THE REPUBLIC OF UGANDA
SEMI-ANNUAL BUDGET
PERFORMANCE REPORT
FY 2001/02
JULY-DECEMBER 2001
MINISTRY OF FINANCE, PLANNING AND
E CONOMIC DEVELOPMENT
APRIL 2002
TABLE OF CONTENTS
1.
2.
3.
Introduction........................................................................................................... 3
Summary of Fiscal Performance............................................................................. 4
Resource Performance ........................................................................................... 8
3.1 URA Revenue Performance.................................................................................. 8
3.2 Non-URA Revenues and Loan Repayments......................................................... 9
3.3 Budget Support Loans and Grants...................................................................... 12
4. Budget Release Performance................................................................................ 14
4.1 Overall Budget Release Performance .................................................................. 14
4.2 Release Performance by Expenditure Category ................................................... 14
4.3 Release Performance by Centre, Local Government and Statutory Vote............. 15
4.4 PAF Performance............................................................................................... 16
4.5 Arrears................................................................................................................ 17
5. Performance by Sector .......................................................................................... 18
5.1 Security............................................................................................................... 20
5.2 Roads and Works............................................................................................... 20
5.3 Agriculture.......................................................................................................... 20
5.4 Education........................................................................................................... 20
5.5 Health................................................................................................................. 21
5.6 Water.................................................................................................................. 21
5.7 Justice, Law and Order ....................................................................................... 22
5.8 Accountability.................................................................................................... 22
5.9 Economic Functions and Social Services............................................................ 22
5.10 Public Administration....................................................................................... 23
6. Fiscal Decentralisation.......................................................................................... 24
7. Conclusion ........................................................................................................... 24
Annexes
A1: MTEF Performance during the first half of FY 2001/02
This Report is available at http://www.finance.go.ug
TABLE OF ACRONYMS AND ABBREVIATIONS
ADB
BN
EF & SS
EU
FY
GDP
GoU
HIPC
JLO
LGDP
MTEF
NAADS
NPA
NPART
PAF
PAYE
PMA
PRSC
SHS
UDB
UEB
URA
ToA
VAT
African Development Bank
Billion
Economic Functions and Social Services
European Union
Financial Year
Gross Domestic Product
Government of Uganda
Highly Indebted Poor Country
Justice, Law and Order
Local Government Development Programme
Medium Term Expenditure Framework
National Agriculture Advisory Service
National Planning Authority
Non Performing Asset Recovery Trust
Poverty Action Fund
Pay-As-You-Earn
Plan for the Modernisation of Agriculture
Poverty Reduction Support Credit
Shillings
Uganda Development Bank
Uganda Electricity Board
Uganda Revenue Authority
Treasury Office of Accounts
Value Added Tax
2
1. INTRODUCTION
This Report is the first semi-annual budget performance report published by the
Ministry of Finance, Planning and Economic Development. Its publication is part of the
Ministry’s activities to enhance the transparency of budget execution, which started with
the publication of the annual Budget Performance Report for FY 1999/2000.
The Report analyses budget performance during the first six months of the current
financial year (July to December 2001), taking into consideration both macroeconomic
factors (such as the performance of domestic resources and donor budget support) and
sectoral issues which have affected budget releases.
The Report is structured as follows:
- Section 2 analyses overall fiscal performance during the first half of the year,
examining the performance of revenues, expenditures and of the financing of
the budget deficit;
- Section 3 considers the performance of resources in more detail, analysing
the performance of Uganda Revenue Authority (URA) and Non-URA
revenues, and of donor budget support disbursements;
- Section 4 analyses the performance of budget releases at an aggregate level,
for the main categories of the government’s budget (i.e. wage, non-wage
recurrent and development expenditures; transfers to districts; Poverty
Action Fund (PAF) expenditures);
- Section 5 looks at the budget release performance for each sector in the
Medium Term Expenditure Framework (MTEF)1; and
- Section 6 concludes the Report.
This section analyses the financial performance of each sector, in terms of budget releases. It does not
provide an analysis of physical performance, in terms of output, which will be reported on at the end of
the FY, in the Annual Budget Performance Report.
1
3
2. SUMMARY OF FISCAL PERFORMANCE
This section of the report provides an overview of fiscal performance during the first
half of the year from a macroeconomic perspective. Table 2.1 describes fiscal operations,
comparing the annual budget estimates and the fiscal program for the first six months of
the year to the outturns.
As Table 2.1 shows, during the first half of 2001/02, both URA revenues and grants
were below the programmed levels. Expenditure outturns (in terms of cheques issued
and transfers to districts) were also below the program. In spite of this reduction in
expenditures, the overall fiscal balance shows a larger deficit than under the fiscal
program (Shs 108bn as opposed to Shs 78bn), mainly as a result of shortfalls in budget
support grants.
As the table indicates, total domestic resources performed close to 100%. However, both
URA revenues and non-tax collections by ministries under-performed relative to the
fiscal program. The shortfalls in tax revenues were experienced on all revenue heads with
the exception of income tax (see Section 3.1 below). Non-tax revenues collections by
government ministries and other departments continued to under-perform, by about
23% on aggregate. On the other hand other non-URA revenues exceeded the
programmed levels on account of dividend receipts from various agencies (especially the
Bank of Uganda). Section 3.2 provides more detail on the performance of non-tax
revenues.
The overall under-performance in outturn expenditures (which amounts to a Shs 72bn
shortfall in MTEF spending) can be attributed to two main factors: the need to reduce
expenditures to compensate for the URA revenues shortfall; and the presence of lags in
processing expenditures.2 Overall budget releases amounted Shs 906bn during the first
half of the year (see Section 4.1 below), which constitutes a Shs 28bn shortfall relative to
the program. Outturn budget expenditures were however at Shs 862bn (as Table 2.1
indicates), implying that the lag in the processing of expenditures accounts for 61% of
the overall under-performance in spending (i.e. Shs 44bn of the Shs 72bn shortfall).
A third factor contributing to this lower than programmed level of expenditures is the Shs 8bn savings
realised on interest payments (see Table 2.1).
2
4
TABLE 2.1: OVERALL FISCAL OPERATIONS – FIRST HALF OF FY 2001/02 (SHS BN.)
