NPA’s Muvawala urges Uganda gov’t to cut spending to address country’s economic woes
Proposes cuts in the gov’t transport bill to save & invest in fuel and food reserves
The Executive Director of the National Planning Authority Dr. Joseph Muvawala has called for cuts in government spending, as a way to solve some of Uganda’s economic challenges.
Muvawala made the comments while giving a keynote speech at the 10th Certified Public Accountants (CPA) Economic Forum in Entebbe.
Muvawala says that the root cause of Uganda’s economic crisis is the decline in revenues for the government arising from reduced economic activity.
Dr. Muvawala argued therefore that there is need to cut government expenditure. His justification for the budget cuts to ensure that spending equals to revenue and thereby enabling the government to reduce its dependency on borrowing and losing money in repaying money.
In the current financial year for example, interest payments alone will take the largest chunk of government revenues. The Ministry of Finance says it plans to pay UGX 4.7tn on interest repayment alone. The government plans to spend a total of UGX17.4 trillion in paying debts including interest. 74% of the interest payment will go to local investors such as commercial banks, insurance companies and other investors that buy government securities.
On that note, Muvawala stressed that the country’s revenue source of UGX22 trillion vis-a-vis the national budget standing at UGX48 trillion, is unsustainable as it has created a huge deficit which calls for adjustment in the expenditures by the government.
Muvawala explained that with such cuts on import bills and other government expenses, Uganda would be in position to invest in priorities like establishing and replenishing the fuel and food reserves of the country that come in handy in situations of economic crises.
“For me I think, in this period we should be cutting all the vehicle budgets, all of us and putting that money to ensuring that we have fuel reserves, after all we are not going to be able to drive these expensive cars. And when you know that in government for us we drive the biggest cars, I should be driving the biggest car, fortunately I do not and by choice. So I think as government, we should be looking at our import bill at this point in time and cutting all those government imports…in the short term and take that money into at least firstly into the fuel reserve, the second reserve is the Food reserve,” Muvawala.
The Executive Secretary Certified Public Accountants (CPA) Derrick Nkajja is optimistic that there will be some solutions to the economic challenges at the end of the 10th CPA Economic Forum, which will contribute to Uganda’s national economic policy formulation.
Nkajja said that the basic reason of this meeting is to ensure we give policy guidelines, policy proposals that can help the economy move forward.
“We are meeting at a time when the economy is not doing right and the basic cost of living is being challenged and our theme is very clear; a Responsive Economic Agenda, we want to see how best we can we have polices that can work for a common person in a challenging time like this, not only to work for them but also develop the country,” said Nkajja.
During the same occasion, Muvawala revealed that his body is planning to present to Cabinet a proposal on Establishing a body that will set Salaries for all public servants.
The NPA chief Muvawala says his organization is planning a present a proposal to Cabinet to establish a Commission that will determine salaries of public servants in order to bring an end to the endless strife about pay by public servants.
Muvawala said the establishment of the Commission will bring an end to wide income disparities and inequalities among civil and public servants.
Speaking to this year’s theme; A Responsive Economic Development Agenda, Muvawala noted that this is not the appropriate time for the government to be increasing salaries for any group of public servants.
Currently public servants like teachers, executive directors and officials of government departments and authorities earn different salaries regardless of the seniority or even similarities in the services they offer.
“We have a problem with our salaries, these salaries are not standard…you have executive directors doing the same functions but earning different salaries, we have supervisors earning less than their juniors in these ministries, Agencies and Department …..so we think that this salary spectrum has to be rationalized and we think if you are to get value out of this salary rationalization , we need an independent commission which can rationalize all salaries; of politicians, of civil servants, public servants, such that we do not have a system that creates unproductivity within the system,” said Muvawala.