reducing the budget credibility.

 

Categories: Newsletters

0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *