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    FULL BUDGET SPEECH: Number Of Poor Ugandans Increasing



    Today during the budget reading at Serena Hotel, finance minister Matia Kasaija told the nation that whereas income per person has increased, inequality between rural and urban areas has risen with rural poverty rising from 22.8% in 2013 to 25.8% in 2017, against a marginal increase in urban poverty from 9.3% to 9.4%.

    Below is Kasaija’s full budget address.


    Your Excellency the President,

    The Right Honourable Speaker of Parliament,

    His Lordship the Chief Justice,

    The Right Honourable Leader of the Opposition

    Honourable Ministers and Members of Parliament,

    Your Excellencies, Ambassadors and Heads of Diplomatic Missions

    Distinguished Guests,


    Ladies and Gentlemen.

    1. Madam Speaker, in accordance with Article 155(1) of the Constitution of the Republic of Uganda, I presented, on behalf of His Excellency, the President, the budget for Financial Year 2018/19 to Parliament on 25th March 2018. The budget was duly approved by Parliament on 1st June 2018, for which I very much commend Parliament.

    2. So today, I am presenting just the highlights of the approved budget.



    3. Madam Speaker, the Financial Year 2018/19 Budget has been formulated based on the socio-economic achievements made in the recent past, and the challenges that we still face today. The right policies that the National Resistance Movement (NRM) Government has consistently developed and implemented over several years have led to key socio-economic development


    4. Madam Speaker, the NRM Government has, to state the obvious, since 1986 laid a firm foundation for Uganda’s socio-economic development. Witness the following:-

    i. Uganda is now at peace and without any civil conflict, which provides a suitable environment for investment. Security of persons and property reigns, although some criminal minded individuals want to disrupt this peace;

    ii. The rule of law now permeates all spheres of life, with a sound Judiciary and the enforcement of contracts being guaranteed by commercial law;

    iii. Economic stability has been consistently maintained with the economy growing at an average annual rate of growth of 6.5% for the last 30 years, together with fairly low inflation;

    iv. Ugandan exporters now enjoy duty free access to both the East African Community (EAC), and East and Southern Africa (COMESA) markets, a few non tariff barriers notwithstanding;

    v. Energy and Transport gaps, which are the major cost drivers for businesses are being seriously addressed.

    5. Madam Speaker, as a result of these basics, the quality of life of most Ugandans and the standards of living of households in Uganda have tremendously improved. For Instance:-

    i. Incomes have increased with average per capita incomes nearly doubling in the last eight years, from Shs 1,354,000 in FY2009/10 to Shs 2,684,000 in FY 2017/2018, in spite of a rising population;

    ii. The number of Ugandan employees in the formal sector grew at an average annual growth rate of 6 per cent between 2010 and 2013 and the national unemployment rate declined from 11 per cent in 2013 to 9 per cent in 2017;

    iii. 86.1% of the population are within a 5 kilometers access to health facilities compared to 83.3% in 2013;

    iv. More families are living in houses built with permanent materials with 75 percent of households living in iron roofed shelter in 2017 compared to 68 per cent in 2013;

    v. Access to the national electricity grid has increased from 14 percent in 2013 to 22 percent today. In addition, 18% of households use solar power, and 6% use paraffin lanterns. A further 21% of households use batteries for lighting.

    vi. Access to improved sources of drinking water has increased from 68 percent in 2013 to 78 percent in 2017.

    vii. There were 10.2 million pupils enrolled in primary schools in 2017 compared to 8.7 million in 2013. In addition, disparities between boys and girls in both primary and secondary education have also reduced with the sex ratio in primary schools increasing from 0.96 in 2013 to 0.99 in 2017, and in

    secondary schools from 0.89 to 0.95 over the same period.


    6. Madam Speaker, despite the demonstrable gains achieved by the mighty NRM Government over the years, Uganda still faces major development challenges which include the following:-

    i. 68.9% of Ugandan Households remain engaged in the subsistence economy. These households are highly vulnerable to risks such as drought that results from climate change. 43% of these households are engaged in subsistence agriculture, producing what they consume;

    ii. Whereas income per person has increased, inequality between rural and urban areas has risen with rural poverty rising from 22.8% in 2013 to 25.8% in 2017, against a marginal increase in urban poverty from 9.3% to 9.4% over the same period;

    iii. Agricultural sector growth has been low, growing at an average annual growth rate of less than 2 % over the last 25 years, compared to population growth of 3% annually;

    iv. Small and Medium Enterprises (SMEs), Manufacturing Firms and other Private Sector entrepreneurs are still faced with high costs of electricity and transport, limited and expensive financing and competition, mainly from cheaper goods from Asia;

    v. Inadequate or inappropriate skilled labour failing to meet the manpower requirements for the job market;

    vi. Low entrepreneurial knowledge and limited application of technologies in production processes, particularly in agriculture and industry;

    vii. Limited availability of patient and appropriate long-term finance to start or boost SMEs and private sector investment.


    7. Madam Speaker, in order to consolidate the progress the NRM Government has achieved, and address the challenges we still face, I will elaborate the budget strategy later in my statement.

    8. Madam Speaker, the Financial Year 2018/19 Budget theme is “Industrialization for Job Creation and Shared Prosperity”.

    We adopted this theme this financial year in consultation with the East African Community partners. It will guide the budget in both preparation and execution for the next three financial years.

    9. Madam Speaker, in my presentation today, I will restrict myself to the following:-

    i.                    Reporting on the performance of the economy; ii. Presenting the Budget Strategy that addresses our development challenges and propels Uganda into Middle Income Status;

    iii. Updating Parliament on the performance of key selected sectors in financial year 2017/18 Budget, and the priorities for the coming financial year; and

    iv. Highlighting the financial year 2018/19 revenue measures to enhance domestic revenue mobilization and key priority expenditure allocations.

    II. Financial Year 2017/18 Economic Performance and Medium

    Term Economic Outlook


    10. Madam Speaker, in the Financial Year 2017/18 the economy has been influenced by both global and domestic developments.

    Global Developments

    11. Madam Speaker, growth of the global economy is estimated at 3.9 percent in 2017, up from 3.2 percent in 2016. This is mainly due to recovery in advanced world economies, and rising commodity prices including the price of crude oil resulting in increased trade volumes.


    Domestic Development

    Economic Growth

    12. Madam Speaker, economic output is estimated to grow by 5.8% during this financial year, higher than the performance of 3.9% last year. The size of the economy is now Shs 101.8 Trillion equivalent to USD 27.9 Billion. This growth was the result of the following:

    i. The Services sector which grew at 7.3% compared to 5.4% last financial year. This performance was mainly as a result of improvement in the financial, Information and Communications and trade subsectors.

    ii. The Industrial sector which expanded by 6.2% compared to 3.4% last financial year due to good performance in construction and agro-processing, and recovery in the Mining and Quarrying sub-sectors.

    iii. The Agriculture sector whose growth doubled during the year to 3.2% compared to 1.6% last year. The improved performance was mainly due to better weather conditions, control of pests and diseases and targeted Government interventions, particularly seed distribution and provision of better extension services.


    Domestic Prices

    13. Madam Speaker, despite the increase in the global price of oil this year, inflation has remained stable and in single digit.

    Annual headline inflation is projected to average 3.6%. This is mainly due to the increased supply of agricultural output, coupled with sound economic policy management.


    Private Sector Credit and Interest rates

    14. Madam Speaker, the stock of outstanding Private Sector Credit increased from Shs 11.9 Trillion in March 2017 to Shs 12.8 Trillion in March 2018, recording an annual growth of 7.8%, which is higher than 6.1% a year earlier. The recovery of private sector credit signifies improvements in economic activity, business confidence, and increased private sector demand for credit

    partly due to lower interest rates. This recovery in private sector credit would have been stronger if the banks were not overly risk averse. The Central Bank Rate (CBR) was reduced from 11.5% in March 2017 to 9% in March 2018, with lending rates falling from 22.5% to 20.1% over the same period. Nonperforming loans nearly halved from 10.5% of gross loans in December 2016 to 5.6% in December 2017.


    International Trade

    15. Export earnings rose by 9.6% to US$ 3.93 billion in the period July 2017 to March 2018 from USD 3.59 billion a year earlier.

    This increase was mainly on account of a rise in the export volumes of beans, coffee, tea and maize. Over the same period, exports to the rest of the EAC grew from USD 792.3 million to USD 943.5 million; while exports to Europe grew from USD 415.8 million to USD 466.1 million.

    16. Madam Speaker, on the other hand imports increased by 16.4% valued at US$ 5.7 billion in the period July 2017 to March 2018 from US$ 4.9 billion over the same period the previous year.

    This was attributed to the increase in the prices of oil imports and the increased inflow of capital goods to support domestic investment, particularly in oil and gas, electricity and roads.


    International Reserves and Exchange Rate

    17. Madam Speaker, despite some disruptions in our export markets in the region, international reserves continue to accumulate. By March 2018, our reserves were US$ 3.6 Billion which could finance 5 months of our future imports.

    18. The Ugandan Shilling was relatively stable against the US dollar during the first half of 2017/18. The Shilling marginally weakened against the US dollar by only 0.6 percent having moved from a monthly average of Shs. 3,601.5 in July 2017 to Shs. 3,623.3 in December 2017. This outcome on the exchange

    rate was mainly due to, among others, increased export receipts especially from coffee and tea. However, since March 2018, the shilling has lost ground against the US Dollar on account of increased demand from the energy, oil and manufacturing sectors.