2001/02
2001/02
2001/02
2001/02
Annual
First Half (H1) First Half (H1) First Half (H1)
Approved
Program
Outturn
Performance
Budget
Total Revenue and Grants
Recurrent revenue
URA
Non-URA
Ministries
Other
Grants
Budget support
Project
2,185.1
1,299.4
1,258.7
40.7
21.7
19.0
885.7
494.7
391.0
1,148.7
624.0
610.2
13.8
10.8
3.0
524.7
339.1
185.6
1,047.2
619.6
589.6
30.0
7.3
22.8
427.6
247.7
179.9
91.2%
99.3%
96.6%
217.5%
67.3%
758.3%
81.5%
73.0%
96.9%
Expenditure and Lending 1/
Recurrent Expenditures
Wages & Salaries
Defence
PAF
Other
Interest Payments
Domestic
External
Non Wage
Defence
PAF
Statutory
Transfers to URA
Other (Ministries)
Other (Districts)
Development Expenditures
Externally Financed projects 2/
Domestic 2/
PAF
Net Lending & Investment
Lending and Investment
Repayments
2,525.9
1,403.2
545.7
118.3
197.0
230.4
155.1
92.9
62.2
702.4
82.1
157.7
101.2
40.8
261.3
59.5
1,150.5
651.7
498.8
270.0
(27.8)
6.9
(34.7)
1,226.5
692.0
263.7
59.1
95.1
109.5
83.3
53.1
30.2
345.0
41.1
77.9
53.6
20.4
118.5
33.6
543.0
309.2
233.8
130.5
(8.5)
3.5
(11.9)
1,155.7
664.6
261.8
59.6
98.2
104.0
75.1
48.2
26.9
327.6
40.7
66.0
54.0
20.4
116.8
29.8
491.0
299.8
191.2
121.5
0.2
1.5
(1.3)
94.2%
96.0%
99.3%
100.9%
103.3%
95.0%
90.2%
90.8%
89.1%
95.0%
99.2%
84.7%
100.7%
100.0%
98.6%
88.6%
90.4%
97.0%
81.8%
93.1%
-2.4%
43.5%
10.9%
(340.8)
(1,226.5)
10,472.0
-3.3%
-11.7%
(77.9)
(602.6)
(108.5)
(536.1)
139.4%
89.0%
1,918.7
624.7
934.2
303.5
862.2
285.7
92.3%
94.1%
Overall balance
Including grants
Excluding grants
GDP
% to GDP (excluding grants)
% to GDP (including grants)
Memorandum Items
Total MTEF Expenditure 3/
Total PAF Expenditure
1/ The outturn expenditure figures refer to cheques issued and transfers to districts and they differ from the sectoral outturn
expenditures figures provided in Section 4 of this report, which are based on releases. Expenditure performance in terms of budget
releases is higher than in terms of cheques issued.
2/ External development expenditure is defined as expenditure outside GoU budgetary systems that is financed by project grants and
loans from external development agencies. Domestic development expenditure is defined as expenditure financed through GoU
budgetary systems.
3/ This excludes externally financed projects and loan repayments. It includes all recurrent and domestic development expenditures,
and the leasing costs of the presidential jet (approximately Shs 10bn), which are excluded from the development expenditures given
in this table.
5
Table 2.2 summarises the financing operations over the first half of the year. External
financing was higher than under the program, due to higher than expected budget
support loans and higher exceptional financing (due to delays in reaching debt relief
agreements with some creditors). As the table shows, the overall level of external
financing more than covered the deficit, allowing for a reduction in arrears and a buildup of government deposits in the banking sector. The reduction in arrears was however
below the programmed level, by about 27% (see Section 4.5 below). Treasury bill issues
were higher than planned, due to the need to sterilise the monetary impact of the inflows
of foreign exchange into the economy.
TABLE 2.2: FINANCING OPERATIONS – FIRST HALF OF FY 2001/02 (SHS BN.)
2001/02
Budget
2001/02 H1
Program
2001/02 H1
Outturn
2001/02 H1
Performance
340.5
77.9
108.5
139.3%
External Financing net
Disbursement
Project Loans
Budget Support Loans
Amortisation (-)
Exceptional financing 1/
826.8
934.1
260.7
673.4
(143.9)
36.6
405.9
453.9
123.7
330.2
(72.7)
24.7
423.5
465.1
119.9
345.2
(75.0)
33.4
104.3%
102.5%
96.9%
104.5%
103.2%
135.3%
Domestic financing (net) 2/
Bank financing
Bank of Uganda (net)
Commercial Banks
Non-Bank Financing
Cheque float
Domestic arrears payment
T-bills
(486.3)
(331.1)
(331.1)
(328.0)
(216.2)
112.0%
100.4%
(155.2)
(131.7)
(23.5)
(111.8)
(50.0)
(63.1)
1.3
(367.3)
(217.0)
(335.7)
118.7
(150.3)
(109.8)
(46.1)
5.6
0.0
0.0
52.3
Financing
Residual (Errors & Omissions)
134.4%
219.6%
73.0%
430.2%
1/ This represents debt service due but not paid to non-Paris Club creditors with whom debt rescheduling agreements
comparable to Paris Club agreements have yet to be concluded.
2/ Negative sign indicates an increase.
Table 2.3 and Figure 2.1 summarise the performance of the resource envelope during the
first half of the year. The resource envelope funds GoU budget expenditures, as set out
in the MTEF. It is derived by taking into account all of the resource inflows available to
finance budget expenditures (i.e. domestic tax revenues, non-tax revenues and external
donor grants and loans), less the financing requirements of external debt repayments,
arrears clearance and the domestic bank savings needed to accommodate monetary
policy and foreign reserve objectives.
As Table 2.3 shows, the programmed level of the envelope for the first half of the year
was of Shs 929bn (i.e. 48.7% of the annual budget), and the outturn was at Shs 860bn (a
7.7% shortfall). This under-performance is mainly due to lower than expected budget
inflows, especially in terms of donor budget support grants. This was in turn due to the
higher than expected value of the Shilling and to delays in donor disbursements.
Domestic resources also under-performed during the first half of the year, due to the
6
shortfalls in URA revenues and in repayments on loans by parastatals (mainly UEB and
UDB).
Table 2.3 also indicates the current projections for the resource envelope for the whole
year. The overall shortfall in the resource envelope is currently expected to equal Shs
63bn, due to the under-performance of domestic resources. This under-performance will
require a corresponding reduction in expenditures over the course of the year. Budget
support is also projected to under-perform significantly by the end of the year. Much of
this shortfall (i.e. Shs 283bn) is due to the fact that the second tranche of the World
Bank’s Poverty Reduction Support Credit (PRSC-II) is currently expected to be
disbursed during the next FY. Higher domestic financing will absorb the underperformance of budget support.
