Latest info has it that the government intends to push US$400 million (Approx.Shs1.5 trillion) worth of supplementary budgets through parliament in the next two months. The money must be passed urgently before the current FY2018/19 closes in June.
Source familiar with the details of the government move say the supplementary budgets were expected as has become the norm before an election year. However, the size and components of the supplementary budgets are raising eyebrows.
The anticipated $400 million is about 5% of the Shs32.7 trillion total resource envelope for FY2018/19. It is bigger than the budgets of most ministries.
Part of this money, according to a survey by the Independent magazine, is $100 million (Approx.Shs370 billion) extra that President Yoweri Museveni has directed the Finance Ministry to allocate towards the defence budget.
This means that instead of the usual supplementary budgets that many see as part of Museveni’s pre-election planning which includes building a financial war chest for the 2021 elections, the portion for Defence could be part of preparations in case of a war with Rwanda.
The directive to increase defence spending followed two meetings this month; one with security chiefs and another with officials from the Finance Ministry, The Independent understands.
Museveni first met the security chiefs and discussed “tensions with Rwanda”, said a source familiar with the details of the meeting on conditions of anonymity because of the sensitivity of the matter.
After this meeting, the source added, Museveni then summoned officials from the Finance Ministry who he directed to make the allocations.
The $ 100 million is marked as classified expenditure under the defence ministry, insiders say.
Given that initially the allocation towards defence was about Shs.2.2 trillion (Approx. $600 million), the new allocation brings to about Shs 2.6 trillion, the total defence budget for the financial year ending this June. That is a one percentage point rise on Defence spending in the FY 2018/19.
Details indicate, however, the Defence is likely to get significantly bigger allocation in the next FY2019/20 budget that Finance officials are putting together. The total resource envelope for next financial year was projected to be about Shs.35 trillion (Approx.US$9.5billion).
In this budget, Defence spending was set to drop to Shs.1.9 trillion according to National Budget Framework Paper (NBFP).
Now, The Independent understands, the Finance Ministry will add another $270 million (Approx.1 trillion) to the defence budget for 2019/2020 alone. This will bring Uganda’s defence spending to close to $1 billion dollars again.
Uganda last spent $1 billion dollars on defence in 2011. That year, Uganda even surpassed regional giant Kenya’s defence spending for the first time.
Of the US$ 1.02 billion, US$270 million was spent on its usual defense budget items (food, salaries etc) and US$ 750 million on acquisition of 6 Su-30MK Russian jets.
The acquisition of the jets elevated Uganda’s air force to one of the most advanced combat aircraft squadrons in East and Central Africa, the Stockholm International Peace Research Institute (Sipri), which tracks conflicts and military spending globally, reported.
In its recent report, Trends in international arms transfers, 2011, SIPRI notes that the purchase of the fighter jets and other arms increased Uganda’s military expenditure by 300%, dwarfing Africa’s 9% and the world’s 24% expenditure on arms.
Given that this time the budget for the financial year 2019/2020 has only increased by Shs.2 trillion from the current financial year, Defence, it appears will swallow half of the national budget increment.
The Defence budget is skyrocketing at a time when allocations to other sectors are dipping.
For instance, the Health budget is reducing from Shs2.3 trillion to Shs2.2 trillion and Education is equally facing a cut from Shs2.7 trillion from shs2.6 trillion, according to details in parliament’s Budget Committee report on the NBFP.
It is also growing at a time debt is piling and the taxman is facing tough times meeting its revenue collection targets. Uganda Revenue Authority (URA) has registered over a Shs1 trillion revenue shortfall and debt now stands at Shs41.3 trillion or 41.5% of national Gross Domestic Product.
As a result, Treasury Operations, which deals with domestic debt refinancing, was allocated a total of Shs9.5 trillion. The other lion’s share Shs5.3 trillion up from Shs.4.7trillion went to the Works Ministry.
The doubling of the defence might not come as a surprise; especially for those following tensions between Uganda and Rwanda closely.
Rwanda escalated tension in late February when it introduced new stiff guidelines at its border with Uganda at Gatuna. Uganda’s Foreign Minister, Sam Kutesa, explained that Rwanda has imposed a trade embargo and ordered a raft of high cost and non-tariff barriers.
The Rwanda move saw Kenyan President Uhuru Kenyatta travel to both Kigali and Kampala on March 11 to meet with Museveni and Rwandan President Paul Kagame as part of diplomatic efforts to calm tensions.
Despite these efforts, however, Uganda and Rwanda are said to have armies on standby, and recruiting and training more. Both Museveni and Kagame have recently been seen spending time with their armies.
While addressing a National Leadership Retreat (commonly known as Umwiherero) at Gabiro in Kigali recently, President Kagame said the tensions with Uganda could mean reallocating more resources to defence.
Insiders say Uganda is increasing its defence spending in the face of the likelihood of a war with Rwanda.
But Museveni has always wanted to be seen as the military giant of the region. He has wanted a strong well-equipped army ever since his government formulated its security policy in 2001.
Initially, Museveni needed to defeat the Joseph Kony Lord’s Resistance Army (LRA). Then he entered Somalia to fight against the al Shabaab. But he has also been in competition for regional military superiority with; especially Kenya. But he has feared being caught unprepared by spill-over of war in South Sudan and Sudan, and now Rwanda.