    Domestic Revenues

    19. Madam Speaker, despite the revenue shortfall this year, domestic revenues have improved on an annual basis on account of increased capacity to collect taxes. During the financial year just ending, tax and non-tax revenue is estimated at Shs. 14.5 Trillion, equivalent to14.2% of GDP.

    20. Madam Speaker, transferring the administration of Non-Tax Revenue to Uganda Revenue Authority has significantly improved revenue collection from this source, estimated at Shs 430 billion this year compared to Shs 354 billion last year.



    21. Madam Speaker, total government expenditure during this financial year is estimated to amount to Shs. 27 Trillion equivalent to 26.5% of GDP. Excluding domestic refinancing, development expenditure this year amounted to 44% of the budget. The absorption of externally borrowed funds doubled to about 75%, although disbursements were less than programmed, leading to underperformance of the development budget. This

    improvement is attributed to the continuous implementation of reforms in public investment management and strengthened supervision of projects. Government is working with the development partners to increase the capacity of Ministries Agencies and Local Governments, in these areas.


    Budget Deficit and its Financing

    22. Madam Speaker, the fiscal deficit this year is estimated at 4.8% of GDP, a 0.9 percentage point increase over last year’s level.

    This is a result of an increase in development expenditure and other investments, which rose to 8.8 percent of GDP, up from 7.9 percent last year. The deficit was financed largely by both concessional and non-concessional loans, and to a lesser extent through domestic borrowing, which increased from Ushs 612 billion last year to Ushs 1,690 billion this year.


    Public Debt

    23. Madam Speaker, as at March 2018, public debt stood at USD 10.53 billion of which USD 7.18 billion is external and USD 3.35 billion is domestic. The ratio of Public debt to GDP now stands at 38.1 percent in nominal terms. This is much lower than the threshold of 50% beyond which public debt becomes

    unsustainable. Our public debt is therefore sustainable over the short to medium term, even when we include the financing required for priority projects in the pipeline.

    24. Madam Speaker, in line with the Medium Term Debt Strategy, our borrowing strategy is to contract concessional loans while restricting commercial loans to the financing of infrastructure and self – financing projects. This will help to ensure long term debt sustainability.


    Medium Term Economic Outlook

    25. Madam Speaker, the outlook for our economy is very positive. Economic activity is projected to expand by at least 6 percent next financial year and increase to 7 percent per annum in the medium term. This higher growth will be supported by stronger cash crop yields, through reorganized agricultural

    activities, ICT, financial services, and efficiency gains from public infrastructure investments. In addition, oil production, regional integration, and the completion of many infrastructure projects will further support this higher growth.

    26. Government will pursue fiscal and monetary policies that maintain macroeconomic stability and support inclusive growth, while safeguarding debt sustainability.

    27. Fiscal policy will continue to support ongoing infrastructure investment and social service delivery. To achieve this, the Domestic Revenue Mobilization Strategy (DRMS) targets a revenue-to-GDP ratio of 16 percent over the medium term. In the long-term, our desired revenue-to-GDP ratio is 18-20%.

    28. Structural reforms will focus on enhancing the budget process, public investment management, preparing for oil production including putting in place a strong governance framework for the sector, and strengthening the financial sector.


    III. Financial Year 2018/19 Budget Strategy

    29. Madam Speaker, the Financial Year 2018/19 Budget Strategy seeks to consolidate the gains made by the NRM Government towards the attainment of middle Income status. This objective will meet the aspirations of the Ugandan people and ensure the optimal utilisation of our natural resources. These goals have been captured in the NRM Manifesto, the Vision 2040 and the National Development Plan II, which aim to achieve Prosperity for Ugandans through Job creation and inclusive development.

    30. Madam Speaker, the Budget Strategy seeks to address the development challenges that I elaborated on earlier and deliver the aspirations of Ugandans in the following key result areas:-

    i. Commercialization of Agriculture

    ii. Industrialization and Productivity enhancement

    iii. Financing Private Sector Investment

    31. Madam Speaker, whereas next financial year’s budget will consolidate ongoing investments in the key priorities of Security, Infrastructure and Human Capital development, the Budget Strategy is mainly aiming at spurring Agriculture, Industrialization and Private Sector development.


    Commercialization of Agriculture

    32. Madam Speaker, commercializing agriculture raises incomes of Uganda households, addresses the challenge of subsistence, and enhances agricultural productivity, as farmers integrate with agro-manufacturing industries. Integration between agriculture and manufacturing boosts the supply and reliability of agricultural raw materials for the industrial sector; creating

    jobs for non-farming communities. This will entail the following:-

    i. Organizing farmers into producer cooperatives or groups linked to nucleus commercial farmers who will be encouraged to add value to farmers’ produce, put up efficient storage and minimize post-harvest losses;

    ii. Providing agricultural extension services to improve farming practices and increasing the uptake of appropriate research and technologies;

    iii. Reducing reliance on rain-fed agriculture and mitigating impact of climate change through irrigation, including use of solar powered irrigation pumps, and rain water harvesting;

    iv. Completing the rural electrification programme to rural growth centers;

    v. Strengthening enforcement of regulations for standards and quality assurance;

    vi. Facilitating market access for agricultural products through export development;

    vii. Implementing the National Agriculture Finance Policy that will streamline and guide financing of Agriculture and attract investments into the sector;

    viii. Provision of medium and long term financing from the Agricultural Credit Facility (ACF), the Microfinance Support Center, and the Uganda Development Bank (UDB);

    ix. Fully implement the subsidized Agriculture Insurance programmes under the Uganda Agriculture Insurance Scheme (UAIS), which provides loss protection from natural disasters for farmers.


    Industrialization and Productivity Enhancement

    33. Madam Speaker, competitive industrial development increases the capacity of manufacturing firms to increase productivity. This will entail the following:-

    i. Support entrepreneurs in making investments in the manufacture of industrial products;

    ii. Provision of serviced industrial parks, free zones and dedicated works spaces;

    iii. Continue infrastructure development to reduce costs of electricity, allow efficient market access through reliable road and rail infrastructure development, and Information and Communications Technology (ICT) development;

    iv. Enhance regional market access and trade within the East African Community by implementing uninterrupted border operations, building border markets and removing non-tariff barriers;

    v. Diversifying export earnings by developing new export product markets, Europe and Asia included;

    vi. Align and build skills required for the job market;

    vii. Support science and technology innovation;

    viii. Provision of business and industrial development services such as easy business registration and investor licensing by reducing bureaucracy, and incubation of start-up manufacturing enterprises;

    ix. Support the use of appropriate technologies.


    34. Madam Speaker, agro-Industrialization is an important aspect that will unlock Uganda’s natural potential in agricultural production, while further developing the formal Manufacturing Sector. In addition, it presents an avenue for promoting inclusive and equitable growth, given the dominance of agriculture as the source of livelihood to most Ugandans especially in the

    rural areas. It also provides sustained and reliable market for agricultural production, while providing jobs to the growing urban population. Agro-industrialization is therefore a key strategic objective that creates the necessary conditions for Uganda’s structural transformation into a high value-added manufacturing economy.


    Financing Private Sector Investment

    35. Madam Speaker, addressing constraints to financing the private sector is key to sustainable investment. The following strategy seeks to increase the availability of capital for long term investment:-


    i. Continue to capitalize the Uganda Development Bank, and support its borrowing from International Development Financial institutions to enable the private sector to borrow at low interest rates;


    ii. Further provide affordable credit through the Microfinance Support Centre to Small and Medium Enterprises (SMEs);


    iii. Implementing the Capital Markets Master Plan to guide mobilization of long term financing for business and Government infrastructure, including the listing of Public and Private companies on the Uganda Stock Exchange to raise equity financing;


    iv. Strengthening the Uganda Microfinance Regulatory Authority (UMRA) to eliminate fraud in SACCOs and deal with unethical practices by some money lenders;


    v. Remove deficiencies in Uganda’s Anti-Money Laundering and Combating of Financing of Terrorism (AML/CFT) Regime in order to ease correspondent banking; foreign direct investment; and other investments and financial flows between Uganda and the rest of the world.


    IV. Sector Performance and Strategic Priorities

    36. Madam Speaker, I now turn to key sector performance for the Financial Year 2017/18 budget, details of which are in the Background to the Budget. In this regard, I will focus on the performance and respective priority interventions that have been approved in the forth coming Budget.



    37. Madam Speaker, marked progress has been recorded as a result of Government interventions in Coffee and Fish, to mention a few. Coffee exports have increased from 3.6 million 60 kg bags recorded in financial year 2015/16 to 4.14 million bags recorded between July 2017 and May 2018. Increased enforcement of good fishing practices on water bodies has reversed declining fish stocks and catches. Consequently, fish exports have increased from 18,050 metric tonnes in 2015 to 19,500 metric tonnes in 2016 and Aquaculture is growing at 6% per annum. During the year, other developments in the Agriculture sector include the following:-


    i. The NAADS/ Operation Wealth Creation programme continued the distribution of tea, fruit and cocoa seedlings; beans, grain seed including maize, rice and sim-sim to over 3.7 million households. In addition 15,500 households received improved breeding stock for poultry, goat, dairy and beef cattle;


    ii. The National Agricultural Research Organisation (NARO) developed and released three coffee wilt disease resistant varieties, three banana hybrids, and three fortified bean varieties.