TABLE 2.3: RESOURCE ENVELOPE 2001/02 – FIRST HALF OUTTURN AND A NNUAL PROJECTIONS *
(SHS BN)
1st Half
Program
1st Half
Outturn
1st Half
Perf.
Annual
Budget
Annual
Projection
Annual
Projected
Perf.
95.1%
A. Domestic
635.9
619.7
97.5%
1,334.4
1,269.7
Resources
o/w URA
610.16
589.6
96.6%
1,259.0
1,214.3
96.4%
o/w Non-URA
13.8
30.0
217.5%
40.7
38.5
94.5%
o/w Loan repayments
11.9
0.1
0.8%
34.7
16.9
48.7%
B. Budget Support
669.3
592.9
88.6%
1,168.1
759.5
65.0%
o/w Grants
339.1
247.7
73.0%
494.7
413.6
83.6%
o/w Loans
330.2
345.2
104.5%
673.4
345.9
51.4%
C. Total Resource
1,305.2
1,212.6
92.9%
2,502.5
2,029.2
81.1%
Inflows
Minus
D. External Debt
-48
-41.6
86.7%
-107.3
-93.6
87.2%
Repayment 1/
E. Domestic
-264.8
-268.9
101.5%
-354.6
34.0
-9.6%
Financing 2/
F. Arrears Payments
-63.1
-46.1
73.0%
-131.7
-123.7
93.9%
G. Total Available
929.2
857.2
92.3%
1,908.9
1,845.9
96.7%
for Budget 3/
* The annual projections shown in this table are as of March 26 2002, and take into account performance
information for the first eight months of the year.
1/ This includes amortisation plus exceptional financing.
2/ This excludes arrears payment and includes the residual (see Table 2.2).
3/ This differs from the overall expenditure figure in the MTEF as leasing costs of the presidential jet are
defined as external debt amortisation rather than development expenditure.
7
FIGURE 2.1: RESOURCE ENVELOPE PERFORMANCE, FIRST HALF OF FY 2001/02 (SHS BN)
1,000
Program
Outturn
800
Shs Bn
600
400
200
Domestic
Resources
Budget
Support
External Debt
Repayment
Domestic
Financing
Arrears
Budget
Expenditures
(200)
(400)
3. RESOURCE PERFORMANCE
This section of the report analyses the performance of resources available for GoU
expenditures during the first half of the year (summarised in Table 2.3 above). We first
examine URA revenues, then non-URA revenues and finally budget support
performance.
3.1 URA REVENUE PERFORMANCE
URA collections for the first half of the year were affected by the poor performance of
import duty, excise duty and VAT on services and imported goods. The shortfall in
revenue collections amounted to Shs 20.5bn, or 3.4% of the projected collections for the
period (see Table 3.1 below). This shortfall can be partially attributed to the unexpected
strength of the shilling and to tax policy changes. Overall revenue performance was
13.1% higher than in the same period last year.
8
TABLE 3.1: URA R EVENUE PERFORMANCE, FIRST HALF OF FY 2001/02 (SHS BN)
Head of Revenue
Annual Budget
Program
Actual Outturn
Performance
(%)
Net Collections
Income Tax
PAYE
Income Tax (not PAYE)
W/ Tax
Rental and Others
Tax on interest
Customs Duty
Petroleum Product s
Other
Excise Duty
Imported Goods
Local Products
VAT
Imported Goods
Local Products
Services
Fees and Licenses
National Lottery
1258.7
262.9
115.1
58.8
59.9
6.2
22.9
379.7
215.5
164.2
158.6
29.4
129.2
436.4
227.2
94.1
115.1
57.4
0.3
610.2
121.0
55.6
25.4
27.5
2.8
9.7
187.6
106.0
81.7
76.3
14.8
61.5
215.0
112.0
44.0
59.0
28.5
0.1
589.7
134. 6
65.1
35.8
28.5
2.9
2.4
172.4
107.3
65.0
66.6
11.5
55.1
208.5
108.3
56.0
44.1
28.1
0.1
96.6%
111.3%
117.1%
140.5%
103.5%
102.1%
25.1%
91.9%
101.3%
79.6%
87.3%
77.3%
89.7%
97.0%
96.7%
127.4%
74.8%
98.5%
75.0%
Income Tax. This head of revenue was the only one to out-perform the program during
the first half of the year. Income taxes were Shs 13.6bn or 11.3% above projections, with
particularly strong performance by PAYE and withholding tax. The December collection
was particularly good, 33% above the target. The good performance by PAYE is
attributable to a pay rise given by a number of employers and was also partially due to
the low rate of inflation.
Customs Duty. This head of revenue performed 8.1% below the estimate during the
first half of the year. This under-performance can be largely attributed to the very low
performance by tax on non-oil products. Custom duty collections were also negatively
affected by the appreciation of the exchange rate.
Excise Duty. Excise duties were the lowest performing of the main heads of revenue, at
87.3% of the program. This was particularly the case for imported products, mainly
because of smuggling and lower than expected demand levels.
VAT. VAT receipts were below the target by 3%, due to the shortfalls in VAT on
imports (mainly due to the strength of the Shilling) and on services. VAT on local
products has shown considerable improvements, with the exception of cigarettes. VAT
on services has suffered from the VAT exemption on hotels.
3.2 NON-URA REVENUES AND LOAN REPAYMENTS
Non-URA Revenues.
As of July 2001, non-tax revenue collected by Ministries and other agencies is no longer
spent at source, but is remitted to the Consolidated Fund through the Treasury Office of
9
Accounts (ToA). The cumulative non-tax revenue as reported by ToA for the first half
of the year amounted to Shs 30bn, Shs 16.2bn above the programmed amount (see
Table 2.3).
This over-performance was due to the higher than expected dividends paid by the Bank
of Uganda, amounting to Shs 21.8bn (which includes Shs 6.5bn that was not paid during
the last financial year). The collection of passport fees also performed above the
program, amounting to Shs 1.1bn, three times higher than the estimate.
Other recurrent non-tax revenues collected by ministries and other agencies performed
at 98% of the pro-rata budget. Performance across these institutions was however
uneven, with some institutions performing well and others under-performing (see Table
3.2). Performance against the overall budget for ministries and other agencies (including
development) was lower, at 67% of the pro-rata budget, due to the under-performance
of development collections. This overall under-performance implies that non-tax
revenues for the FY 2001/02 are currently projected to fall short of the target by Shs
2bn (see Table 2.3 above) in spite of the additional dividend payments by the Bank of
Uganda.
