Just weeks before the reading of the 2013/2014 budget, an economist has urged Government to take up flagship budgeting if it is to grow equally.
Augustus Nuwagaba, an economics professor at Makerere University, explains that this is where there is concentration effort on one specific sector which has a multiplier effect in other sectors.
Professor Nuwagaba says emphasis should be placed on Agriculture which has 73 percent of Ugandans stuck in subsistence farming majority of whom are women. Nuwagaba is convinced that farmers will be able to get higher values for agriculture over the value chain with more income that will cater for education and health fees in the families.
However, if government wants to insist on general budgeting across sectors and spreading thin the little resources, it means there will be no sufficient and specific output in the economy.
Nuwagaba also castigated what he called archaic manner in which the ministry of finance continues to operate under a cash budget.
While speaking on Thursday at a budget advocacy group meeting by Civil Society groups, Nuwagaba argued that under this system, they will budget for activities under a particular financial year and the money that remains is remitted back.
Professor Nuwagaba, who is also a Poverty Eradication Consultant in the African Region, advises that government can also shift to the accrual budget approach in which they take transactions and record them as they occur.
The accrual budget approach also allows government to plan activities as they occur irrespective of whether money has been forwarded or not.
The economist also notes that though Uganda’s macro-economic growth is impressive with a low inflation, a lot still needs to be done on the micro-economic level.
In 2008 Uganda had a macro economic growth level of 8.4 percent, though this growth is not reflected at household level considering they still lack basic needs such as food and housing among other needs.
in January 2012, the International Monetary Fund estimated that Uganda’s economy will grow by 5.5 percent a year, down from 6.4 percent in 2011.
Nyabushozi County MP Col Fred Mwesigye, who is a member of the budget committee, says in order to improve the micro-economic growth in the country, there is need to open up an agricultural bank. The bank should also have low interest rates and a joint venture between government and ordinary Ugandans.
Col Mwesigye says he argued with Finance Minister Maria Kiwanuka to set up the agriculture bank in the last financial year.
Mwesigye says though the minister promised to put more money in the development Bank it has not been easy. Government is supposed to contribute 50 percent of the capitation with banks contributing the other 50 percent. However, the commercial banks are still charging interest rates on their contribution.
This means Ugandans interested to invest in large scale commercial farming find it difficult to access the money and those who get the money fail to pay the high interest rates.