    38. Madam Speaker, in order to enhance water for production, the following interventions were implemented during the year:


    i. Five newly constructed irrigation schemes were commissioned as follows:- 1,178 hectares at Doho II in Butaleja District, 480 hectares at Mubuku II in Kasese District, 1,000 hectares at Wadelai in Nebbi District, 500 hectares at Torchi in Oyam DIstrict, and 880 hectares at Ngenge in Kween District.


    ii. Completed construction of 50 small scale irrigation demonstrations and water harvesting sites in selected districts under 9 Zonal Agriculture Research and Development Institutes;


    iii. Constructed 155 valley tanks with a total capacity of 8 million cubic meters in drought prone or cattle corridor districts of Nebbi and Gulu in Northern Uganda; Nakasongola, Mukono, Nakaseke, Wakiso, Mpigi, Mubende, Kayunga, Lyantonde, Gomba, Kalungu, Luwero, Buikwe, Mityana in Central Uganda; Katakwi, Kumi, Kamuli, Jinja, Soroti, Buyende, Bugiri in Eastern Uganda; and, Kiruhura, Isingiro and Fort Portal in Western Uganda;


    iv. Completed the construction of 7 small scale solar powered Irrigation Schemes in the districts of Bugiri, Amuria, Soroti, Isingiro, Mbarara, Lwengo, Oyam and Alebtong;


    v. Finalised contracts for design of 5 Multi-purpose storage dams at Kyenshama in Mbarara District, Ojama in Serere District, Makokwa and Kyahi in Gomba District, Geregere in Agago District and Nakaale in Nakapiripirit District.


    39. Madam Speaker, in order to achieve higher levels of commercialisation and productivity in agriculture, the key sector priorities Government will focus on next financial year include:-


    i. Enhancing extension services by recruiting an additional 1,968 extension workers that are needed to achieve the recommended extension worker/ household ratio of 1:500;


    ii. Establishment of regional mechanization centers in a phased manner of 3 years commencing with Northern Uganda. These centers will build infrastructure for water for agricultural production, and provide maintenance for agricultural machinery on a cost recovery basis;


    iii. Rehabilitating the National Semi-Arid Agricultural Research Institute at Serere and the Zonal Agricultural Research and Development Institute at Rwebitaba.

    40. Madam Speaker, I have allocated Shs. 893 billion to the Agriculture Sector next financial year.



    41. Madam Speaker, the tourism sector today earns USD 1.4 billion compared to USD 498.3 Million in 2008. By 2020, tourism is targeted to earn USD 2.7 billion annually and tourist visitors are expected to reach 4 million per year, compared to 1.3 million today.


    42. The sustained conservation of our tourism resource is what will guarantee the viability of the sector. Government has therefore intensified land patrols in the national game parks in order protect tourism resources. In addition, Government has engaged communities in proximity to the national parks to ensure heritage conservation.


    43. Madam Speaker, over the last year, Uganda was show cased as a tourist destination at three international expos including the China Expo, the World Travel Market (WTM) London, and the International Tourism Fair in Spain (FITUR). The procurement of Market Destination Representation firms has also started to yield tangible results. For instance, the number of tourists from

    the United States alone increased by 17% in 2016. Additional market representation is being procured to cover other markets like the United Kingdom, Germany, China, United Arab Emirates and Japan.


    44. Madam Speaker, promoting domestic tourism is also Government’s priority. Domestic tourism promotional campaigns (Tulambule) and education outreaches on culture, tourism and wildlife conservation were held. The ‘Tulambule’ campaign, in addition to the Pearl of Africa Tourism Expo 2018,

    Miss Tourism Competitions 2017, and activities for Buganda, Busoga and Kigezi clusters continue to register success with more Ugandans increasingly participating across the country.

    In order to further harness Uganda’s tourism potential and enhance access to tourist sites, maintenance work has been undertaken for a total of 368kms of roads in various National Game Parks and Reserves. This has improved the experience at these game parks.


    45. Madam Speaker, to further unlock the Tourism sector’s potential next year, the following priorities will be implemented:-


    i. Consolidate the gains realised by Market Destination Representation firms show casing Uganda as a tourist destination in six international fairs;


    ii. Redevelop tourist infrastructure including the renovation of the Uganda National Museum, building walkways at several sites on Mt Rwenzori and constructing 40-bed accommodation each at Murchsion Falls, Lake Mburo and Kidepo Valley;


    iii. Using PPP arrangements, develop Kalagala and Itanda tourism sites, as well as the Dolwe Islands cultural Site;


    iv. Develop and expand Namugongo Martyrs shrine;


    v. Reduce conflicts between humans and wildlife by maintaining existing 210 kms and excavation of an additional 100km elephant trenches in Queen Elizabeth National Park (QENP), Murchison Falls National Park (MFNP), and Kibaale National Park (KNP);


    vi. Developing Uganda as a regional hub for biodiversity and cultural tourism as well as providing incentives for Conferences, Meetings and Exhibitions;


    vii. In addition to international tourism, promote domestic tourism through targeted marketing interventions, such as the Tulambule campaigns;


    viii. Improving standards and quality in Uganda’s Tourism Sector through registering, inspecting and classifying tourism facilities to enhance service delivery.


    46. Madam Speaker, I have allocated the Tourism Sector Shs. 32 billion next financial year.


    Minerals, Oil and Gas


    47. Madam Speaker, during the year, the mineral sub-sector attracted USD 1.63 billion in capital investment by the private sector in key projects including:


    i. The Guangzhou Dong Song phosphate plant at Sukulu in Tororo planned for commissioning by end 2018 and for steel by 2019, with a total investment of

    USD 620 Million;


    ii. African Panther who have commenced mining and processing of tin in Isingiro;


    iii. Increased limestone and cement production by four cement factories namely Tororo Cement, Hima Cement, National Cement, Kampala Cement,

    together with a combined investment of USD 500 Million.


    iv. Consolidated African Mineral Resources has invested about USD 5 Million to process 60 metric tonnes of high grade graphite.

    48. Madam Speaker, in order to strengthen the performance of the minerals subsector, Government will commencing next financial year undertake the following priority actions:


    i. Enact a new legal, fiscal and regulatory framework to govern the mining industry;


    ii. Establish and operate a mineral certification system


    in Entebbe to increase mineral products trade in the great lakes region and to gain global competitiveness;


    iii. Extend National Seismological Network by at least 2 stations per year and strengthen earthquake research facility and monitoring network station in Entebbe;


    iv. Fully operationalize the Mineral Protection Police Unit to curb illegal mining and undertake the biometric registration of all artisanal and small scale

    miners (ASMs).


    Oil & Gas

    49. Madam Speaker, Government has taken a number of important steps towards facilitating oil production. These include the following:


    i. Oil Companies that were granted licenses to start production have completed Field Development Plans and are now in advanced stages of completing engineering designs for the oil fields;


    ii. Government completed acquisition of the Refinery Project Land and to-date, 98.3% of the Project Affected Persons (PAPs) have been fully compensated, and those opting for relocation received their new houses;


    iii. The Lead Investor, the Albertine Graben Refinery Consortium (AGRC) in partnership with Government will carry out the engineering designs for the Oil Refinery over the next 15 months, after which construction will commence;


    iv. After completion of the project agreements between the Governments of Uganda and Tanzania, and the Oil Companies to develop the proposed East African Crude oil export pipeline, the construction of the Crude Oil Pipeline is expected to commence next financial year;


    v. Construction of the Hoima Airport commenced in January 2018, while contracting for the 600 km of Oil Roads infrastructure critical for the production of oil will be completed by end of this month.


    50. Madam Speaker, the commercialization of oil provides enormous opportunities for Ugandans for jobs and the private sector, with respect to the supply of required inputs and services. Building capacity of local companies to participate in commercialization of oil is therefore a key concern. Government has provided the necessary procurement rules and regulations to ensure the

    promotion of local content in the Oil and Gas Sector. I appeal to the private sector to fully take advantage of this policy.



    51. Madam Speaker, over the years, Government has invested heavily in power generation. Substantial progress has been made with total energy generation growing by 8% since 2009.

    This Energy mix of generation capacity includes small and large hydro plants and Thermal power generators. As a result, current power generation is estimated at 930 MW. An additional 783MW will be added to the national grid in the next two years on completion of the 600MW Karuma and 183 MW Isimba power projects.


    52. Madam Speaker, it is now critical to invest in the power transmission and distribution network to supply power to industries and other consumers. The energy mix will also be further diversified to scale up provision of renewable energy such as solar to off-grid areas.


    53. In the next financial year, priority will therefore be given to expansion of the transmission and distribution networks to industrial zones and rural growth centers to support our industrialization programme. We shall, in addition, replace parts of the dilapidated network that accounts for about 30% of power losses.


    54. Madam Speaker, other interventions in the energy sector will include the promotion of efficient utilization of energy, and enforcing actions against vandalism and illegal connections.