10
TABLE 3.2: RECURRENT NON-URA REVENUE PERFORMANCE FOR MINISTRIES , MISSIONS AND
OTHER A GENCIES, FIRST HALF OF FY 2001/02
Shs.Mn
Ministries
2001/02
Budget
H1
Collections
% of
Pro-rata
Budget
13,847
7,216
104%
001 President's Office
001 State House
003 Prime Minister
004 Public Service
007 Justice
008 Finance,P &ED
010 Agriculture
311 Judiciary, Statutory
012 Lands, Water & Envir.
013 Education & Sports
014 Health
015 Parliament
016 Works, Housing & Comm
021 Defence
022 Internal Affairs
023 Mulago Hospital
025 Local Government
028 Tourism, Trade & Ind.
029 Energy & Minerals
030 Gender, Labour & SD
038 Uganda Police
039 Uganda Prisons
049 Electoral Comm.
1,496
3
1,283
327
735
2,266
86
0
439
5
0
738
44
71
194
730
33
6
8
310
42
1,344
415
1
8
1,773
0
892
50
111
59%
Missions
1,086
0A1 High Comm.London
0A2 Mission New York
OA4 Embassy Washington
OA6 High Comm.New Delhi
OA7 High Comm.Cairo
OB2 Embassy Addis Ababa
OB2 Embassy Beijing
OB5 Embassy Tokyo
OB7 Embassy Riyadh
OB9 Embassy Nairobi
OC2 Embassy Abuja
OC3 Embassy Brussels
OC4 Embassy Rome
OC8 Embassy Pretoria
126
585
85
15
3
5
5
6
3
207
2
11
1
32
14,933
105
26
1,122
1,838
27
1,346
1,890
1,297
TOTAL
99
0
34
6
14
28
17
7,315
0%
115%
44%
53%
64%
76%
60567%
590%
325%
240%
45%
61%
263%
94%
8%
18%
0%
12%
0%
0%
386%
0%
0%
460%
0%
27%
0%
317%
0%
0%
98%
Loan Repayments.
The performance of repayments of loans by parastatals was very disappointing during
the first half of the year. The only parastatal to make a payment to government was
NPART, which transferred Shs 1.3bn. UEB and UDB made no payment during the first
half of the year. The poor performance of UEB is partially due to the downward revision
11
in electricity tariffs. The current projections are that only Shs 17bn will be collected by
the end of the year, half of what was originally planned.
3.3 BUDGET SUPPORT LOANS AND GRANTS
Table 3.3 below details the performance of budget support loans and grants during the
first six months of the year relative to the program. In US Dollar terms, budget support
under-performed by 9% (equivalent to US$ 34m) due to the shortfalls in grants
(especially those earmarked for PAF expenditures). In Shillings terms the underperformance of budget support was higher (11%) due to the impact of the stronger than
expected level of the Shilling.
Budget support loans performed above the program during the first half of the year, due
to the release of the World Bank’s SAC III loan. This was carried-over from the previous
financial year, and was disbursed after the government met conditions on NPART
collections.
Grants performance was at 75% of the program (including the savings from the Highly
Indebted Poor Countries (HIPC) initiative) due to delays in disbursements on the part of
some donors. The UK delayed some of its planned disbursement in December whilst
Ireland is now disbursing its grants in two tranches. There were also delays in the receipt
of grants from the EU. HIPC under-performed the target level of savings, due to the
timing of payments of interest on the HIPC trust fund. This shortfall is expected to be
recaptured in the second half of the year.
12
TABLE 3.3: BUDGET SUPPORT PERFORMANCE, FIRST HALF FY 2001/02 (US$ M)
Program
Outturn
Performance
19.3
0
16.12
150
185.4
17.2
18.3
15.7
147.7
198.9
89.3%
UK general budget support
UK Education
UK Justice reform/law and order
Ireland General
Ireland (education - ESIP)
Ireland (commercial justice reform/swap)
Austria (Commercial Justice)
Netherlands (Public service reform)
Netherlands (Procurement reform)
Netherlands (Legal sector reform)
Norway (Justice reform)
Sub-Total - non PAF Grants
HIPC
GRANTS (PAF)
24.7
12.6
3.5
0
2.4
0
0.5
1.1
0.7
1
0.1
46.6
40.6
27.0
12.7
0.0
3.4
2.0
0.5
0.0
0.0
1.4
0.6
0.6
48.0
34.9
109.2%
100.6%
0.0%
Netherlands General
Netherlands Educ Sector Support
6.3
9.2
8.5
6.8
134.4%
74.0%
Netherlands District Devpt
Netherlands (PMA)
3.5
2.4
1.9
0.4
53.5%
16.7%
Ireland Education
Ireland Health
0.8
13.9
3.1
2.0
388.8%
14.0%
Ireland (PMA)
EU-Education
8.9
6
0.3
13.0
3.8%
217.4%
EU-SASPIV excluding Educ
UK PMA
UK Health
14.9
7.1
14.1
0.0
5.1
0.0
0.0%
72.0%
0.0%
UK Education
Sweden Health
4.2
2.5
4.3
4.7
101.5%
186.3%
0.6
0.6
1.2
6.5
102.7
189.9
375.3
2.1
0.6
N/A
6.5
59.3
142.2
341.0
356.8%
105.6%
669.3
1783
592.9
1738
88.6%
LOANS
ADB SAL II
World Bank (SAC III)
World Bank LGDP
World Bank PRSC
Sub-Total Loans
GRANTS (NON-PAF)
Norway Health
CIDA Education
Austria Water
USAID (SUPER)
Sub-Total - PAF Grants
Sub-Total - Grants
GRAND TOTAL
Memo Items
Grand Total (Shs Bn)
Implied Exchange Rate (Shs/US$)
13
97.4%
98.4%
107.2%
81.3%
0.0%
0.0%
202.7%
65.0%
558.2%
103.1%
85.8%
100.0%
57.7%
74.9%
90.9%
4. BUDGET RELEASE PERFORMANCE
4.1 O VERALL BUDGET RELEASE PERFORMANCE
Overall budget releases during the first six months of the current financial year totalled
Shs 906bn. This represents a 97.0% performance relative to the programmed level of
expenditure of Shs 934bn. Performance relative to the pro-rata budget of Shs 959bn was
at 94.5%.
The overall release performance during the first half of the year was roughly in line with
the projected domestic resource shortfall of Ush 65bn expected over the course of this
year (see Table 2.3). A number of votes however over-spent relative to the program,
implying that the resource shortfall affected some sectors significantly more than others,
as Section 5 of the report illustrates. Annex Table 1 provides detailed release
performance by vote/sector.