Part of the reason, some experts say, is that President Museveni has been keen to be seen as a major player in pacifying the reason.
But the other is that he has been keen to keep the UPDF in battle in order to keep the soldiers busy while improving their experience and resources. Between 2012 and 2013, Uganda reportedly ordered new batches of weapons, including tanks and ant-tank missiles.
As a result of Museveni’s efforts, observers say, the UPDF has been chiseled into a modern fighting machine with proper systems. There have not been reports of ghost soldiers on the payroll and in recruitment, promotion, deployment, and procurement are said to be professionally handled.
Officers in specialised units such as artillery, armored and air defense, have undergone a lot of training locally and abroad. The units have also been reinforced with personnel and modern equipment.
Most of the training happens at the Senior Staff and Command College at Kimaka in Jinja. Previously training of officers was slow because Uganda was sending one or two officers a year to command and staff colleges in Ghana, USA or UK. With Kimaka, the country can output 40 officers a year, sources say.
The UPDF leaders say increased professionalism; including deploying right officers in the right command positions, has led to increased operational effectiveness.
The UPDF was able to break the back of the Joseph Kony Lord’s Resistance Army (LRA) rebellion in Northern Uganda, and deploy peace-keeping and stabilization forces in Somalia and South Sudan.
Also, as a result of these deployments, Uganda’s military proved to be double-blessing for Museveni; keeping Museveni as a strategic ally of the U.S in the war against terrorism and earning him dollars.
Under the United Nations and African Union peacekeeping agreements, troop-contributing countries are reimbursed if they deploy with their own equipment, both lethal and non-lethal under an arrangement named reimbursement of Contingent Own Equipment (COE).
At some point Uganda was being reimbursed up to US $7million and the U.S. has severally donated equipment to the Ugandan military.
These handouts have in turn allowed President Museveni to use some of the money budgeted for the army to fund his politics.
That is why even now, the rest of the Shs1.5 trillion that will soon be passed by parliament as supplementary budgets is seen as money intended to fund NRM campaigns.
It might appear early days to the 2021 elections, but preparations have already kicked off. The NRM rolled out its electoral road map and recently at the retreat of its MPs at Kyankwazi selected President Museveni as their flag bearer in the 2021 polls.
Supplementary budgets have a major concern, especially before elections. The International Monetary Fund (IMF) had a major fall-out with President Museveni over supplementary budgets; especially the ones requested towards elections.
But the supplementary budgets have grown year on year. And if the past is anything to go by, ahead of the 2021 elections, more supplementary budgets are in the pipeline.
Year on year, President Museveni’s government has been tabling more and bigger supplementary budgets. They have been increasing from 4% in 2008/2009 of the national budget, to 7.2% in 2009/2010 and over 30% in 2010/11.
In 2015, Finance Minister, Matia Kasaija requested for a Shs847 billion supplementary budget of which, only Shs11.9 billion was for development expenditure and a whopping Shs728.1 billion for recurrent expenditure.
Critics said it was a slush fund for Museveni’s 2016 bid.
One of Kasaija’s predecessors, Syda Bbumba, delivered supplementary budgets of close to a trillion shillings–with the last round coming in December 2010 right in the middle of campaigns.
Bbumba first got parliament to approve a supplementary of Shs600 billion then another of Shs380 billion.
Around that time, President Museveni had got Central Bank Governor Tumusiime Mutebile to draw from the reserves a staggering Shs1.7 trillion for acquisition of six Russian-made jets and their accompaniments.
It later emerged the six jets cost Shs108billion each or Shs654 billion in total and not the Shs1.7 trillion passed by parliament. That left Shs1.1trillion unexplained.
While some of these funds might have been spent on the other weapons, as this was classified expenditure, central bank Governor Tumusiime Mutebile later said this “not completely transparent” expenditure might have found its way into funding Museveni’s campaign.
Mutebile said they might be the reason the economy was thrown into “total chaos almost after the last elections”.
“I cannot determine how much of the money that I have created ends up in political electioneering. It happens,” he said.
Basing on the trend of previous elections spending and estimates by insiders, The Independent estimated that the ruling party spent over Shs350 billion in 2011. That figured went up to over Shs500 billion in 2016 and is set to increase further in 2021.
The consequences are always dire as such spending often diverts resources from critical areas. Also, to fill the gap, the central bank is always forced to sell treasury bonds to the private sector, sucking money from it and crippling private investment.
After the 2011 elections, Uganda’s inflation rate jumped to about 30%. And after the 2016 elections, economic growth fell to slightly over 3%.
Other factors, such as the civil war in South Sudan, which cut off Ugandan traders, might have contributed to the poor economic performance but diversion of resources was critical. For instance, the government failed to pay some Shs400 billion owes to local entities. These in turn failed to meet their loan obligations. Many of them folded. A few left standing were crippled.
It is because of such consequences that experts say that while the government is entitled to this arrangement, supplementary budgets should, under current regulations, not exceed 3% of the entire national budget.
But with elections looming and a threat of war with Rwanda, that is the last caution President Museveni might want to consider.
CREDIT: INDEPENDENT MAGAZINEAdd your comments: Download Our News App Here