Kampala- The 2017/18 National Budget will see the ministry of Trade, Industry and Cooperative (MTIC) docket relegated to the periphery yet again.
This is evidenced by the shoestring budget allocated to the sector the government expects to play a critical role in delivering the much-talked about middle income status.
In an interview last week, technocrats at the ministry said if the sector is not properly funded, it will be difficult for the country’s transformational agenda to be implemented to the fullest.
Furthermore, the 2017/18 ministry’s budget has been slashed by Shs2.6 billion, further distressing the implementers of the sector programme.
The assistant commissioner in charge of policy and planning at MTIC, Mr George Sserunjogi Mukiibi, said: “The truth of the matter is that the sector allocation is badly wanting.”
He continued: “The Shs2.6billion reduction will bite hard because already MTIC is one of the least funded sectors yet we think it should be up there in terms of priority.”
Specifically, according to the ministry economist, Mr Julius Tumusiime, the most impacted items of the sector budget, due to the meagre allocation and the budget reduction, include implementation of the ministry’s day to day work plans and operations.
“Field work will be affected because there will no enough money for fuel and this will in turn impact on the frequency and quality of supervision,” Mr Tumusiime explained.
This newspaper also established that rural industrialisation programme, refurbishment and establishment of storage infrastructure to support national food reserves system as well as revival of cooperative movement will not be a priority due to lack of implementation funds.
Export development fund, Uganda National Bureau of Standards (UNBS) capacity building and proper facilitation of district commercial offices will equally be affected.
According to the ministerial policy statement, MTIC has for the financial year 2017/18 been allocated Shs24.4 billion, with wage and non-wage expenditure consuming more than half of the budget.
Allocation meant for development activities has the least budget of Shs1.5 billion, with the remaining balance of about Shs8.8billion being channeled towards donor development activities, given that they are the financiers.
Meanwhile, the seven important agencies and institutions under the MTIC, among them UNBS, Uganda Development Cooperation and Uganda Export Promotion Board are all underfunded.
The total sector budget allocation of Shs110 billion represents a paltry 0.39 per cent of Shs28 trillion national budget for the financial year 2017/18.
According to the sector analysts as well as a section of civil society, the MTIC budget allocation for the financial year 2017/18 will not aid the government drive to transform the country from a peasantry to a modern and prosperous country within 30 years and thereby realise the Vision 2040.
They argued that the sector is critical for employment creation, increasing government revenue, addressing challenges of balance of payments and increasing household incomes.
But with that paltry funding, the country director of Southern and Eastern Africa Trade, Information and Negotiations Institute (SEATINI-Uganda), Ms Jane Nalunga, said: “In order to undertake its mandate, the ministry must be well funded. The current funding despite the slight increment from the previous year is still inadequate to cater for the demands of a sector.”
She continued: “Despite the above, we are concerned that for the FY 2017/18, the budget allocation to the sector has been reduced to Shs94.39 billion which amounts to no more than 0.4 per cent of the Shs28.2 trillion of the National Budget FY2017/18.”
While the ministry has registered a total of 17, 062 cooperatives societies, only 380 have been supervised to ensure compliance to the Cooperatives Law and Regulations.
12 cooperatives were inspected to ensure compliance and proper management and governance, 10 were audited to ensure proper financial ability and reporting, investigations were undertaken on four cooperatives. The cooperatives sector is still an underfunded priority.
Observations and recommendations
According to a statement by the civil society organisations (CSOs), despite progress made by the government to enact laws and policies to curb unfair competition practices; promote domestically produced goods and services; regulate the sugar sector; curb trade of illicit and counterfeit goods on the market; and to domesticate the WTO agreement, the ministry continues to be challenged with the implementation challenges.
Currently, the ministry’s budget allocation indicates higher allocations to operational expenses and wages as compared to resources allocated for implementation.
The sector according to the CSOs such as SEATINI and the Food Right Alliance, should therefore be allocated at least 4 per cent of the total national budget to facilitate more efficient allocation of resources.