4.2 RELEASE PERFORMANCE BY EXPENDITURE CATEGORY
Table 4.1 and Figure 4.1 below illustrate release performance by expenditure category.
Both wage and non-wage expenditures were above the programmed level, whilst
development spending was significantly below the program.
Wages. Wage expenditure amounted to 101.3% of the program during the first half of
the year. This slight over-performance was mainly due to the over-spending in the PAF
wage bill caused by the releases for primary teachers wages, which were 8% above the
programmed amount, mainly because teachers were recruited at higher grades than had
been envisaged. More detail on the performance of wage expenditures in each sector is
given in Section 5 below.
Non-wage Recurrent. Non-wage recurrent expenditures were above the programmed
levels by 2.8%. This over-performance can be partially explained by the over-spending in
statutory votes, such as the Electoral and Parliamentary Commissions. Other non-wage
recurrent items were also above their budgets, most notably the Ministries of Defence,
Internal Affairs and State House. Section 5 of this report provides explanations for these
over-expenditures. PAF non-wage expenditures on the other hand performed poorly, at
89% of the program, due to slow releases under some district grants (see Section 4.4
below).
Development. The performance of development expenditure was at 86.5% of the
program during the first half of the current FY. This low performance can be explained
by the need to absorb the resource shortfalls experienced in the first two quarters and to
allow for some expenditure re-allocations to non-wage recurrent expenditures. Many
non-PAF projects have consequently been released at 70% of their pro-rata budgets.
PAF performance was significantly higher than non-PAF performance, due to the
protection from release cuts accorded to PAF expenditures.
14
Interest Payments. Interest payments performed at 90% of the program. This saving
was due to the appreciation of the Shilling, which reduced external interest payments,
and to the lower than projected domestic interest rates.
TABLE 4.1: RELEASE PERFORMANCE BY EXPENDITURE CATEGORY, FIRST HALF OF FY 2001/02
(SHS BN)
Annual
Semi-Annual
First Half
First Half
Release
Budget
Budget
Program
Releases
Performance
(pro-rata)
vs. Program
Wage
545.7
272.8
263.7
267.1
101.3%
Statutory
17.1
8.5
8.5
8.4
98.3%
PAF
197.0
98.5
95.1
99.7
104.9%
Other
331.6
165.8
160.1
159.0
99.3%
Non-wage Recurrent
702.4
351.2
345.1
354.7
102.8%
Statutory
101.1
50.6
53.6
64.0
119.3%
PAF
157.7
78.9
77.9
69.6
89.3%
Other
443.6
221.8
213.6
221.1
103.5%
Development
515.5
257.8
242.1
209.3
86.5%
PAF
270.0
135.0
130.5
124.8
95.6%
Other
245.5
122.8
111.6
84.5
75.7%
TOTAL excl. interest
1,763.6
881.8
850.9
831.1
97.7%
Interest Payments
155.1
77.6
83.2
75.1
90.2%
TOTAL
1,918.7
959.4
934.1
906.2
97.0%
Memo: PAF Total
624.7
312.4
303.5
294.1
96.9%
FIGURE 4.1: R ELEASE PERFORMANCE BY EXPENDITURE CATEGORY, FIRST HALF OF FY 2001/02
(SHS BN)
400
350
Program
Outturn
Shs Bn
300
250
200
150
100
50
Wage
Non-wage
Development
Interest
Payments
4.3 R ELEASE PERFORMANCE BY CENTRE , LOCAL GOVERNMENT AND STATUTORY VOTE
Table 4.2 shows release performance by central, local government and statutory vote.
The highest performing votes were statutory votes, at 115.4% of the programmed
expenditures. This is mainly due to over-expenditure on non-wage items, as mentioned
15
above. Overall local governments performed at slightly above 100% of their
programmed expenditures, with high release performance on wage and development
items. The latter was mainly due to the front-loading of releases for LGDP. Central
votes were the lowest performing category, at 93.3% of the program. This underperformance was mainly due to low development releases (because of the revenue
shortfalls) and to a relatively poor wage performance, caused by delays in recruitment for
some votes (see Section 5 below).
TABLE 4.2: RELEASE PERFORMANCE BY VOTE TYPE, FIRST HALF OF FY 2001/02 (SHS BN)
Annual
Semi-Annual
First Half
First Half
Release
Budget
Budget
Program
Releases
Performance
(pro-rata)
vs. Program
Centre
1,023.1
511.6
482.5
450.1
93.3%
Wage
229.2
114.6
111.2
107.9
97.0%
Non-wage
414.7
207.3
195.4
204.6
104.7%
Development
379.2
189.6
175.9
137.7
78.3%
Local Government
615.7
307.8
303.0
305.4
100.8%
Wage
297.8
148.9
143.2
150.1
104.8%
Non-wage
181.6
90.8
93.6
83.7
89.4%
Development
136.3
68.1
66.2
71.6
108.2%
Statutory
124.8
62.4
65.4
75.5
115.4%
Wage
18.7
9.3
9.3
9.2
98.1%
Non-wage
106.1
53.1
56.1
66.4
118.3%
Interest Payments
155.1
77.6
83.2
75.1
90.2%
TOTAL
1,918.7
959.4
934.2
906.1
97.0%
Note: Statutory totals in this table include PAF expenditures.
4.4 PAF PERFORMANCE
Table 4.3 and Figure 4.2 summarise the release performance of PAF expenditures during
the first half of the year. Overall performance was at 97% of the program, slightly lower
than the overall non-interest budget performance of 97.7%. This relative underperformance was mainly due to shortfalls in non-wage releases to local governments. In
particular, releases under the equalisation and non-sectoral (PMA) grants were very low,
due to delays in the submission of work plans and in the finalisation of the release
modality (see Section 5.9 below). Overall PAF development releases were also below
100%, in spite of the protection of PAF programs from reductions in releases. This
under-performance is accounted for by delays in the submission of detailed work plans
and of progress reports. The PAF overall wage bill over-performed by 5% relative to the
program, due to the higher than projected primary teachers wage bill, as mentioned
above.