    55. Madam Speaker, increasing the stock of road infrastructure remains a key priority and significant progress has been made this year. The Fort Portal-Kamwenge and the Mbarara Bypass roads were completed, adding a total of 107.5 kms of new paved roads to the national network.


    56. In addition, partial works were completed totaling 806 kilometers of roads that are being upgraded to tarmac. These include the following:-


    i. Gulu – Acholibur, 76.61 Kms done;

    ii. Olwiyo – Gulu Road, 42.28 Kms done;

    iii. Acholibur – Kitgum – Musingo Border, 78.66 Kms done

    iv. Mbale-Bubulo-Lwakhakha Road, 3.15 Kms done

    v. Kabwoya – Bulima, 41.84 Kms done

    vi. Kyenjojo – Kagadi – Kabwoya, 37.73 Kms done

    vii. Mubende-Kakumiro-Kagadi Road, 29.76 Kms done

    viii. Mpigi – Kabulasoke- Maddu Road, 60.44 Kms done

    ix. Kanoni – Sembabule, 88.57 Kms done

    x. Mukono – Katosi – Nyenga Road, 67.27 Kms done

    xi. Musita-Lumino-Busia-Majanji Road 32.58Kms done

    xii. Akisim -Soroti – Katakwi –Iriri 53.98 Kms done

    xiii. Kampala-Entebbe Express Highway 46.77 Kms done

    xiv. Kampala Northern Bypass Phase two, 6.74 Kms done

    xv. Nakapiripirit – Moroto [incl Moroto Municipal Roads] 65.10

    Kms done

    xvi. Ntungamo- Kagitumba/Mirama Hill road 36.48 Kms

    xvii. Nshwerenkye – Rushere, 10.90 Kms done

    xviii. Kashenyi – Mitooma HQs & Kitabi Seminary, 3.44 Kms done


    57. Madam Speaker, in order to keep the existing roads in good condition, a total of 311 kilometres of roads were rehabilitated as at March 2018. The roads whose rehabilitation is complete include:-


    i. Namunsi – Sironko – Muyembe (32.0 Kms)

    ii. Muyembe – Kaserem in Kapchorwa (31.0 Kms)

    iii. Kampala [Nansana] – Busunju (48.1 Kms)

    iv. Kamuli Town Roads (22.0 Kms)

    v. Iganga – Kaliro (32.0 Kms)

    vi. Mukono – Kalagi – Kayunga & Bukoloto – Njeru (95.0 Kms)

    vii. Sungira Hills Access [Nakasongola]-(1.6 Kms)


    58. Madam Speaker, today the total length of paved roads in Uganda now stands at 5,350 kilometers, compared to 987 kilometers in 1986.


    59. Madam Speaker, with respect to bridges, 9 major bridges were completed. These include Achwa, Apak, Cido, Goli, Kabaale, Leresi, Manafwa, Ndaiga, and Nyamugasani bridges. The Second Nile Bridge is substantially completed and is due for commissioning in August 2018.


    60. Madam Speaker, next financial year priorities will include:


    i. road maintenance, in order to preserve key investments already made;


    ii. Using the recently acquired road equipment for regions and districts for the maintenance of district and community murram roads;


    iii. Construction of 600km of Oil roads, and upgrading to tarmac of another 400 km of roads, and rehabilitation of 200km of existing roads and construction of 15 Bridges;


    iv. Rehabilitation of tourism roads and the development of road network in industrial parks, including Mbale and Kapeeka industrial parks.


    v. Start construction of the Sigulu Island ferry on Lake Victoria and the Bukungu-Kagwara-Kaberamaido ferries and rehabilitate the former Bukakata – Luuku ferry;


    vi. Commence feasibility studies and designs for roads and bridges for which construction will begin in 2019/20.


    61. Madam Speaker, in order to ensure that our roads infrastructure remains in good condition as already stated above, I have allocated Shs 607 billion to cater for maintenance for National, District, Urban and Community Roads.



    62. Madam Speaker, Uganda Railways Corporation took over the operation of the meter-gauge railway, following the termination of the Rift Valley Railways concession. Railway services on the Eastern Route were resumed in February 2018, in addition to reinstating the passenger rail service in the Kampala Metropolitan Area between Namanve and Kampala Stations.


    63. Madam Speaker, Government remains committed to development of the Standard Gauge Railway. 8% of the right of way for the SGR has been acquired with 228 Project Affected Persons in Tororo having been paid.


    64. Madam Speaker, next financial year additional land on theEastern route will be procured to facilitate the Standard Gauge Railway right of way. In addition, 42 Railway wagons will be rehabilitated, bad spots along Port Bell – Kampala and Kampala – Malaba line will be repaired. Marking of the railway reserve boundaries will also be undertaken.


    Air Transport

    65. Madam Speaker, the redevelopment of Entebbe International Airport has progressed well. The new cargo center is 30% complete and 20% works for the modification of the passenger terminal building is done. In addition 15% of the rehabilitation works for expansion of Apron 1 is also done.


    66. Madam Speaker, during the next financial year, the National Airline will be revived. Technical studies have been completed and aircraft will be acquired to commence regional air services.

    The revival of the National Airline will enhance Uganda’s competitiveness by reducing the cost of air transport and ease connectivity to and from Uganda. It will also support faster harnessing of opportunities in tourism, agriculture and minerals, oil and gas.


    67. Madam Speaker, I have allocated Shs 4.8 Trillion to the Works and Transport sector next financial year.


    Information and Communication Technology

    68. Madam Speaker, during the year, the Information, Communication and Technology (ICT) sub-sector registered significant progress. The cost of internet Bandwidth for Government has reduced from 300 USD per Mbps per month in 2016 to 70 USD in 2017. This translates into a 76% decrease over one year. To date 297 Government services have been automated and are online, which has improved efficiency in public service delivery, reduced human interaction and subsequently saved Government 4 Million working hours during the last year.


    69. The cost of internet bandwidth for private sector and citizens has also reduced from an average of USD 375 USD to USD 237 between 2016 and 2017. This translates into a 37% decrease. With respect to telecommunication services, the number of Internet users increased by 45% from 13 million in 2015 to 18.8 million in 2017. Active telephone subscribers are now 22.4 million and the number of Mobile money subscribers increased from 2.8 million in 2011 to 23 million in 2017. Phone penetration (or tele density) has grown by 53% in 2015 to 66.9 million 2017. Internet penetration per 100 population stood at 49% in 2017.


    70. Madam Speaker, the ICT sector outcomes in greater part are due to the following interventions:


    i. Extension of the National Backbone Infrastructure (NBI) to Fifty Three (53) more Government Ministries and Agencies bringing the total number connected to Three hundred forty two (342) sites;


    ii. Laying of almost 2,350 kms of Fiber Optic cable, and the construction of 18 Transmission Sites, in addition to a National Data Centre (NDC) and a state-of-of the-art Network Operations Centre (NOC) for services monitoring;


    iii. Construction of a 500 seater state-of-art Innovation Hub due for completion by August 2018;


    iv. Establishment of a One Area Network for telephone services under the Northern Corridor Infrastructure Project (NCIP), where all calls to and from Uganda, Kenya, Rwanda and South Sudan are charged up to US $10 Cents per minute;


    71. Madam Speaker, in Financial Year 2018/19, Government will undertake the following actions:


    i. Reserve a percentage of procurement of ICT Services for competent local innovators;


    ii. Enforce the use by all Government Ministries and Agencies of e-Procurement Platform developed under PPDA and NITA-U guidance;


    iii. Enforce the use of common ICT Services, including data sharing, e-Payments, Unified messaging, the Programme Based Budgeting System across the whole of Government in order to eradicate duplication of ICT Systems;


    iv. Extend the National Backbone Infrastructure to hard-toreach areas and unserved sub-counties in order to increase broadband penetration;


    v. Develop regional ICT innovation hubs to stimulate incubation of ICT innovations and transform them into usable products – especially those required by industries, and also use ICT Innovation hubs as business process outsourcing (BPO) centres;


    vi. Extend ICT infrastructure to the four industrial parks of Namanve, Luzira, Mukono and Iganga;


    vii. Complete restructuring of the Uganda Telecom company. 72. Madam Speaker, I have allocated Shs 149 billion for the ICT sector next financial year.



    73. Madam Speaker, there has been an improvement in access to education.95.9% of primary going children can now access schools within a 5 kilometers reach. The current primary school enrolment stands at 10.2 million pupils.


    74. Madam Speaker, youth who stop education at primary and secondary levels do not have skills that match industrial job requirements. Non-formal training programmes have been undertaken to enable acquisition of practical skills for youth without formal education. During the year 14,620 youths

    of whom 8,580 are female, have been trained in Agriculture, Construction, Manufacturing, Tourism and Hospitality skills.


    75. Madam Speaker, the Education sector has undertaken the rehabilitation of dilapidated primary schools and Installation of lightening arrestors for 140 schools in the most lightening prone districts namely:– Mubende, Ssembabule, Bushenyi, Lwengo, Bukomansimbi and Lyantonde.


