Tuesday, September 30, 2014



On June 12th, 2014, all the East African Countries, presented the 2014/15 budget proposals that are all geared at promoting economic growth and development.  RWECO as a pro-poor focused civil society organization located in Rwenzori region, Uganda, has taken a keen eye in finding out how the 2014/15 budgets are tackling food security to answer the big questions looming in the East African Community of ensuring food security for increased productivity and growth.
Table1: EAC, budget Allocations
2013/14 (shs)
2014/15 (shs)
2014/15 (US$)
UgSh13.06 trillion. 
UgSh14.36 trillion
Ksh. 1.64 trillion
Ksh1.77 trillion
Tzsh.18.25 trillion
TzSh19.5 trillion
Rwf1.6773 trillion
Rwf1.75 trillion

NB: Burundi budget is not aligned to the rest of the EAC countries.
Fig. 1: 2014/15 FY: EAC Budgets in US$ (bn)
Source: Calculations from the 2014/15 budget speeches
Kenya has continued to be the biggest EAC economy followed by Tanzania as indicated in the fig.1.  In the EAC regional Governments have taken it upon themselves to present the budget estimates on the same day and time, save for Burundi which has a different budget arrangement.  However, as we note from the Fig. 1, the 2014/15 budget estimates for all the four countries increased slightly. 

The case of Uganda, the budget has hit Ugx. 15 trillion with an estimated growth of 6.2%. While we are all happy with the growth, agriculture as a backbone to development has remained underfunded thus resulting into the food security questions. In the horn of Africa, Uganda is believed to be the food basket but the budget allocations to Agriculture in the 2014/15 was 3.1% of the total budget which is far below the  10%  Maputo (2003) recommendation  to the Agriculture sector.
Table 2: What the place for Agriculture in the 2014/15 EAC Budgets : Ensuring food security
2014/15 (shs)
UgSh14.363 trillion
Ugsh. 473.66bn
Ksh1.77 trillion
Kshs 3bn
TzSh19.5 trillion
Tzsh. 1,084.7 bn
Rwf1.75 trillion
Rwf170.3 bn

Source: EAC Country 2014/15 FY Speeches, Ministrial Policy Statements ( June, 2014

Fig. 2: EAC Countries 2014/15 Budget  (US$M)Allocation to the Agriculture Sector
Source: Calculations from 2014/15 budget allocations

The case of Uganda.

Agriculture Production and Productivity….agriculture and agribusiness is a
priority to Government to create jobs, improve productivity and expand exports in the medium term. The sector employs 70 percent of the Uganda’s labour  force, and contributes about 21 percent to the GDP. Government plays an important support role to ensure  value for money and lower the cost of doing business”. ( Budget Speech, 2014/15, Uganda)

Source: MAAIF, Ministerial Policy Statement FY2014/15

Source: MAAIF, Ministerial Policy Statement FY2014/15

Whereas, government opines that, Agriculture employs 73% of the Uganda’s labour force, budget allocations of Ugx. 473.66bn will not meet the envisaged targets of ensuring increased productivity compared to Tanzania’s  Tzsh. 1084bn to support irrigation, and Kenya’s  Ksh. 3bn for agriculture inputs. The Ugx. 473.66bn, represents 3.3% of the total budget far less than what other EAC countries have allocated to the Agriculture sector. The last harmer that broke the camel’s back was for President to transfer  NAADs program that was employing close to 4513 youths to the army as the NAADs technical team had created a structure of ‘human beings’ having wasted tax payers money on salaries and  workshops.  The president during the address of the nation castigated NAADS technocrats for having hijacked the program and instead allocated 70% of the budget to salaries of staff, workshops, monitoring e.t.c. The big question is, where will the over 4513 youths employed by Naads go despite the challenges faced? We need to engage government on that and not to cause a vacuum in solving one problem.

Snap shot of the NAADs Activities: 2014/15

NAADS Services 2014/15

In the 2014/15, NAADs services budget was drastically decreased from Ugx. 104.34 bn to 68.87 bn, a shift in the right direction but we also note that, NAADs district wage was increased from Ugx. 26.90 bn to Ugx. 62.37 bn. We question why money is moved from one vote but being transferred to the wage vote indicating that the cost of running NAADs is still high (42%) compared to what will go to the farmers ( 46%). While NAADs was presumably overhauled, the farmers are still getting leap services given the high wage bill at NAADs secretariat and the district wage bill. If we must realize value for money, all these anomalies must be addressed in favor of the peasant farmers who are the beneficiaries.
The Agriculture allocation in the 2014/15 budget is short of the Maputo 2003 declaration of 10% and also the Kyankwanzi 2011 NRM caucus to increase the agriculture sector budget to 4.8% till the target of 10%

Taxing the Agriculture inputs will hurt the poor women and men:

