Revised Uganda finance law raises queries

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Parliament last week passed the controversial Public Finance and Management Bill 2015 which allows the government to borrow and spend money from the central bank without the approval of Parliament

Under the new law the government can borrow 10% of the total approved National Budget from Bank of Uganda without parliamentary scrutiny.

In the first draft version of the Bill, the government wanted to borrow 18% of the total approved budget, but legislators lowered it to 10 %.

Reacting to this, Cissy Kagaba, the Executive Director of Anti-Corruption Coalition of Uganda said stepping on the powers of  legislators to influence public spending will lead to financial indiscipline since the oversight role of Parliament has been removed.

Kagaba is not the only one who is worried. The Civil Society on Budget Advocacy CSBAG said the decision will affect the country’s monetary policies which may result into the countries currency depreciating against international currencies because if the financial Indiscipline by the Ministry of Finance. Julius Mukunda the National coordinator of CSBAG said “Allowing government to borrow without parliamentary approval would be to remove the oversight function of parliament and if the government granted such power it may affect the country’s monetary policy.” 

Justifying the revised law, Matia Kasaija, the finance minister told legislators,  he faced  an embarrassing  situation when he failed to pay salaries at the beginning of  the financial year, because the government  did not  have enough money  in the Consolidated Fund yet the country operates on a cash budget .

“We operate a cash budget and the cash position is very low and we cannot meet  the Treasury operations. We want to get advances from Bank of Uganda  and pay back later. That is why we tabled this bill before you Members of Parliament”

UN WOMEN country Director Hodna Addou while meeting stakeholders in Kampala last week before the Bill was passed said it was against gender inclusion when it comes to resources allocation and asked the legislators not to pass the bill as it was in the draft because it will set back the achievement Uganda has achieved in gender mainstreaming.

“The UN WOMEN  is more concerned by the proposal  by the Ministry of Finance to repeal  the provision on the requirement  to represent  a certificate certifying that policy  statements  of  the vote  are gender  and equity  responsive  once the government proceed with the proposal this will have big impact in addressing social and economic challenges affecting  special groups in Uganda,” she said.

Gulu Woman Member of Parliament  Betty Achan said the clause will be retained  as it’s  in the principle  ACT of  2015.

“It seems the Government was in a financial challenge that is why parliament passed the amendment on borrowing but the issue of repealing the clause on gender certificate is still on the floor of parliament as women Legislators we shall fight to see that that clause in retained  as it’s in the principle ACT” The  MP  told  East African Business Week.

SOURCE: November 17th 2015: http://www.busiweek.com/index1.php?Ctp=2&pI=4413&pLv=3&srI=68&spI=107