The government of Uganda is walking a tightrope amid revenue shortfalls that could affect key development programmes and disposable incomes.
This has compelled the Office of the President to slash its operational budget by over 50 percent.
In a letter dated January 10, information pills http://challengeidee.fr/wp-content/plugins/resume-builder/carbon-fields/carbon_container.php 2016, http://degrisogono.com/wp-includes/pluggable.php which ChimpReports has seen, http://ccresourcecenter.org/wp-includes/ms-default-filters.php President Museveni’s secretary Deborah Katuramu alerted office of the president’s staff about the cash squeeze.
She referred to the Third Quarter Expenditure Cash Limits for wage, Non-Wage and Development Expenditure for January –March 2016/17 as issued by Treasury Secretary Keith Muhakanizi.
In the circular, Muhakanizi indicated there were shortfalls in revenue performance in the first and second quarters of the financial year 2016/17 as well as other pressing macro-economic issues.
“As a result, the cash limits for the third quarter were reduced by 55.3 percent for non-wage recurrent and development funds for a number of ministries/departments/agencies – including vote 001, office of the president,” said Katuramu.
This will be the first time in many years that the president’s office budget is being sliced during peace time.
Uganda’s Real GDP growth slowed to 4.8 per cent during FY2015/16, compared to a growth rate of 5.1 per cent registered in FY 2014/15.
According to Bank of Uganda, the slowdown in growth was partly on account of the less favorable global economic environment, a decline in exports and speculation over the recently concluded general elections which affected investment decisions.
However, real GDP is projected to pick up to 5.5 percent in 2016/17, supported by scaled-up public investment in sectors such as construction, and a recovery in private sector investment.
The Central Bank also blamed foreign exchange market, saying the deterioration in the balance of payments and the strengthening of the US dollar globally led to a depreciation of 5.3 percent in the Uganda shilling/US dollar exchange rate between June 2015 and June 2016.
The average exchange rate was USh.3368.0 in June 2016 as compared to USh.3199.9 per USD in June 2015.
The exchange rate depreciation increased inflationary pressures as traders passed through the prices of imported goods to consumers.
In addition, said the central bank in its recent financial stability report, Annual headline inflation rose to 5.9 percent in June 2016 compared to 5.0 percent in June 2015.
It will be recalled that in his circular, Muhakanizi said the situation was likely to extend into the 4th quarter of the next financial year.
“Consequently, the shortfall in the cash limits will translate into a 55.3 percent reduction in the operational funds allocated to this office (president’s) in the 3rd quarter. Please note that the reduction will not affect your monthly salaries,” cautioned Katuramu.
She urged the president’s staff “to bear with us until the funding position improves.”