Discrepancies and Pending Bills Hampering Fiscal Consolidation, Says Institute of Public Finance

The Institute of Public Finance (IPF) has unveiled its fourth edition of the Annual National Shadow Budget, focusing on the challenges faced by the government in an era of fiscal consolidation.

The report, titled “Budgeting in an Era of Fiscal Consolidation: Protecting Key Priorities,” highlights several bottlenecks hindering the government’s efforts to achieve its fiscal goals.

Key issues identified in the report include discrepancies in budget allocations, low absorption rates of budgets, pending bills, and duplication of functions. These challenges are impeding the government’s fiscal consolidation strategies and impacting the effective utilization of public funds.

Speaking at the release of the report, the Vice Chair of the Budget and Appropriations Committee of the National Assembly and Teso South Member of Parliament shared her insights on the thorny issue of pending bills. She expressed concerns about the recurring problem of pending bills accumulating year after year and emphasized the need for urgent action.

The MP suggested amending the Public Finance Management (PFM) Act to empower the Controller of Budget further. This would enable better monitoring of funds from her office to commercial banks or County Governments, ensuring that funds are used for their intended purposes and not diverted.

Another critical point raised by the MP was the need for more realistic and credible budgeting. She highlighted that over-ambitious revenue projections often lead to overestimation, resulting in unmet expectations and accumulating pending bills. This unrealistic budgeting approach leads to projects being initiated without adequate funds, exacerbating the problem further.

The timely release of funds from the national treasury was also stressed by the MP. Delays in fund releases, especially towards the end of the financial year, make it challenging for counties and ministries to absorb the funds, leading to funds being returned and adding to the pending bills.

Furthermore, the MP emphasized the importance of aligning budget estimates with the Budget Policy Statement (BPS) and key government priorities. She stressed the need to assess the value for money in proposed projects and prioritize the completion of ongoing projects before initiating new ones.

Addressing the needs of vulnerable groups was also highlighted as a crucial aspect of budgeting. The MP called for adequate allocation of funds to address issues such as gender-based violence, early pregnancies, health issues (including HIV and COVID-19), and social protection for the elderly.

Lastly, the MP suggested consolidating various scattered funds like the Hustler Fund, women enterprise fund, and youth fund to ensure a more significant impact and better value for money.

The IPF report and the insights shared by the MP underscore the need for improved fiscal management, realistic budgeting, timely fund releases, and a focus on projects that provide value for money and address the country’s priorities and the needs of its people. Addressing these challenges will be crucial for the government to achieve its fiscal consolidation strategies and ensure effective utilization of public funds.