Government releases Shs7.3trillion for quarter two spending

The Ministry of Finance, Planning and Economic Development has released Shs7, 307 billion for the second quarter of the Financial Year 2022/23.

The release comes at a time when the country is still grappling with the increase in domestic prices that have risen with the annual headline inflation at 10% in September 2022, up from 9% recorded in August 2022.

According to Ramathan Ggoobi, the Permanent Secretary of the Ministry of Finance, Planning and Economic Development, the depreciation of the shilling is due to the strengthening of the US dollar which has affected the prices of imports.

The PS said the increase in the price of food items (beans, matooke, tomatoes, Irish potatoes etc) whose harvest was affected by the dry weather conditions experienced at the beginning of this financial year was not good for the Annual Headline Inflation.

“However, with the onset of rains, the prices of food items are projected to come down in the second half of the financial year. Fuel prices have also peaked and show signs of lessening,” he explained giving a glimpse of hope.

However, Ggoobi said that the quarter 2 financial releases had been set taking into account the improved performance in revenue and the need to support continued economic recovery, stability and controlling inflation.

He said the released money support wages, non-wage recurrent expenditure, Uganda National Oil Company (UNOC), security institutions, Uganda National Roads Authority (UNRA), and agricultural institutions among others.

“Shs1, 780 billion has been released to ensure the comprehensive provision of salaries – this includes an enhancement for scientists and health professionals. Shs397 billion has been provided for the Parish Development Model, Shs337.3 billion for UNOC, and Shs305.1 billion has been released for operations of security institutions,” Ggoobi apportioned the money.

Another part of the money allocated in this quarter 2 includes Shs265.95 billion for pension and gratuity for Q2, Shs137.9 billion for Uganda Road Fund of road maintenance, Shs122.41 billion to National Medical Stores and Shs30.273 billion to agricultural institutions to cater to for the planting season.

Ggoobi also noted that Shs1, 429 billion has been released to local governments to cater for wages, non-wage, development and Uganda Support to Municipal Infrastructure Development (USMID).

Local Government Releases

• Wage                  Shs796.73 billion
• Non-wage          Shs265.72 billion
• Development    Shs221.79 billion
• USMID               Shs144.28 billion

On the revenue side, Ggoobi said Shs177.9 billion surpluses have been registered between the months of July to September 2022.

He said with this surplus, the government has been able to fully fund the quarter without external support.

Meanwhile, Ggoobi has urged accounting officers to prioritize payment of service providers in time and avoid the accumulation of arrears.

He also emphasized the need for timely submission of performance reports and accountability and payment of wages, salaries, pensions and gratuities by the 28th of every month.

Government still remains committed to controlling inflation, by coordinating between both monetary and fiscal policies, and in line with this, the Bank of Uganda increased the central business rate from 9% to 10%.