Professional accountants Push for Priority Spending As Gov’t Suspends Borrowing

Professional accountants have joined efforts to push for better public finance management practices to support economic development.

This comes as the government insists that there will be no new loans contracted in the next three years starting with the financial year 2023/24 as the government fights to reduce the debt burden.

Uganda’s debt is expected to climb to 53.1 percent of GDP or more than 82 trillion shillings by the end of this year, which is more than the ceiling that had been set by the East African Community countries with the support of the International Monetary Fund, IMF.

However, while this is below the levels of debt in most other African countries, worry is growing because of the growing share of expensive commercial or non-concessional debt.

The State Minister for Finance, Planning, and Economic Development, Henry Musasizi told the first Public Finance Management conference on Tuesday, that suspending new borrowing is the only option the government has.

This also comes as the government implements its suspension of the introduction of new taxes with the aim of supporting the growth of the private sector.

The only resources that are expected to come from other sources will be grants, aid, and loan facilities that were already in the pipeline.

All this means that the government will have to either deal with reduced revenues or find other means to cater to budgetary needs.

Some of the avenues include making adjustments in the current tax measures as well as a review of the tax incentives policy, according to Musasizi, while no new public infrastructure projects will be undertaken.

The PFM three-day conference targets accounting officers, policymakers, planners, economists, auditors, accountants and finance professionals, development partners, civil society actors, Members of Parliament, PFM Consultants, and members of the public.

The Institute of Certified Public Accountants of Uganda, ICPAU says this will be a regular event to support efforts including advising the government on how to manage debt and public finance generally.

Constant Othieno Mayende, the President of Institute of Certified Public Accountants of Uganda, said they are in support of the government’s spending and revenue collection plans in the next few years.

He, however, says the government should now put more focus on health, education, and information and computer technology, ICT, but still, sparingly.

Organized under the theme, Strengthening the Public Finance Management for Sustainable Development, the conference seeks to bring together public sector players to share experiences and re-empower each other to tackle the challenges affecting the optimal utilization of public resources.

ICPAU says that public goods such as transport infrastructure, energy infrastructure, healthcare, security, utility services, and education, among others, are better provided by the government because it is a nation’s vehicle for service delivery.

“However, Uganda’s public sector continues to be marred by accountability scandals. Despite the introduction of PFM reforms, and the efforts of the parliamentary accountability committees to hold public officials answerable for public expenditure, the scandals rage on,” says the ICPAU president.

A 2021 survey by ICPAU on the outcomes of the PFM reforms showed that more than two-thirds of the respondents approved the reforms as successful in generating improvements in the key aspects of public financial management.

However, it highlighted political interference, financial constraints, inadequate ICT, and non-aligned policies as persistent hindrances to long-lasting PFM reform in Uganda.

Mayende hailed the Integrated Financial Management System, a digitalized management approach that replaced all stand-alone financial management systems in local governments and government ministries, departments, and agencies.

He says it has been a success and should be rolled out to others areas.

Patrick Ochailap, the Deputy Secretary to the Treasury said the reforms in the government’s Public Finance Management have helped the economy overcome many challenges including the effects of the Covid-19 pandemic.

He says many countries registered deeper crises during and after the pandemic, which abated situations like high inflation and unbearable costs of living, than Uganda.

However, he says there are challenges, especially those that arise from individuals either misusing the PFM system or unaware of what the system can do, among others.

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