    76. Madam Speaker, to improve infrastructure in higher education, civil works for teaching facilities in the following Public Universities were completed:


    i. Faculty of Business Computing at Makerere University Business School;


    ii. Refurbishment of the Dairy Value Chain at Kabanyolo;


    iii. Refurbishment of old Laboratories at Six (6) Colleges at Makerere University;


    iv. Construction of a Laboratory and Lecture Block, Library and Computer Block and the rehabilitation of existing Workshop Block at Busitema University Main Campus.


    v. Construction of a new Laboratory Block at the Busitema University Nagongera Campus;


    vi. Renovation of the Faculty of Engineering Workshops and Laboratories at Kyambogo University; and


    vii. Rehabilitation of the Laboratory for Applied Sciences and construction of a 3 storied Library at Mbarara University of Science and Technology.


    77. Madam Speaker, during the year, construction of the High Altitude Center in Kapchorwa progressed well. We continued to support Sports and Uganda successfully competed at the 2018 Common Wealth Games in the Gold Coast, Australia winning 3 Gold, 1 Silver and 2 bronze medals. I commend Uganda’s

    contingent for this stellar effort.


    78. Madam Speaker, in the next financial year, the following priorities will be implemented:-


    i. Commence, with support of the World Bank, civil works in selected primary schools and provide instructional materials and construct secondary schools in sub-counties where they do not exist;


    ii. Procure instructional materials including bilingual dictionaries, for use in teaching in local languages in Primary schools;


    iii. Operationalize through teacher provision, 100 secondary schools in 92 Local Governments in pursuit of establishing a Government Secondary School in sub counties without any;


    iv. Accredit to international standards 6 Technical Colleges and Technical Institutes at Arua, Buhimba, Mubende, Kiryandongo, Nyamitanga and Iganga; and continue civil works at Technical College Centers of Excellence at Elgon, Lira, Bushenyi and Bukalasa Agricultural College;


    v. Complete construction works at Uganda Petroleum Institute Kigumba and Uganda Technical College Kichwamba .


    vi. Procure an oil rig under Uganda Petroleum Institute Kigumba in order to enhance practical skills acquisition in the oil and gas subsector


    vii. Finalize civil works for workshops, incubation centers, teaching facilities and laboratories in 8 beneficiary universities at Kyambogo, Gulu, Busitema, Makerere, Muni, Mbarara, Makerere University Business School and Uganda Management Institute;


    viii. Advance loans to 1,000 undergraduates and 200 diploma students admitted in academic year 2018; and 2,950 undergraduate and 200 diploma continuing students under the students’ loan scheme.


    79. Madam Speaker, construction of the first phase of the establishment of Soroti University has been completed and the University will be open to students, next academic year with the August/September 2018 intake. Kabale University has also now been fully operationalized. The Busoga and Mountains of the Moon universities will also be taken on as public universities

    next financial year, together with the establishment of the Gulu University Agriculture Constituent College in Karamoja.


    80. Madam Speaker, I have allocated Shs 2.8 Trillion to the Education sector next financial year



    81. Madam Speaker, attaining a good standard of health for all Ugandans is another major priority of this Government. The following interventions were undertaken in FY2017/18:-


    i. Twenty six million Long Lasting Insecticide treated mosquito nets were distributed nationwide achieving 94% coverage. Indoor Residue Spraying was also undertaken in eleven districts of the Acholi and Lango sub-regions in Northern Uganda.


    ii. The HIV prevalence rate declined to 6% down from the prevalence of 7.3% in 2011. New HIV infections have continued to decline with a 40% decline in new infections between 2015 and 2017.


    iii. To prevent Hepatitis B, 39 districts have been covered in West Nile, Mid North, Teso and Karamoja sub regions. 11 districts of Eastern Districts of Busoga region are currently being covered;


    iv. Child survival has improved with the Infant Mortality Rate declining to 43 per 1,000 in 2016 from 54 per 1,000 live births in 2011. The Under Five Mortality Rate also reduced significantly declining from 90 per 1,000 live births to 64 per 1,000 live births over the same period;


    v. The construction, expansion, rehabilitation and equipping of Mulago National Referral Hospital is in final stages and will be completed during next

    financial year. The 320 bed Specialized Maternal and Neonatal Health Care Unit at Mulago National Referral Hospital is also expected to be completed by

    December, 2018.


    vi. The Cancer Institute has been expanded into a centre of excellence with the acquisition of advanced cancer treatment equipment including a linear accelerator.

    The Uganda Heart Institute (UHI) now has advanced cardiac management facilities to handle at least 1,000 operations per year;


    82. Madam Speaker, next financial year healthcare provision will emphasize prevention rather than cure. Interventions at household and community levels will include better nutrition, good hygiene practices and healthy lifestyles. The Community Health Extension Workers (CHEWs) program will be established to take services closer to the community, deliver house hold centered health care services through health promotions, sensitization and prioritization of disease prevention.


    83. Madam Speaker, health interventions will be placed on improving maternal and new born child health and equipping the health facilities to diagnose and treat diseases. Other priority interventions include the following:-


    i. Strengthening human resource in healthcare provision to ensure the attraction, motivation, retention of healthcare professionals. Salary enhancement will contribute towards attainment of this goal;


    ii. Scale up preventive care by undertaking immunization initiatives including Hepatitis B, Malaria control, and HIV/ AIDS prevention and treatment;


    iii. Upgrade 124 Health Centre IIs to Health Centre IIIs in 99 Local Governments, with support from the World Bank;


    iv. Commence the construction of the International Specialized Hospital of Uganda at Lubowa, whose financing arrangements have now been completed.


    v. Continue the construction of the specialized Regional Centre for Pediatric Surgery in Entebbe which is expected to be completed in the next Financial Year; and


    vi. 29 staff houses will be constructed, with the support of the Italian Government, at Health Centre IIIs in Karamoja region in the districts of Kaabong, Abim, Kotido, Moroto, Amudat, Napak and Nakapiripirit.


    84. Madam Speaker, I have allocated Shs 2.3 Trillion to the Health Sector next financial year


    Water and Sanitation

    85. Madam Speaker, increasing access to clean and safe water is also a critical objective for Government. Water access in rural areas has improved with rural water coverage now estimated at 71 % compared to 68% recorded in 2016. The sanitation coverage in both rural and urban areas has improved from 79% last year to 80 % this financial year. Interventions that have enabled these outcomes include:


    i. 120 water wells were drilled and 480 hand pumps were distributed in water stressed areas in the districts of Nakasongola, Kayunga, Kamuli, Kyankwanzi, Agago, Kaabong, Hoima, Kyegegwa, Kiruhura, Kitgum, Mubende, Pader, Wakiso, Kasese, Hoima, Budaka, Mpigi, Nwoya and Lyantonde;


    ii. 17 Water Supply and Sanitation systems were commissioned in Kashaka-Bubare, Nsiika, Nakapiripirit, Kapelebyong, Ocapa, Kyere, Buyende, Kasambira, Nyamarunda, Gombe- Kyabaddaza, Kabembe-Kalagi-Nagalama, Namulonge- Kiwenda, Kikyusa;


    iii. Constructed water works at Kapeeka, and the expansion of Soroti, Bushenyi and Masindi water systems.


    86. Madam Speaker, Government’s objective for the FY 2018/19 is to increase access to safe water in rural areas from 71% today to 79%. Urban water access is targeted to increase to 100%. The target for sanitation is to reach 86% next year. In order to achieve this, interventions include:


    i. Continued construction of 9 Gravity Flow Schemes in Bukedea, Orom, Rwebisengo-Kanara, Bukwo, Nyabuhikye, Lukalu- Kabasanda, Lirima, Shuuku-Masyoro and Nyarwodho II;


    ii. Commencement of construction works for the Katosi Water Treatment Plant and Katosi-Kampala Transmission Mains;


    iii. Completion of construction of 27 piped water systems in various centers of Namwiwa, Bulegeni, Bulopa, Kayunga-Busaana, Busiika, Bamunanika, Kiwoko, Butalangu, Kakunyu, Kiyindi, Kikandwa, Kasambya, Butenga-Kawoko, Kyankwanzi, Butemba, Kagadi, Lwemiyaga, Karago I, Moyo, Elegu/Bibia,

    Padibe,Lacekot, Paimol and Apala,Patiko, Cwero, Olilim and Abia, Rukungiri, Katwe-Kabatoro, Koboko, Pallisa, Kumi- Ngora-Nyero and rehabilitation of Ayala Water supply system;


    iv. Continued construction of 26 town water supply schemes in Idudi, Acowa, Binyiny, Bulangira, Karago II, Kibugu, Lwebitakuli, and Igorora, Moyo, Elegu/Bibia, Padibe, Odramacaku, Pakele, Dzaipi, Atiak, Apala, Olilim, Patiko,

    Cwero and Abia to 75% completion level;


    v. Construction of 24 sewerage and sanitation facilities (public and household) in the towns of Namwiwa, Bulopa, Kiboga and Nakasongola Kibugu, Igorora, and Karago. Lwebitakuli, Lwemiyaga, and the Kanungu Cluster;


    vi. Complete construction of Kinawataka Sewer network. Nakivubo Waste Water Treatment Plant, Kinawataka Pretreatment and Pumping Station.


    vii. Continue the upgrade of Ggaba Water Treatment Complex to increase capacity from 180,000 cubic meters to 230,000 cubic meters per day.


    87. Madam Speaker, other major interventions under the water and environment sector will focus on protection of the environment and ecological systems across the country through protection of water catchment areas, forestry restoration, demarcation and protection of wetlands, lake shores and river banks, strengthening weather and climate information systems and integration of climate change mitigation measures in all Government programmes and project.