16
TABLE 4.3: PAF R ELEASE PERFORMANCE, FIRST HALF OF FY 2001/02 (SHS BN)
Annual
Semi-Annual
First Half
First Half
Release
Budget
Budget
Program
Releases
Performance
(pro-rata)
vs. Program
Wage
197.0
98.5
95.1
99.7
104.8%
Centre
1.3
0.7
0.7
0.4
61.2%
Local Government
194.1
97.0
93.6
98.5
105.2%
Statutory
1.6
0.8
0.8
0.8
99.8%
Non-wage Recurrent
157.7
78.9
77.9
69.6
89.3%
Centre
30.6
15.3
15.1
13.2
87.6%
Local Government
122.1
61.1
60.3
54.0
89.5%
Statutory
5.0
2.5
2.5
2.4
97.6%
Development
270.0
135.0
130.5
124.8
95.6%
Centre
133.7
66.9
64.6
53.2
82.3%
Local Government
136.3
68.1
65.9
71.6
108.7%
TOTAL
624.7
312.4
303.5
294.1
96.9%
Centre
165.6
82.8
80.4
66.8
83.1%
Local Government
452.5
226.3
219.8
224.1
101.9%
Statutory
6.6
3.3
3.3
3.2
98.1%
FIGURE 4.2: PAF R ELEASE PERFORMANCE BY CATEGORY, FIRST HALF OF FY 2001/02 (SHS BN)
250
230
Program
Outturn
210
190
Shs Bn
170
150
130
110
90
70
50
Wage
Non-wage
Development
Centre
Local
Government
4.5 ARREARS
Table 4.4 below summarises the performance of releases for arrears payments during the
first half of FY 2001/02. Overall performance was at 86% of the budget. All categories
of arrears payments performed above 90%, except for non-wage arrears. Only Shs 9bn
of non-wage arrears were released, against a total annual provision of Shs 31bn. This low
performance was largely due to reduction in release limits necessary to offset the
shortfall in domestic resources.
17
TABLE 4.4: A RREARS RELEASES, FIRST HALF OF FY 2001/02 (SHS BN)
Category
Wages
Non-wage Recurrent
Development
Statutory
TOTAL
Annual Budget
Estimates
14.4
30.6
18.9
67.9
131.8
Budget Release
6.9
8.9
9.2
31.6
56.6
Performance
(% of pro-rata budget)
95.8%
58.2%
97.3%
93.1%
85.9%
5. PERFORMANCE BY SECTOR
Whilst overall budget performance was close to 100% of the program, performance in
the first half of the year has differed widely between sectors. As Table 5.1 shows, two
sectors (Security and Public Administration) have performed above their pro-rata
budget, whilst many sectors (most notably Agriculture and Economic Functions and
Social Services) have performed significantly below 100%. 3 Figure 5.1 summarises the
relative expenditure performance of each sector in the economy, showing how only
three sectors (Security, Public Administration and Education) performed above the
average level for the whole budget.
TABLE 5.1: BUDGET AND RELEASES BY SECTOR, FIRST HALF OF FY 2001/02 (SHS BN)
SECTOR
Security
Roads and Works
Agriculture
Education
Health
Water
Law and Order
Accountability
EF and SS*
Public Administration
Total (excl. interest)
Interest Payments
TOTAL
Approved
Budget
229.2
170.2
49.1
458.3
170.1
54.0
128.5
22.8
139.9
325.3
1763.6
155.1
1918.7
* Economic Functions and Social Services
1st Half
Releases
124.8
71.7
18.6
220.9
77.5
25.3
55.3
10.1
52.8
173.9
831.1
75.1
906.1
Performance (% of pro-rata budget)
Total
Wage
Non-Wage
Dev.
108.9%
99.9%
123.5%
83.5%
84.3%
79.8%
108.6%
74.9%
75.8%
91.5%
82.9%
72.4%
96.4%
103.2%
87.7%
93.0%
91.2%
89.6%
94.5%
84.2%
93.7%
101.8%
91.0%
93.8%
86.1%
93.4%
85.0%
64.4%
89.0%
85.1%
89.3%
108.1%
75.5%
77.8%
51.2%
80.3%
106.9%
97.9%
114.3%
70.5%
94.2%
97.9%
101.0%
81.2%
96.8%
0.0%
96.8%
0.0%
94.5%
97.9%
100.2%
81.2%
3 Table 5.1 considers release performance against the pro-rata
budget rather than relative to the fiscal
expenditure program, since this program is not drawn up at a sectoral level.
18
FIGURE 5.1: BUDGET AND RELEASES BY SECTOR, FIRST HALF OF FY 2001/02 (SHS BN)
10%
ll
era
Ov
ult
ric
Ag
EF
an
dS
S
ure
y
an
dO
rde
Ro
r
ads
and
Wo
rks
ilit
tab
La
w
Ac
co
un
ter
He
alt
h
tra
nis
mi
cA
d
bli
-10%
Wa
n
tio
rit
cu
Se
-5%
Ed
uc
ati
on
y
0%
Pu
Over/under performance
relative to pro-rata budget
5%
-15%
-20%
-25%
The relative performances of sectors in the budget during the first half of this FY
confirm some of the trends in budget execution of previous years. As Table 5.2 below
shows, Public Administration over-spent its budget for the past two financial years,
whilst Security performed above the average budget performance during the same period
(even though it has spent less than 100% of its budget). By contrast, sectors such as
Economic Functions, Agriculture, Roads and Works and Health consistently performed
below their budget, bearing the brunt of reductions in expenditures due to resource
shortfalls.
TABLE 5.2: BUDGET AND RELEASES BY SECTOR, HISTORICAL TRENDS (SHS BN)
1999-00
SECTOR
Security
Roads and Works
Agriculture
Education
Health
Water
Law and Order
Accountability
EF and SS
Public Administration
Total (excl. interest)
Interest Payments
Total (incl. interest)
Budget
193.9
105.6
18.4
341.5
82.9
18.4
87.2
7.4
79.7
245.0
1191.7
89.6
1281.3
Release
191.0
100.7
18.1
325.1
79.9
18.4
90.5
10.1
56.9
251.4
1142.0
94.7
1236.7
2000-01
Perf.
98.5%
95.3%
98.7%
95.2%
96.3%
99.9%
103.8%
137.2%
71.3%
102.6%
95.8%
105.7%
96.5%
Budget
209.8
138.0
24.1
403.8
114.2
36.4
94.5
17.1
95.4
264.9
1410.7
107.1
1517.8
Release
208.4
127.8
21.8
373.0
110.1
36.4
97.7
16.3
75.0
301.6
1368.1
127.6
1495.7
Perf.
99.4%
92.6%
90.3%
92.4%
96.4%
100.0%
103.4%
95.4%
78.7%
113.9%
97.0%
119.1%
98.5%
Budget
229.2
170.2
49.1
458.3
170.1
54.0
128.5
22.8
139.9
325.3
1763.6
155.1
1918.7
2001-02
Release
Perf.