Terminated exemption on interest income on agricultural loans. The measure is expected to generate sh25.1b. Terminated exemptions on the following supply with effect  from 1st July 2014:-
i. Supply of Feeds for Poultry and Livestock
ii. Supply of Agriculture and Diary Machinery
iii. Supply of Packaging Materials to the Diary and  Milling Industries
iv. Supply of Specialized Vehicles, Plant and Machinery  services and civil works related to roads and bridges construction, agriculture, water, education and  health.
The above measures are projected to generate sh215b and  the details are contained in the VAT (Amendment Bill) 2014.
 Termination of the exemptions VAT zero-rated supplies with  effect from 1st July 2014:-
v. Supply of cereals, grown, milled or produced in Uganda
vi. Supply of processed milk and milk products
vii. Supply of Machinery and Tools for Agriculture
viii. Supply of Seeds, Fertilizers, Pesticides and Hoes
RWECO has observed that, the above taxes if implemented in their current form will further stifle the agriculture sector that employs 73% of the labour force who derive their livelihoods. The taxes slapped on Agriculture inputs will further curtail the developments in the agriculture sector that is already underfunded by government. CSOs need to engage with government to identify other tax alternatives including increasing taxes on  betting, the music industry and bear and cigarettes  among other measures.

The taxes imposed on agriculture inputs will hurt the grassroots women and men who derive their livelihoods from subsistence farming, this category of people are susceptible to economic shocks. Other taxes on basic needs like paraffin of shs. 200/ will have much impact on the poor than the middle class.  The Ugx. 50/  exercise duty on petrol and diesel will have a further indirect increment on the cost of living  as trader will transfer the burden to the final consumer who is an average citizen. Overall, the poor will suffer the tax burden as the traders will transfer the tax on commodity prices. As we move towards the 2016 general elections, citizens need assurance of a fair and free elections both in the pre-election, during elections  as these elections have a direct impact on the economy as evidenced in the post 2011 elections.

Proposals for a pro-poor 2014/15 budget
·         Government to engage with all stakeholders before NAADS is re-directed to UPDF  to identify alternatives for the over 4513 youths who are employed and their dependents will fill the burden more;
·         Revise the excise duty on kerosene and instead increase the tax on betting since its counter productive;
·         Scrap the tax on agriculture inputs as the tax will have a direct impact on food security and employment in the agriculture sector;
·         Harmonize the taxes proposed with the rest of the EAC countries as indicated in fig 2 above.
 Uganda as a food basket in the horn of Africa has the capacity to increase food production if more resources were allocated to the Agriculture sector and focus put on water for production. The tax policies proposed in the 2014/15 budget are likely to hurt the grassroots men and women the more given that they derive their livelihoods from subsistence  agriculture. Moving from subsistence farming requires deliberate efforts by government and the private sector to invest both human and financial resources.
RWECO will continue to work with the CSBAG platform to engage with government in order to come up with pro-poor tax proposals that will not hurt a bigger percentage of the population given that if the tax proposals are implemented in the current form, the grassroots citizens will suffer as  traders will transfer the tax burden to the final consumer .

Jimmy Baluku Odyek MA –Development Studies (Poverty Studies and Policy Analysis)
Coordinator RWECO and a partner with CSBAG
RWECO is a consortium of: Kali, Good hope foundation for rural development, RIDE AFRICA and RICNET: http://rwecovoice.blogspot.com/ , http://somaschools.blogspot.com/ http://ricnet.co.ug/ http://www.ride-africa.org/

Monday, September 22, 2014


On the 18th and 19th September 2014 , RIC-NET joined RWECO, KRC, NDI, CEDU and NGO Forum to organize and facilitate at the Rwenzori regional consultative meeting on "free and fair elections" that was held at Kagote SDA hall in Fort Portal.

The two day consultative meeting aimed at building consensus on issues for reform and coming up with  citizens proposals and concerns on free and fair elections and other development issues in the Rwenzori region that will be further discussed in the national consultative meeting on free and fair elections.
The meeting was attended by over 200 participants from the 7 districts of the Rwenzori region of Kabarole, Kyenjojo, Kasese, Bundibugyo, Kamwenge, Kyegegwa and Ntoroko Districts. The participants included the RDCs, MPs, District chairperson LC5, religious leaders, political party representatives, representatives of PLWDs, academia, students from universities, cultural institutions representatives, youth representatives, women groups leaders, trader unions and farmers group representatives.

participants  made resolution concerning the independence of the electoral commission; representatives of special groups; democracy under political parties;  relationships of citizens and the elected leaders; the electoral process from registration, campaigning,voting, counting of votes and tallying; nomination fees of different elected leaders positions; demarcation of constituencies; access to media during the electoral process;age qualification of different office bearers; form of government after the general election;tenure of office of the elected leaders; requirements of civil servant in relation to being elected leaders, role of armed forces in the electoral process, decentralization of powers and resources; protection from property deprivation and appointment of constitutional commissions. the citizens resolve to use their resolution as key demands from their members of parliament when the bill on electoral reforms is tabled in parliament.

