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CIVIL SOCIETY VIEWS ON THE NATIONAL BUDGET PRIORITIES. 2012/13 (II)

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CIVIL SOCIETY VIEWS ON THE NATIONAL BUDGET PRIORITIES. 2012/13 (II) Empty CIVIL SOCIETY VIEWS ON THE NATIONAL BUDGET PRIORITIES. 2012/13 (II)

Post by sol_drethedon on Mon Jul 16, 2012 10:10 pm

For most Ugandans what matters at the end of the day is whether there is money in their pockets to reduce their poverty conditions. The current macroeconomic strategy pursued by the government focuses on symptoms like the interest rate, curbing inflation and yet what we need to focus on are the links between gross domestic product-led growth and social progress. The neo-liberal macro economic framework, where fiscal policies revolve around maintaining small deficits, while monetary policy is fixated on a low inflation target of 5% and an exchange rate policy that is committed to full flexibility. Such policies are unlikely to accelerate growth and broaden the impact to eliminate poverty in Uganda.

We need to depart from the prevailing neo-liberal macroeconomic framework, by introducing two major alternative economic models that could be successful by tapping into the country’s full economic models that could be successful by tapping into the country’s full economic potential. One is a managed exchange rate regime to promote export competitiveness, maintaining short-term stability of the nominal exchange rate, which can reduce private sector uncertainty and facilitate public sector budget planning and achieve a local exchange rate that can foster broad-based export competitiveness and structural diversification of the economy. Secondly, a monetary policy that supports fiscal expansion and export promotion by achieving real rates of interest for private investment. Inflation control which places restrictions on money supply growth is in most cases difficult to manage. For instance, when the central bank purchases foreign exchange (and correspondingly sells domestic currency) in order to counteract currency appreciation, the domestic money supply grows.
In response, the Central bank sells government securities in order to mop up excess liquidity. However, this ends up canceling the potentially positive effect of the original blend of domestic currency.

Sectoral allocations also affect budget management in this country. Sectors such as water, health and agriculture which directly impact on the lives of the people, not only have inadequate funds but also their budgets continue to reduce. For instance, the budgetary allocations to agriculture which is the backbone of this economy reduced from 477.16 to 351.493 to 286.395 for the Fy2011/12, FY2012/13 and FY2013/14 respectively.
Source: MFPED BFP2012/13

Government needs to prioritize funding sectors that address the social needs of Uganda. The poor especially women and men rely mostly on public services and as such these services should be of quality and in quantity. When managing and implementing budgets, Ugandans do not care which political party is managing the budget but rather whether the budget provides quality services and opportunities for improved livelihoods.

COMPILED BY DON DRE.


sol_drethedon
sol_drethedon

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