(1st H) (Pro-rata)
124.8
108.9%
71.7
84.3%
18.6
75.8%
220.9
96.4%
77.5
91.2%
25.3
93.7%
55.3
86.1%
10.1
89.0%
52.8
75.5%
173.9
106.9%
831.1
94.2%
75.1
96.8%
906.1
94.4%
The rest of this section of the report provides a more detailed analysis of release
performance by sector, based on the data provided in Annex Table 1.
19
5.1 SECURITY
The security sector out-performed its pro-rata budget by 9% during the first half of the
year. Wage expenditure were at 100% of the pro-rata budget, whilst non-wage recurrent
expenditure was above the budget by 23.5%. Development expenditures were below the
pro-rata budget by 17%.
The non-wage recurrent over-expenditure was due to a one-off supplementary release of
Shs 10bn to strengthen the army to cater for increased anti-terrorism and security
activities. This additional release implies that by the end of the Financial Year the
Ministry of Defence is expected to be above its budget by 5%.
5.2 ROADS AND WORKS
This sector performed at 84% of its pro-rata budget. This was due to shortfalls in wage
and development releases of 10% and 15% respectively. Non-wage recurrent
expenditures were above the pro-rata budget by 9%.
The relatively low performance of the sector was due to shortfalls in releases to central
government. The wage shortfall was due to failure to fill all of the approved structures,
whilst development releases were reduced due to the need to meet the domestic revenue
shortfall and meet some of the pressures from other areas in the budget.
By contrast, performance at the district level was high, at 122% of the pro-rata budget.
This was due to the front-loading of the some of the district road work plans.
5.3 AGRICULTURE
The agriculture sector was the second-lowest performing sector in the budget, at 76% of
its pro-rata allocation. Wage, non-wage and development releases were all below the prorata budget, respectively at 91%, 83% and 72% of the budget.
The under-performance of this sector can be largely explained by the revision in the
approved estimates after the Budget was announced, which were increased by Shs 18bn
to fund the Strategic Exports initiative and NAADs. These additional funds have started
to be released only during the second quarter of the year, explaining much of the underperformance of development expenditures.
5.4 E DUCATION
Education performed at a relatively high level during the first half of the year, at 96.4%
of the pro-rata budget. A number of institutions performed above their pro-rata budget.
These include: Makerere University, the Institute of Teacher Education (ITEK), District
Primary Education and District Secondary Education.
The overall releases for the education wage bill were particularly high (at 103% of the
pro-rata budget) due to the impact of recruitment of additional primary and secondary
teachers. The reason for this over-expenditure is that at the time of finalising the
20
2001/02 estimates, the U7 scale was used, but a substantial number of teachers (14,030
in the February 2002 payroll) were appointed to the higher salary grades of U1 -U6.
Some votes within the Education sector under-performed in their wage payments, due to
the presence of non-filled vacancies (e.g. Education Service Commission and District
Tertiary Institutes).
The overall non-wage recurrent performance in this sector was low, at 88% of the prorata budget. This was due to a variety of factors, including the reduction in cash release
limits necessary to offset the shortfall in domestic revenues and the switch from the new
to the old allocation formula for the UPE capitation grant, which led to savings across
many districts.
Education development releases as a whole performed at 93% of the pro-rata budget.
Two items (ITEK and the School Facilities Grant (SFG)) spent above their budget. The
over-spending under SFG was due to the front-loading of releases to five districts, which
have now exhausted their primary education development budget.
5.5 HEALTH
The Health sector performed at 91% of the pro-rata budget. District Hospitals and the
Uganda Aids Commission spent all of their pro-rata budget, whilst releases to other
institutions were below 100%, most notably in the case of Butabika and Mulago
hospitals.
The wage releases in the health sector were at 90% of the budget. The shortfall is
accounted for by the presence of unfilled vacancies in the Ministry of Health, Butabika
hospital, the Health Service Commission (HSC) and District Referral Hospitals. A
supplementary of Shs 0.2bn was issued to the Health Service Commission to allow it to
cater for advertisement of posts and recruitment of staff for hospitals. The spending on
Primary Health Care (PHC) wages at the district level was high and above the
programmed amount, due to a higher number of people than it was projected accessing
the payroll. A total over-expenditure of Shs 4bn is expected for this item over the course
of the year.
Non-wage releases performed at 94% of the pro-rata budget. Development releases were
lower, at 84% of the budget, in line with the average performance across all sectors.
Particularly low releases (below 50%) were recorded for Butabika Hospital, Mulago
Hospital and the Health Service Commission. The low release to Butabika was due to
failure to submit appropriate CCS forms. Poor release performance to Mulago and to the
HSC was due to accountability problems.
5.6 WATER
The water sector performed at 94% of the pro-rata budget. Wage releases were above
the pro-rata budget (by 2%), whilst non-wage and development releases undershot the
budget by 9% and 6% respectively.
21
Performance was relatively high at the district level, especially for development releases.
The District Rural Water conditional grant performed 6% above its pro-rata budget, due
to the front-loading of releases. Development releases for the centre were relatively low
(83.1% of the budget), mainly on account of the budgetary increase brought about by the
intervention for strategic exports, which was not fully reflected in releases during the
first half of the year.
5.7 JUSTICE , LAW AND O RDER
The Justice, Law and Order sector (JLO) performed at 86% of its pro-rata budget during
the first half of the year. This was one of the lowest performances in the budget, mainly
due to low levels of releases to the non-wage items (most notably to the Police and
Prisons) and development expenditures (especially the Police, Prisons and the Ministry
of Justice). Overall non-wage and development releases were 15% and 35% below the
pro-rata budget. Wage releases were on target, except for Uganda Police and the Ministry
of Justice (due to the presence of a number of vacancies).
The Ministry of Internal Affairs spent 30% above its budget, due to accelerated releases
to fund operations in Karamoja during October and November, and anti-terrorism
activities. An accelerated release was also made to the Ministry of Justice to facilitate the
activities of Constitutional Review Commission. Other items performed well below
100% due to the reduction in the cash release limits necessary to offset the shortfalls in
domestic revenues.
5.8 ACCOUNTABILITY
Releases to the accountability sector were at 89% of the budget during the first six
months of the year. Most items in this sector performed at around 90% of the budget,
with the notable exceptions of the wage releases to the Auditor General (at 67% of the
budget, due to the presence of un-filled vacancies). The District conditional grant for
Monitoring and Accountability performed at 87% of the budget due to delays in the
submission of work plans, due to the change in the format of the required submission.
