Government has classified wages and salaries of civil servants, Ministry of Health spending, and security as priority spending in the foreseeable future until the country can contain the COVID-19 scourge.
Secretary to the Treasury Keith Muhakanizi said in a statement to all accounting officers that salaries, wages and pensions will be for all ministries, departments, agencies, and local government.
On security, the priority payments will apply to the office of the president, Ministry of Defense, Prisons, Police, and State House.
For health spending, Muhakanizi said, will include payments made by the Ministry of Health, regional referral hospitals, and other health facilities.
On Tuesday, Ministry of Finance tabled before Parliament a supplementary budget request of Uganda Shillings 284billion to respond to coronavirus.
Security was to take a giant share of the money (Shs 81bn), a revelation that drew criticism from legislators. At least Shs 61bn was earmarked for the Ministry of Health.
With tax revenues’ slump due to businesses coming to a standstill, it means the government will have to re-allocate some of the funds from other sectors to respond to health.
This automatically lends budgeted activities in other sectors undoable. This includes payments to private businesses that government owed money which has implications on how they will operate post-COVID-19.
This will massively hurt the economy and growth projections. Dr Adam Mugume, the executive director of Research at Bank of Uganda has said Uganda will grow at less than 5%, down from the earlier projection of 6%.
If the lock down goes on beyond the current 14 days, the economy will likely suffer worse consequences. Uganda has 44 confirmed cases of the virus.