Tuesday, September 16, 2014

Parliament set to scrap taxes on agricultural inputs

Publish Date: Sep 16, 2014
Parliament set to scrap taxes on agricultural inputs
A group of farmers pose for a photograph with the speaker Rebecca Kadaga with copies of their petition to parliament calling for withdrawal of taxes on agricultural inputs in Uganda August, 26, 2014. PHOTO/Maria Wamala


By Umaru Kashaka   

The House is today poised to adopt a finance committee report that recommended that the proposed 18% Value Added Tax (VAT) on agricultural inputs and equipment be scrapped.

While reading this year’s budget, finance minister Maria Kiwanuka proposed an 18% VAT on agricultural supplies such as hoes, fertilisers, seedlings and tractors in order to generate sh30.4b, about 0.2% of the entire budget.

However, the committee, chaired by the Kyadondo North MP, Kasule Sebunya yesterday evening presented its report saying the proposed taxes would kill the agricultural sector that is struggling with a meagre growth of 1.5% to increase the use of agro-chemicals, improved seeds and fertilisers.

“Application of VAT on agricultural supplies will make the situation worse, especially in rural areas and hinder the mechanisation of agriculture in the country,”Sebunya told the plenary session presided over by Deputy Speaker Jacob Oulanyah.

Oulanyah adjourned the debate on the committee report to today at 10:00am, but this was after allowing the shadow finance minister and Tororo County MP Geoffrey Ekanya to also present his minority report rejecting VAT on salt.

“Ugandans, especially in rural areas, will suffer from goiter disease because the new tax would make the salt inaccessible,” he warned.

In trying to preclude another move by the House to scrap their new tax measures for this fiscal year, the finance ministry is expected to put up a strong defence for this VAT, especially riding on the argument of broadening the tax base.

The MPs two days ago dropped the new tax of sh200 per litre on kerosene that was intended to raise about sh15b to roll out solar energy in rural areas. 

There are fears that if Parliament rejects this 18% VAT, the government may not be able to generate the sh15 trillion needed to finance this year’s fiscal budget.

Also related to this story

Army to monitor distribution of agriculture inputs

 Accessed on Wednesday 17th September 2014 from:http://www.newvision.co.ug/news/659781-parliament-set-to-scrap-taxes-on-agricultural-inputs.html 

In the most recent policy advocacy RWECO analysed the Agriculture Ministry, Ministerial Policy Statement for the financial year 2014/15 that was presented to the stakeholders at the CSBAG that gave a basis for the farmers to petition the speaker of parliament to scrap VAT on Agriculture inputs. RWECO will continue to engage with stakeholders at District and National level to bring hope to the poor farmers who bare most of the taxes imposed by government.

Follow the link to the RWECO MPS Analysis:https://www.dropbox.com/s/zmlz4n9jp8if83v/A%20CLOSE%20LOOK%20AT%20THE%20EAST%20AFRICAN%20COUNTRIES%202014.pdf?dl=0

Tuesday, September 9, 2014


The communities in Kamwenge district questioned how the Shs. 268Million was spent on just two maternity wards that could even cost less in the public eye. The RDC of Kamwenge district took interest in the community concerns by joining RWECO, KALI and the community monitors in monitoring the projects in Kiyagara HCII, Kahungye Sub county, and Kanara HCII, Kanara Sub county,

The monitoring team sharing notes
The Kiyagara HCII Maternity ward that will cost shs. 192Million
Key findings at Kiyagara HCII, Kahungye Sub county:

Contractor: YANKA Enterprises limited
Work started  on 22/03/2013
Main building  at shs.192,185,200
Placenta PIT   shs.2,000,000
Medical Pit  shs.2,000,000
3 stance latrine shs.9,000,000
Total cost  is shs.201,185,200
Kiyagara receives 600,410  per quarter  servicing 1000 patients from 7 Parishes per month
 Unfinished works at Kiyagara HCII

Grinding the flour
Internal door  shatters
Electrical  Installations for solar and Hydro
Plumbing and Drainage
Medical waste pit

Kanara HCII
Kanara HCII, that will cost the tax payer shs. 203 million
Contractor: Block Technical services
Work started on 22/03/2013
Preliminaries  at shs.27,500,000/=
Maternity Ward shs. 203,020,200/=
3 stance latrine shs. 17,618,330/=
Medical Waste and Placenta Pit  2 x  7,000,000= Shs. 14,000,000/
Total shs.262,138,330Actual in the Agreement is shs. 263,138, 530/=
Is   there value for money  by spending shs.201,185,200 on Kiyagara and shs.263,138, 530/= on Kanara for the  same work?
Did the service user  follow the ministry of health specification on maternity ward construction?
Will the maternity ward serve high population
What is the implication of paying  a  3 stance latrine  at shs. 9,000,000/= in Kiyagara  and shs.17,618,330/= at Kanara?
A pit latrine that will cost the tax payer shs. 14M
 What about  Placenta PIT   2,000,000 in Kiyagara and 7,000,000 at Kanara? 

Getting instant feedback from the community during the joint monitoring exercise at Kiyagara HCII, Kahungye S/C,

Compiled by
Geofrey Bwambale and Angella Biira
KALI Staff