5.9 E CONOMIC FUNCTIONS AND SOCIAL SERVICES
This sector is the lowest performing sector of the budget, at 75.5%. Wage, non-wage and
development releases were all below the pro-rata budget, by 12%, 49% and 20%
respectively.
Releases were particularly low for the development budgets of Energy and Minerals,
Lands and Environment and Ministry of Finance:
- The Energy and Minerals development releases were at 58% of the pro-rata
budget, due to the poor performance of non-tax revenue collections;
- The low performance under Lands and Environment was mainly due to one
project, the Land Tenure Reform project, because of the large balance brought
forward from the previous FY and of delays in implementation. The difficulties
in implementation have now been largely resolved thanks to the appointment of
22
-
the Land Tribunals, and it is expected that releases in the rest of the FY will be
largely in line with the approved budget; and
Development releases to the Ministry of Finance were low due to noncompliance with the commitment control system by some projects (e.g.
Capitalisation of UDB), to poor performance in terms of returns from the Public
Enterprises Restructuring Project, Uganda Posts and Railways, and to delays in
the start of some projects (e.g. the National Planning Agency and the Multi
Sectoral Regulator).
Performance at the district level was also low, with the exception of the Local
Government Development Program (LGDP). The district Equalisation, Non-Sectoral
and Dutch Development grants performed at low levels because of the following
reasons:
- the Equalisation grant performed at around 30% of the pro-rata budget, due to
delays in the submission of work plans by districts and further delays in advice by
sector ministries;
- no releases were made under the Non-Sectoral (PMA) grant, because of the need
to finalise the modalities for the utilisation of these funds. Moreover, several
local governments did not account for funds released at the end of the previous
FY.
- The Dutch district development grant performed at 61% of the budget, due to
delays in the submission of work plans consistent with the LGDP modality and
problems in satisfying other release requirements (e.g. the submission of progress
reports and the of financial statements from the 4th quarter of FY 2000/01).
The LGDP performed 15% above its pro-rata budget, due to the front-loading of
releases in accordance with the work plans.
5.10 PUBLIC ADMINISTRATION
This sector displays the highest level of over-expenditure relative in the budget, as has
been the case in previous years (see Table 5.2). Overall releases were 7% above the prorata budget, mainly on account of over-expenditure in three votes: State House, Electoral
Commission and Parliamentary Commission. Non-wage expenditures were particularly
high, 14% above the pro-rata budget. Wage and development expenditure were below
the pro-rata budget, by 2% and 30% respectively.
Release to State House were above the pro-rata budget by 13%, with high spending
especially under non-wage recurrent items. This was due to the increased level of
presidential activities.
Electoral Commission received expenditure releases 60% above its pro-rata budget. This
was due to the acceleration of releases to cater for Local Government elections and to
the expenditures for the Photographic Equipment (PVRIS).
Releases to the Parliamentary Commission have been 43% above the pro-rata budget,
mainly because of the higher emoluments to MPs that were approved after the
23
appropriation of the budget. These emoluments have led to higher than projected nonwage expenditures.
6. FISCAL DECENTRALISATION
This section of the report provides a summary of the performance of all grants to local
governments. Table 6.1 below details the performance of all of the government transfers
to local governments in the MTEF. Overall performance relative to pro-rata budget
during the first half of the year was at 99.2%. This reflected the high spending on a
number of grants, most notably on road ma intenance, primary education (both wages
and development), secondary education and LGDP. The reasons for these high levels of
releases are given in Section 4 and 5 of this report, and relate to the front-loading of
some work plans and to the under-budgeting of the primary and secondary teacher wage
bills.
Some local government grants performed well below their pro-rata budget. This was
particularly the case for NAADs, the UPE capitation grant, the Equalisation grant, the
Non-Sectoral Conditional Grant and the Dutch District Development grant. This was
due to a number of different factors, as explained in Sections 4 and 5 of the report.
TABLE 6.1: RELEASE PERFORMANCE OF TRANSFERS TO LOCAL GOVERNMENTS, FIRST
HALF OF FY 2001/02 (SHS BN)*
District Road Maintenance
Urban Road Maintenance
District Agricultural Extension
National Agricultural Advisory Services
District Primary Education
Wages
Capitation Grant
School Facilities Grant (SFG)
District Secondary Education
District Tertiary Institutions
District Health Training Schools
District NGO Hospitals/Primary Health Care
District Primary Health Care
District Hospitals
District Referral Hospitals (incl Other Delegated)
District Water
District Grant for Monitoring and Accountability
District Equalisation Grant
Local Government Development Programme (LGDP)
Non-Sectoral Conditional Grant
Dutch District Development Grant
Unconditional Grant (Urban Authorities)
Unconditional Grant (District)
TOTAL
Annual
Budget
20.91
4.00
5.47
2.57
155.56
46.74
55.90
50.19
9.81
1.93
11.59
60.89
8.87
18.62
25.35
10.27
4.40
31.92
6.07
10.89
4.66
69.06
615.65
1st Half
Releases Performance
13.24
126.6%
2.08
104.0%
2.45
89.8%
0.45
35.1%
80.88
19.11
31.38
27.05
3.81
0.97
5.26
29.71
4.43
7.54
13.39
4.49
0.64
18.37
0.00
3.34
2.33
34.47
305.39
* Performance in this table is assessed relative to the pro -rata budget
104.0%
81.8%
112.3%
107.8%
77.7%
99.8%
90.7%
97.6%
100.0%
81.0%
105.6%
87.4%
28.9%
115.1%
0.0%
61.4%
100.0%
99.8%
99.2%
7. CONCLUSION
This report has presented a comprehensive picture of budget performance during the
first-half of the current Financial Year. As the report has highlighted, budget execution
has been under considerable pressure during this period because of both shortfalls in
domestic revenue collections and expenditure pressures in several areas of the budget.
24
The combination of these two factors has led to reduction in releases in many sectors of
the economy. As a result, all sectors of the budget, with the exception of Security and
Public Administration, have performed below 100% of the pro-rata budget.
Expenditures under the Poverty Action Fund have largely been insulated from the
pressures faced by the budget during the first six months of the year, and PAF has
performed at just under 100% of the pro-rata budget. This degree of protection has
successfully ensured that the government continues in its efforts to focus expenditure on
directly poverty-reducing activities. It has however also implied that the reductions in
expenditures to non-PAF areas of the budget have had to be more severe, affecting
other critical areas of government expenditure.
25