ANALYSIS OF THE FY2023/24 NATIONAL BUDGET: WHAT IS IN IT FOR THE WOMEN AND YOUNG PEOPLE OF UGANDA?

INTRODUCTION

The FY2023/24 National Budget was passed by the Parliament of Uganda in line with the provisions of the Public Finance Management (PFM) Act. The Budget Statement was presented by the Minister of Finance, Planning and Economic Development to the nation on Thursday 15^th June 2023 under the theme “Full Monetization of Uganda’s Economy through Commercial Agriculture, Industrialization, Expanding and Broadening Services, Digital Transformation and Market Access.” The budget amounts to UGX 52.7 trillion. Total government spending for the coming year (including interest but excluding domestic arrears) is set at UGX 39.7 trillion, representing an increase of 7.9% compared to FY 2022/23 and an increase of 10.7% against the projected spend. This total represents 19.3% of GDP (the same ratio as for FY 2022/23).

MAKING SENSE OF THE ALLOCATIONS TO THE 18 PROGRAMS ACCORDING TO NDPIII.

The table below indicates allocations to different programs, a percentage share of the budget and increases/decreases in allocation based on FY 2022/23:

Programme	FY 2022/23 Budget allocation (UGX billions)	% Share	FY 2023/24 Budget allocation(UGX billions)	%Share of Budget	%Change from FY 2022/23
Human Capital Development	9,124	24.8%	9,580	24.1%	5.0%
Governance and Security	7,423	20.2%	7,677	19.3%	3.4%
Private Sector Development	1,607	4.4%	1,911	4.8%	18.9%
Transport, Infrastructure & Services	4,306	11.7%	4,493	11.3%	4.3%
Development Plan Implementation	1,218	3.3%	1,804	4.5%	48.1%
Climate, Nat. Resource, Environment & Water	617	1.7%	427	1.1%	-30.8%
Sustainable Energy Development	1,582	4.3%	1,343	3.4%	-15.1%
Agro-Industrialisation	1,419	3.9%	1,813	4.6%	27.8%
Legislation, Oversight & Representation	915	2.5%	946	2.4%	3.4%
Administration of Justice	400	1.1%	432	1.1%	8.0%
Sustainable Development of Petroleum Resources	864	2.3%	447	1.1%	-48.3%
Regional Development	1,187	3.2%	863	2.2%	-27.3%
Tourism Development	195	0.5%	248	0.6%	27.2%
Digital Transformation	130	0.4%	192	0.5%	47.7%
Manufacturing	419	1.1%	219	0.6%	-47.7%
Community Mobilisation & Mindset Change	74	0.2%	35	0.1%	-52.7%
Mineral Development	33	0.1%	47	0.1%	42.4%
Public Sector Transformation	209	0.6%	413	1.0%	97.6%
Innovation, Technology Development & Transfer	27	0.1%	257	0.6%	851.9%
Agro-Industrialisation	1,419	3.9%	1,813	4.6%	27.8%
Total (excluding interest)	32,118		33,671		4.8%
Interest	4,692	12.7%	6,062	15.3%	29.2%
Total (including interest)	36,810	100.0%	39,733	100.0%	7.9%

HUMAN CAPITAL DEVELOPMENT (HCD).

In FY2023/24, Government has earmarked Ushs. 9.58 trillion (24.2% of the total Budget) for the Human Development Programme. However, the National Youth Council (NYC) has been subjected to budget cuts from UGX 4 billion to UGX 800 million.

AGRICULTURE.

Agriculture remains the backbone of Uganda’s economy, with approximately 70% of the population engaged in agricultural activities. The government has allocated UGX 2.2 trillion to agriculture and this is a considerable increase of 52% from UGX 1.45 trillion in FY 2022/23.