    88. Madam Speaker, I have allocated Shs 1.3 Trillion to the Water and Sanitation sector next financial year.


    Social Empowerment

    89. Madam Speaker, in order to empower key social groups, Government has implemented affirmative programmes for the Youth, Women and Elderly. The Youth Livelihood Programme has funded over 14,200 projects benefiting 165,500 youth of which 45% are females. The projects funded are majorly in

    the Agriculture (38%), Trade (29%), and Services (17%). The Uganda Women Entrepreneurship Fund has financed over 6,000 projects benefitting 76,000 women. 42% of the projects are in wholesale and retail trade and 33% in agriculture.


    90. Madam Speaker, in order to improve the livelihoods of the senior citizens, the Social Assistance Grant for Empowerment (SAGE) was established to support the elderly. The programme is currently being implemented in 47 districts. Over 157,000 senior citizens are benefitting. The elderly on the programme spend most of their grants on food, health care, and education

    with significant improvements in their nutritional status, health, and well-being of recipients and their household members.


    91. Madam Speaker, I have provided Shs. 66 billion next Financial Year for the Youth Livelihood Programme to fund over 5,000 youth enterprises and benefitting 61,000 youth. I have also provided Shs. 39 billion to support about 2,700 women enterprises targeting 35,000 women.


    Improving Governance and Service Delivery

    92. Madam Speaker, the Justice System is central in the promotion of human rights, the fight against corruption and improving business environment. During the year, case backlog was reduced from 24% to 19% equivalent to 29,207 cases. The construction of justice centers, which provide a one stop center for operations of the Uganda Police, Directorate for Public Prosecutions and the Judicairy, was completed in Mitooma, Kyenjojo and Lamwo. In addition, the Kitalya Medium Security Prison is 62% complete.


    93. Madam Speaker, in the next year, priorities to increase access to Justice include the automation of Court Administration System, construction of 4 new justice centers in Amudat, Kyegegwa, Butambala, Namaiyingo Districts and the regional Justice Law and Order Sector House in Fort Portal. Construction of the Justice Law and Order House at Naguru will also be fasttracked.


    94. In addition, the Safe City project involving installation of Close Circuit Television (CCTVs) will be implemented to improve security. A Regional Forensic Referral Center (RFRCs), the Crime Record Management System (CRMS), and enhanced training of investigators will also be implemented to improve the capacity of the Uganda Police to deal with crime.


    95. Madam Speaker, with respect to citizenship and immigration, over 23 million Ugandans have been registered, with 17 million receiving their National Identity Cards. Next financial year, e-Passports and the automation of Work Permits, Visas and Passes will be implemented to improve the quality of our immigration services.


    96. Madam Speaker, Government agencies will be rationalized to avoid duplication and overlap of mandates to increase effectiveness. To further curb corruption, sanctions including dismissal and prosecution of officials who are engaged in corrupt practices will be implemented. I have directed the Secretaryto the Treasury to continue demanding that Accounting Officers provide accountability, failure of which non-compliant Accounting Officers will have their appointments revoked, in accordance with the Public Finance Management Act 2015.


    97. Madam Speaker, Salary and Pension reforms that have been implemented over the last three years have yielded tremendous results. The monthly payment of salaries and pensions has been streamlined. Almost all pension and gratuity arrears have been cleared apart for those of the military and ex-service men. However, there are some indisciplined Accounting Officers who continue to recruit staff without Budget funds, or who divert funds meant to pay salaries, wages, pensions and gratuity arrears. I have directed the Secretary to the Treasury to ruthlessly deal with these Accounting Officers.


    98. Madam Speaker, implementation of Government projects continues to be undermined by lack of readiness by Ministries, Agencies and Local Governments. Delays in procurements, late acquisition of right of way and poor contract management are major causes of low absorption of funds. In order to improve management of public projects next financial year, all on-going projects will be reviewed and those which are not consistent with the National Development Plan will be removed from the Public Investment Plan. The approval of projects will be pegged to those that are well appraised and ready for implementation before they are allocated resources in the Budget. Project monitoring will also be strengthened to ensure timely execution

    and value for money.


    99. Madam Speaker, to reduce the cost of Public Administration particularly on rent, construction of the Dar es Salaam Chancery was completed. Construction of the Uganda Embassy in Bujumbura also commenced. The Uganda Revenue Authority offices are nearing completion.


    100. Madam Speaker, next financial year, construction of Parliament will continue and civil works for the Inspectorate of Government, the Public Procurement and Disposal of Assets Authority, Uganda Road Fund headquarters and the Government Office Campus at Bwebajja, will commence.


    101. Madam Speaker, creation of new administrative units such as new Agencies, Public Universities, Local Government Structures including Sub-counties and Town Councils continueto strain meager public resources. Government will review this Policy with the view of halting creation of new administrative units to allow funding for priority programs in Infrastructure

    development and service delivery.


    102. Madam Speaker, over the years, the level of financing of Local Governments to deliver basic services has been considered inadequate and inequitable. To mitigate against this, Inter-Government Fiscal Transfers will be reformed to enhance adequacy and equity of resources sent to Local Governments.

    Next financial year, the Education and Health sectors will be piloted in this reform. Furthermore, a new Local Government Assessment System will be implemented to review performance and identify areas for improvement.


    103. Madam Speaker, direct transfer to Education and Health institutions, Sub-counties, Town Councils and Municipal divisions is being implemented. This removes delays in receipt of funds by implementing units, and minimizes diversion of funds. However, some Local Government Accounting Officers

    with grants that are not under the direct transfer policy do not transfer funds to the cost centers in a timely manner. Next financial year, disciplinary action will be taken against those Accounting Officers who do not immediately transfer funds to cost centers.


    104. Madam Speaker, in order to improve the focus on results, Program Based Budgeting was instituted and successfully rolled out during the year to all Ministries, Agencies and Local Governments. Program Based Budgeting directly links results to outputs and related budgets, in order to provide accountability for resources provided.


    V. Medium Term Revenue and Expenditure Framework

    Domestic Revenue Mobilization

    105. Madam Speaker, Uganda’s tax revenue effort at 14% of GDP remains low and inadequate to finance our development needs.

    Accordingly, the Domestic Revenue Mobilization strategy will address policy, technical and administrative issues in enhancing tax and non-tax revenue collection. The strategy will be completed in September 2018 to guide implementation in Financial year 2019/20


    Revenue Performance

    106. Madam Speaker, total tax and non-tax revenue is estimated to amount to Shs 14.4 Trillion this financial year. Over the past decade, tax revenue has been growing at an average rate of 17% per annum, raising from Shs 3.1 Trillion in financial year 2007/08.


    107. Madam Speaker, Non Tax Revenue collections for this year is estimated at Shs 430.4 billion against the target of Shs 380 billion. This performance is attributed to efficiency in NTR collections as a result of the decision by Government that all Non-Tax revenues be collected by Uganda Revenue Authority effective 1st July 2017. The decision enhanced transparency in

    NTR collections as well as ease of monitoring.


    Revenue Outlook

    108. Madam Speaker, Parliament reviewed and approved tax measures in accordance with Article 152 of the constitution.

    Among these include technical amendments aimed at bringing more clarity to the laws to minimize unnecessary disputes between taxpayers and the authority, dealing with issues of tax avoidance, in addition to modest adjustments in tax rates meant to generate revenue and also keeping some taxes in consonance with inflation.


    109. Consequently, total domestic revenue is projected to be 16.4 Trillion in financial year 2018/19, an increase of Shs 1.9 Trillion over this financial year. This will raise the ratio of revenue to GDP from 14.2% this year to 14.6%.


    Investment Incentives

    110. Madam Speaker, Government has introduced incentives to promote both domestic and foreign investment. These incentives focus on industrialization with the objective of job creation, value addition to local raw materials, export promotion, and promotion of tourism.


    111. Among others, these include incentives for investments in the development of industrial parks or free zones, establishment of new factories, and development of hotels and tourist facilities.

    Details can be found in the tax bills.


    Tax Administration

    112. Madam Speaker, Government has been implementing a Policy on tax inclusive budgeting for both recurrent and development expenditures. However, some Accounting Officers do not remit taxes to Uganda Revenue Authority (URA) after deducting PAYE or other withholding taxes. This practice is illegal.

    Therefore, any Government Institution which does not remit taxes to Uganda Revenue Authority will be treated as any other tax defaulter and URA is hereby authorized to deal with all such defaulters. To reiterate, Accounting Officers will be held personally responsible for tax default in accordance with the law.


    113. Madam Speaker, one of the major challenges undermining our tax effort is tax evasion. For example, about 30% of eligible VAT is not collected, translating into a loss of about 4% of tax to GDP. VAT evasion involves the fraudulent use of non-existent transactions claiming input tax against purchases and expenses that were not incurred, and issuance of invoices for business transactions for which there is no genuine supply/movement of goods and services. So far, URA has recovered Shs. 605 billion from companies evading tax and another 2,100 companies are undergoing comprehensive review to determine the liabilities not yet paid. Other measures include cancellation of the tax registration of taxpayers involved in VAT fraud, and revocation of all Tax Clearance Certificates issued to the taxpayers involved including blacklisting them for PPDA purposes.


