devinit-新冠肺炎爆发前和爆发期间乌干达的国内资金流动（英）-2021.7-25页_783kb

Summary of "Domestic Financial Flows in Uganda before and during Covid-19"

Core Content

This document provides an in-depth analysis of Uganda's domestic financial flows, particularly focusing on how the government managed the economic and social impacts of the Covid-19 pandemic. It evaluates the allocation of resources to key sectors, the evolution of domestic revenue collection, the growth of public debt, and the implications of these trends on poverty and development outcomes.

Main Findings

• Government Response to Covid-19:

  • Uganda implemented strict lockdown measures, including a three-month total lockdown in 2020, which had a severe economic impact.
  • The country faced a second wave of the pandemic with high infection and death rates due to vaccine shortages and strained healthcare systems.
  • The government launched a food distribution campaign, an economic stimulus package, and a domestic fundraising platform called the "national response fund to Covid-19".
  • External borrowing increased significantly, including loans from the World Bank, IMF, and ADB, to address revenue shortfalls and rising expenditures.

• Sectoral Budget Allocations:

  • Interest payments remain the largest portion of the budget, receiving nearly one-third of total allocations.
  • The security sector saw a significant increase in funding, moving from sixth to third most funded.
  • Pro-poor sectors such as education, health, agriculture, and social development did not receive a significant shift in funding priorities during the pandemic.
  • Social development, in particular, experienced a 15% decline in planned allocation during FY2020/21, despite the heightened vulnerability of its target groups.

• Pro-Poor Sector Funding Gaps:

  • Despite nominal increases in some pro-poor sectors, the share of the national budget allocated to them has decreased.
  • Education faced a 38% funding gap in FY2020/21, allocating only 63% of its required budget.
  • Health also experienced a 38% funding gap, with only 64% of required funds allocated in FY2019/20.
  • Agriculture had an 18% funding gap, with only 37% of required funds allocated in FY2019/20.
  • Social development has consistently been underfunded, with allocations stagnating at 1% of the total budget.

• Domestic Revenue Trends:

  • Domestic revenue collection increased from UGX 11,231 billion in FY2015/16 to UGX 16,752 billion in FY2019/20.
  • However, the growth in FY2019/20 was the lowest at 0.18%, compared to a five-year average of 11.65%.
  • A 18% shortfall in tax revenue was recorded in FY2019/20, with the government falling short of its revenue targets.
  • The pandemic led to a 16% projected shortfall in FY2020/21, forcing reliance on external sources.

• Public Debt and Debt Servicing:

  • Public debt reached 50% of GDP by the end of FY2020/21, indicating a potential risk of unsustainability.
  • Debt servicing, which includes interest payments and amortisation, consumed more than double the combined allocation to the five key pro-poor sectors.
  • The country is at risk of debt distress due to the increasing debt burden and the continued reliance on external borrowing.

• Implications for Poverty and Development:

  • The lack of adequate funding for pro-poor sectors has weakened the government's ability to support the most vulnerable populations during the pandemic.
  • Funding gaps in education, health, and agriculture have undermined efforts to reduce poverty and improve development outcomes.
  • The government is urged to focus on improving domestic revenue mobilisation and prudent fiscal management to avoid long-term debt sustainability issues.

Recommendations

• Short-term:
  • The government should rely more on external funding to address immediate needs in service delivery and development financing.
• Medium-term:
  • Urgent measures are needed to increase domestic revenue collection and improve fiscal management to reduce the debt burden.
• Long-term:
  • Innovative and sustainable domestic resource mobilisation strategies should be adopted to create fiscal policy space and support pro-poor development.

Key Sectors and Trends

Conclusion

The paper concludes that while Uganda's response to the pandemic was initially effective in containing the virus, the economic consequences have been severe. The government's focus on debt servicing and security has come at the expense of pro-poor sectors, exacerbating poverty and development challenges. A shift in policy priorities is essential to ensure that the most vulnerable groups are not further marginalised and that Uganda can achieve its long-term development goals.