PRIVATE SECTOR DEVELOPMENT

To facilitate the Private Sector Development (PSD) programme towards achieving the intended results, the Government has allocated UGX 1,849 billion (5.9% of the total budget) for the FY 2023/24 of which UGX 1,059.40 billion (42.7%) is to fund the implementation of the Parish Development Model (PDM). The FY 2023/24 budget allocation increased from UGX 1,653.91 billion appropriated in FY 2022/23 representing a growth of 12%. In the same regard, UGX 2.83 billion has been allocated to local governments in form of non-wage conditional grant to facilitate implementation of PSD trade and industry activities at those levels.

MANUFACTURING SECTOR

Manufacturing sector can be one of the drivers of economic growth and development, employment creation and ensuring positive balance of trade among other advantages. In FY 2022/23, manufacturing contributed 15.7% to Uganda’s total Gross Domestic Product. Key priorities in FY 2023/24 include:

1. Fast track implementation of the industrialization policy by developing industrial parks.
2. Support local industries to acquire appropriate technologies and product certification.
3. Support local industries to access cheap and affordable electricity.

The Free Zones invested USD 37.63 million and created 1,056 new jobs. They also contributed UGX 66.36 billion in local purchases and subcontracting expenses between July 2022 and March 2023.[1]

TOURISM AND HOSPITALITY

Tourism is a youth facing sector and it contributes enormously to Uganda’s economy. The industry is slowly recovering from the COVID19 pandemic as indicated in the table below with increasing revenue generation and tourism arrivals.

FINANCIAL YEAR	NUMBER OF TOURISTS	INCOME GENERATED (USD)
FY 2021/22	500,000	503,000,000
FY2022/23	814,508	1,014,000,000

For FY2023/24, UGX 249 billion  has been allocated to tourism which is an increase from UGX 194.7 billion allocated in FY 2022/23.

ICT SECTOR

The Government has set aside UGX 185.1 billion in FY 2023/24 for the ICT sector marking a 49 percent increase from the UGX 124 billion allocated in FY 2022/23. This is intended to among others Deploy Wireless Fidelity (WiFi) to 820 locations (targeting schools, hospitals, markets) in the selected sub-regions and Continue facilitating scientific research and innovation.

There is need for increased prioritization of initiatives such as Business Process Outsourcing. For instance, the support rendered by the National Information Technologies Authority (NITA-U)  to a total of 10 Business Process Outsourcing centers through the extension of NBI connectivity and price stabilization created 452 employment opportunities to benefit the youths. Such initiatives should be scaled up.

OTHER CRITICAL ALLOCATIONS WHERE OPPORTUNITIES FOR YOUTH ABOUND.

• An allocation of Shs. 4.5 trillion, representing 13.3% of the total budget, has been budgeted for road maintenance and construction, railway development and rehabilitation, water and air transport development. Of particular significance, an allocation of Shs I billion (Shs 176 billion) has been provided to each District, City and Municipality for road grading, murram and compacting.
• Shs. 1.3 trillion has been allocated for Electricity interventions to among others ensure construction of 761 km of transmission lines and associated power sub-stations to improve the stability and reliability of the networks.
• An allocation of Shs. 192 billion has been provided to accelerate digital transformation agenda in which WiFi will be deployed to 820 locations, targeting schools, hospitals, markets in the selected sub-regions.

CONCLUSION.

Interest continues its upward trend against the current year budget, now making up over 15% of the total spend. However, the budgeted amount is only marginally higher than the actual projected interest cost for FY2022/23 (UGX 6,062 billion against 6,047 billion). However, Government plans to pursue tight control and elimination of unnecessary expenditure, with specific limits on new motor vehicles and foreign travel. The budget also relies heavily on recurrent expenditure and there is little left for development expenditure.

The Government’s economic priority areas such as boosting household incomes via initiatives such as Emyooga and the Parish Development Model, commercializing agriculture, capitalization of Uganda Development Bank, allocations to the ICT sector, supporting private sector growth, and enhancing infrastructure and technology are mainly youth facing and have received increased allocations.

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[1] Uganda currently has 37 Free zones; 5 of which are private and 32 public.