    114. Madam Speaker, to strengthen tax administration, URA will continue to implement the following measures:-

    i. Strengthen business intelligence and risk management functions to detect non-compliance;

    ii. Expand the revenue management system to other revenue geographical areas beyond Kampala;

    iii. Enhance tax arrears management;

    iv. Increase tax intelligence operations to curb smuggling;

    v. Deployment of container scanners at the major entry stations to facilitate faster clearance of goods;

    vi. Increase of risk based post clearance audits targeting specific sectors;


    vii. Implement strict procedures for collection of rental tax;

    viii. Implement use of digital tax stamps to enhance compliance in payment of duties on excisable goods.


    Tax Appeals Tribunal

    115. Madam Speeker, the Tax Appeals Tribunal is a quasi- judicial body charged with dispensing justice in the field of tax. The Act was amended to provide for mediation as a mechanism for resolution of tax disputes. The Tribunal has also been empowered to award damages and interest and to allow the Registrar to handle provisional applications during the conduct

    of legal cases.


    Resource Envelope

    116. Madam Speaker, the resource envelope for Financial Year 2018/19 is as follows:-:

    i. Domestic Revenue amounting to Shs 16,358.8 Billion of which Shs 15,938.8 Billion will be collected by URA as tax revenue and Shs 420 Billion as Non Tax Revenue;

    ii. Domestic borrowing amount to Shs 1,783.4 Billion;

    iii. Budget Support amounting to Shs 289 Billion;

    iv. External financing for projects amounting to Shs. 7,734.5 Billion of which Shs 6,148.9 Billion is in loans, and Shs 1,585.6 Billion is grants;

    v. Appropriation in Aid, collected by Government departments amounting to Shs 1,063.5 Billion; and

    vi. Domestic Debt Re-financing will amount to Shs. 5,271.5 Billion.

    117. Madam Speaker, the total resource envelope has been allocated to budget expenditure and amounts to Shs. 32,702.8 Billion.


    VI. Conclusion

    118. Madam Speaker, the NRM Government’s bold steps taken to invest in security and infrastructure development have set the stage for faster and sustained economic growth in Uganda. The Financial Year 2018/19 Budget goes further to support areas that will deliver inclusive growth especially in Agriculture and its value chain, as this is the anchor for our quest for


    119. Madam Speaker, reorienting existing Agriculture sector programmes will spur the much needed transformation.

    Adapting new technologies, reducing the dependence on rain fed agriculture by using solar powered pumps for irrigation will trigger all-year round production. This will enable households to improve production and productivity. As a consequence, incomes will rise, new jobs will be created thus leading to sustained growth and development.

    120. I implore the country’s leadership at all levels to mobilize the population to seize the opportunity to meaningfully engage in production for their improved welfare.


    121. Madam Speaker, I beg to submit.






    Inside State House Meeting Where Rujoki’s URA Men Were Accused By Female Trader Before M7 Of Touching Their Breasts And Nyash  During Tax Collection…



    President Museveni (L) and URA Commissioner General Musinguzi Rujoki (R)

    President Yoweri Kaguta Museveni was forced to direct Special Forces Command (SFC) detectives to with immediate effect kickoff investigations and report to him their findings concerning allegations that a number of male tax collectors sent by Uganda Revenue Authority Commissioner General John Musinguzi Rujoki sexually harass women during the exercise.

    Last week, Rujoki was accompanied by some of his staff who are enforcing the exercise of collecting tax from the city center to the State House to meet the president over the recent traders’ strike.

    President Museveni summoned the meeting to listen to both the traders and URA over the enforcement of the Electronic Fiscal Receipting and Invoicing System (EFRIS) and tempers were very high from all sides.

    Security in State House was on alert because of the sharp misunderstanding between traders, especially from those behind Dr. Thadeus Musoke Nagenda’s Kampala Capital Traders Association (KACITA) and David Kabanda’s Federation of Uganda Traders Association (FUTA).

    Both Kabanda and Musoke were fighting to make sure that their people are accredited to attend the meeting. The total number who took Covid-19 test were more than 200 and they all traveled to Entebbe State House to meet the president.

    By 10am, traders pitched camp at State House Entebbe gate prepared to give moral supporter to their respective leaders as they were arguing out their grievances against Rujoki’s URA before the President.

    However, they were surprised when State House security informed them that it will be only their leaders who will be allowed to enter.

    They tried to explain to the SFC Commandos how Kampala Senior Minister Hajjat Minsa Kabanda and her State Minister Joseph Christopher Kabuye Kyofatogabye assured them that they wereall going to meet Museveni and the only condition was to take Covid-19 test.

    “Many of us tried to make phone calls to minister Kabuye but he was not picking and Kabanda told us that she was still engaged with the President in Kitebi and she was not in position to talk to us, after that, she hung up,” one of the traders told Grapevine.

    Only 25 leaders were allowed to enter State House and others decided to camp in one of the compounds near State House waiting for the President. When he entered State House from Kitebi, he just waved at them.

    The meeting started by 10pm and a number of ministers whoincluded: Francis Mwebesa the senior trade minister, his deputy David Bahati, Evelyn Anite the state minister for finance in charge of investment, Kampala Minister Minsa Kabanda and other government officials.

    The traders were allowed first to submit their grievances against URA before the big man. However, KACITA suffered a setback when President Museveni wondered what they wanted from him because he had just met them a few days back and asked them to talk to the traders not to strike.

    Before the President finished his statement, Kabanda and his team clapped their hands in surprise wondering why Musoke and his team met the President secretly without informing them. Kabanda has his team immediately started accusing Musoke’s team of betraying the traders.

    The President then gave Musoke and Isa Ssekito the KACITA spokesperson the green light to continue with their submission.

    Meanwhile, Kabanda’s people were panicking fearing that their man (Kabanda) might fail to submit properly their issues before the president because their issues were in writing (and he struggles with reading documents) and he was supposed to follow the document since the President also had a copy.

    “Kabanda shocked all of us, we don’t where he got the confidence from because he was on spot and was even given a standing ovation,” a source who attended the meeting said.

    However, before Rujoki was given the opportunity to respond to the complaints made against him and his team, a one Doreen Nakirya was given a chance to also raise her complaint and the entire meeting was shocked when she reported to the President that Rujoki’s men in the field sexually harass them.

    One of the businessmen who attended the meeting told theGrapevine that Museveni was shocked, to the extent that when Nakirya talked about URA men sexually harassing female Traders, the President, who was writing every submission paused.

    He asked her whether she knew the names of the men who sexually harassed them because the NRM government does not believe and associate with men who don’t respect women.

    Nakirya told the president that Rujoki’s men touch and feel women trader’s bums, breasts and make sexual signs after waylaying them in their shops and sometimes their children and workers see them.

    While the president wasasking Rujoki to respond to the allegations, Nakirya pointed out a one Godfrey (who was also in the meeting) and a colleague.

    Immediately, the president directed SFC detectives to take both of them to record statements so that investigations can kick off.

    The president was also told that URA men have a vice of asking for bribes from them so as not to close their shops after accusing them of delaying to pay their taxes to URA.

    In his defense, Rujoki informed the President that URA on several occasions has always interacted with the business community and a number of trainings and workshops concerning EFRIS were carried out.

    One of the businessmen confirmed to theGrapevine that it is true URA has always conducted meetings and trainings with traders.

    The President was briefed that businessmen and women who are complaining have been hiding the correct record of sales they make every day.

    He gave examples with evidence that traders have two books, one which is submitted to URA and another one in which they record the actual sales which they don’t submit to URA.

    Fred Bamwine the Commissioner in the Office of the Presidency confirmed that nothing is going to change in the way URA collects taxes especially on EFRIS even if Museveni meets traders again in May at Kololo strip.


    By Sengooba Alirabaki


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    How City Businessman Sentongo Took First Win In The Shs10bn Legal War Against DTB Bank…



    City businessman Haruna Sentongo the proprietor of Haruna Enterprises Uganda Limited is smiling from ear to ear after bagging the first win in the Shs10bn legal fight against Diamond Trust Bank (DTB) Uganda and Kenya branches respectively.

    Justice John Oscar Kihika of the Court of Appeal which also doubles as the Constitutional Court has issued a temporary injunction restraining the bank’s  agents, representatives, nominees assignees and/or successors in title from selling, transferring, alienating, evicting, dealing with and or in any way interfering with Sentongo’s interest and possession of the properties comprised in Block 12 Plots 538, 826 and 898 at Mengo until the determination of appeal against the the Commercial Division of the High Court Judgment.

    Sentongo through his lawyers lead by Commercial law giant Derrick Bazekuketta filed an application to the Court of Appeal alleging that his multibillion property is under a serious threat as banks have sent brokers to inspect the property with the suitable buyers claiming that it was available for sale on orders of the court.

    In his affidavit, guided by Bazekuketta, Sentongo pleaded to Court to stop the selling of his property insisting that his appeal is meritorious and he has higher chances of winning the appeal against the bank.

    He explained to the presiding justice at the Commercial Division of the High Court erred in law and in fact when he dismissed his entire case on technicality because he failed to honour his directive to fiIe trial bundle within the timelines he directed noting that to his surprise even the bank didn’t file the said trial bundle.

    He insisted that his failure was caused by the grant of an order for leave to amend his plaint and the subsequent pleadings.

    However, the bank through their lawyers led by Stephen Zimula protested the application relying on the affidavit of Emajeit Mbabazi. Zimula raised two preliminary points of law insisting that the application is incomplete before the Court of Appeal.

    In his submissions, Zimula told Court that the said application was supposed to be first filed in the High Court before proceeding to the Court of Appeal insisting that the Order issued by the High Court is a negative order that is not capable of being stayed.

    Counsel informed Court that the rule against issuing a stay order in respect to a negative order cannot be circumvented merely by terming the order sought as an injunction.

    In reply, armed with a number of authorities, Bazekuketta told Court that in an application for temporary injunction, it is not mandatory for the Applicant to first file the Application at the High Court noting that laws and rules allow him to rush to the Appellate Court directly.

    He also argued that his application before the said Court is one seeking for a temporary injunctive order and the same is validly before the court.

    He explained to the Court that his application is for a temporary injunction and not an order of stay of execution of a negative order.

    He pleaded with counsel Zimula to carefully revise his law books so that they help him not to confuse an application for stay of execution with an application for a temporary injunction.

    Justice Kihika agreed with counsel Bazekekutte’s submissions noting that it would not be possible for Sentongo to file an application for a temporary injunction in the High Court in the absence of a pending suit explaining that the only option available to him was to file the application before the Court of Appeal.

    “I therefore found that this application for a temporary injunction is properly before this court. The first preliminary point of law is thus over ruled,” the judge stated in his ruling.

    He further disagreed with counsel Zimula’s argument that Sentongo’s application is seeking a stay of a negative order of dismissal which is not capable of being stayed explaining that it is clear that the application seeks an order for a temporary injunction against the bank restraining its agents and other people working in the bank’s interest from interfering with his interest and possession of his properties comprised in Block 12 Plots 538, 826 and 898 at Mengo until the termination of the appeal.

    Justice Kihika explained that a temporary injunction is intended to maintain the status quo of things pending the determination by court of some serious cause pending before it.

    He noted that the granting of a temporary injunction is an exercise of judicial discretion and the purpose of granting it is to preserve the matters in the status quo until the question is investigated in the main suit and disposed of.

    He cited the conditions for the grant of a temporary injunction which include; the applicant must show a prima facie case with a probability of success and that such injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury which would not adequately be compensated by an award of damages.

    He further stated that a temporary injunction can be issued and if Court is in doubt, it would decide an application on the balance of convenience. He added that a temporary injunction is granted so as to prevent the ends of justice from being defeated.

    On the issue of likelihood of success, Justice Kihika stated that Sentongo stated in his affidavit in support of his application that the appeal is meritorious, raises serious questions for determination of the Court of Appeal and has a high likelihood of success.

    He further agreed with Sentongo who stated that on 30th March, 2023, his matter came up for hearing and timelines were issued by the trial judge of the High Court on when to file witness statements, trial bundles and a joint scheduling memorandum.

    He added that On 14th April, Sentongo filed his witness statement and on 18th he applied for leave to amend the plaint, which leave was granted.

    Following the grant of his application, an amended plaint was filed on 21st June 2023 and in November, the bank filed an application seeking for further and better particulars.

    On 29th November, 2023, the trial Judge dismissed the suit under Order 1 Rule 4 of the Civil Procedure Rules.

    In conclusion, Justice Kihika therefore considered that Sentongo has convinced Court that he has a prima facie case pending determination of his appeal before the Court of Appeal.

    On the issue of whether Sentongo will suffer irreparable damage or that the appeal will be rendered nugatory when the temporary order is granted, Justice Kihika base on Sentongo’s affidavit where he stated that he acquired the suit land in 2014 and it took him over 5 years to develop the same with a market he named ‘Nakayiza’ after his mother.

    He added that he has a sentimental attachment on the property that cannot be compensated for in damages if the property is sold. The property in the instant case is a commercial building with a market whose rent proceeds can be ascertained.

    “In my understanding, the applicant has to show that the damage bound to be suffered is such that it cannot be undone. It is therefore my considered view that the Applicant will suffer irreparable damage if this application is not granted,” the justice ruled.

    On the issue of balance of convenience, Justice Kihika explained that it is determined to lie more on the one who will suffer more if the bank is not restrained in the activities complained of in the said case insisting that the balance of convenience favors Sentongo if the application is not granted.

    He based on the evidence that Sentongo is in possession of the suit property which is a commercial building with various tenants carrying out business and the sale of the property will be to the detriment of him. That is why he wants to maintain the status quo until the determination of the appeal pending before the Court of Appeal.

    Court records seen by the mighty Grapevine indicate that in 2015, Sentongo approached the bank for a financial facility for completion of the commercial blocks for Segawa Market which was to be rented out to tenants to derive rental income.

    Both parties executed a facility in a letter dated 22nd February, 2016, for a Loan of Shs5bn and it was agreed that the facility would only be serviced through rent collections from the market if the bank funded the development.

    Sentongo claims that the bank breached the facility contract by failing to disburse the agreed sums of monies.

    Court documents show that Sentongo told the Commercial Division of the High Court that the bank would purport to credit his bank account, and synonymously liquidate the loan, paying itself back immediately with the sums credited, and the sums it would repay itself were always reflected as “Loan amounts recovered”.

    The bank on the other hand, according to court documents claimed that between February to October 2016, Sentongo was granted several loan facilities and at his request, they were consolidated into one term loan with a single monthly instalment amortized for a period of five years.

    He however, failed to meet his loan repayment obligations consequent upon which the bank issued him two notices of default.

    The bank further claimed that when they started the process of recovering their sum of Shs10bn, Sentongo decided to institute a lawsuit and was defeated at the Commercial Division of the High Court.


    By Sengooba Alirabaki


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    Equity Bank Shs6.5bn Fraud Case Deepens As More Suspects Are Charged, Remanded To Prison…



    Equity Bank fraud suspects Mukwaya, Mugumya and Kato appearing in court

    Three more suspects from Equity bank multimillion fraud case have been arraigned before the Magistrates Court of the Anti-corruption Division on charges of Conspiracy to defraud and remanded to Luzira prison.

    The accused persons are; Godfrey Mukwaya and Robert Mugumya, all former employees of Airtel Uganda and Fred Kato a former head of Small and Medium Enterprises at Equity Bank.

    Prosecution alleges that Mukwaya, a former sales manager at Airtel Uganda used different people to open up bank accounts through which the bank was defrauded of more than Shs10bn.

    State further alleges that Mugumya is linked to 179 fictitious companies that were created to defraud Equity bank and he used different persons to obtain more than Shs35 billion.

    The presiding Magistrate Abert Asiimwe did not allow the accused persons to plead to the charges reasoning that they are joined on the case file involving money laundering which is triable by the High Court.

    “While this court has powers to handle the case of conspiracy, this one is emanating from money laundering. I advise that you will plead to the charges in the High Court which has powers to entertain all the cases,” Asiimwe said.

    The three suspects charged brings the charged number to eight.

    On March 20, 2024, five people among them employees of Equity Bank were charged over accusations of money laundering in regard to disbursement of Shs62bn of unsecured loans to unqualified persons.

    The first suspects were arraigned before the Anti-corruption Magistrates Court on charges of obtaining credit by false pretense, money laundering and conspiracy to defraud.

    The remanded suspects are; the head of Agency Banking at Equity Bank Julius Musiime, Erina Nabisubi a relationship manager for telecom, Fred Semwogerere (Banker), Tumuhimbise Crescent Tibarwesereka (relationship officer) and Wycliff Asiimwe a distribution and marketing consultant with a microfinance facility.

    State alleges that between the 2021 and 2024 at Equity Bank in Kampala City, Nabisubi being a person employed as a relationship manager in charge of Telecom incurred a debt of Shs6.55bn from Equity bank falsely representing that the loans were being applied for by Najjemba Gladys who she fronted as having fulfilled the bank requirements to access the loans whereas not.

    State added that Nabisubi also incurred a debt of Shs300m from Equity Bank falsely representing that the loans were being applied for by Nagawa Latiffa who she fronted as having fulfilled the bank requirements to access the loans whereas not.

    It is alleged that between 2021 and 2024 at Equity Bank headquarters situated at Church House in Kampala, Nabisubi intentionally impeded the establishment of the true ownership of Shs6.5bn which she fraudulently obtained from Equity Bank as loan through account number 1032100370335 in the name of Najjemba Gladys purporting that the said funds were applied for by Najjemba Gladys as a loan whereas not knowing that the said funds were a proceed of crime.

    State further alleges that Musiime intentionally concealed the true ownership of Shs18 million which he received as gratification from Mutuuza Stella for having fraudulently processed a loan of Shs700m from Equity Bank by requiring her to deposit the said gratification on account number 1013101211316 in the name of Gilbert Rwaiheru Kiiza knowing that the said deposits were a proceed of crime.

    According to the charge sheet, in the year 2021 and 2024 at different places in Kampala and Wakiso districts; Musiime, Nabisubi, Ssemwogerere, Tumuhimbise , Asiimwe, Kato, Mugumya and Mukwaya conspired together to defraud Equity Bank of Shs62bn by fraudulently causing the disbursement of unsecured loans to unqualified people.


    By Grapevine Reporter


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