Introduction

1. The Data needs ofThe Parliamentary Budget OfficeOpportunities and Challenges(The Uganda Case)The Association of Budget Offices ConferenceMontreal, Canada 17th -19th June 2013Presented byWanyaka Samuel H.Director – Parliamentary Budget OfficeJune 2013

2. Introduction • The Presentation is to: • Highlight the reforms in Uganda’s Budget Process; • Inform the participants about the types of analyses carried out the Uganda PBO. • Indicate the data needs of the Uganda Parliamentary Budget Office. • Outline the basic sources of data for the PBO. • To highlight some challenges for obtaining data. • Efforts to overcome the challenges. • Conclusion.

3. Laws Regulating the Budget Process • The Budget Process in Uganda is regulated by a legal framework that includes the following among others:- • Constitution, • Public Finance and Accountability Act 2003, • Budget Act 2001 (copy available) and • Other laws and regulations which provide mandates for economic activities • such as the Local Government Act e.t.c and so on.

4. The Budget Act (1) • Arose out of a private members bill and found popular support in Parliament; • This law was aimed at making the Budget process more transparent, participatory and all inclusive; • It mandates early and continuous participation of parliament in the entire budgetary cycle and; • Provides opportunities for all stakeholders to actively participate in the budget process.

5. The Budget Act (2) The Act establishes among others; • A Budget Committee of Parliament, which comprises all chairpersons of other Parliamentary Committees as ex-officio members whose role and functions include budget scrutiny and oversight. • The Parliamentary Budget Office, whose role and functions are a subject to be discussed in this paper.

6. Functions of the Budget Committee • Focusing on the preliminary estimates and the macroeconomic plan and programs and submitting the recommendations to speaker. • Considering the National Budget and compiling amendments and referring them to the relevant Committees. • Carrying on such other functions relating to the Budget as may be assigned to it by Parliament under this Act or other laws.

7. The Parliamentary Budget Office (PBO) • It is established by the Budget Act as technical department for providing Parliament and its Committees with, • Objective • Timely and • Independent economic and financial analysis of the economy and the national budget in order to advise parliament and support its budget oversight roles.

8. Specific Functions of PBO (1) • Providing an up-to-date budget-related information to all Committees in relation to their jurisdiction • Submitting reports on, but not limited to, • economic forecasts, • budget projections and • options for reducing the budget deficit; • Identifying and recommending on Bills that provide an increase or decrease in revenue and the Budget; • Preparing analytical studies of specific subjects such as financial risks posed by Government sponsored enterprises and financial policy; and • Giving technical advice to Parliament and Committees on the economy and the budget.

9. Structure of PBO • The functions of Budget Office fall under two divisions namely • Macroeconomics and Sectoral Analysis • Fiscal Analysis and; • A Financial Programming Section

10. Staffing of PBO • The Parliamentary Budget Office is staffed with professional staff as stated by Section 20 of the Budget Act. • Indeed, while PBO’s activities are spelt out in the Budget Act, Parliament as a whole and its Committees make requests for advice or analysis on any issues related to the budget and economic performance. • This makes the PBO the prime source of Budgetary and Economic information for Parliament and its Committees.

11. Analysis Carried out by PBO • Budget Analysis broadly refers to • examines the extent to which the revenue and expenditure targets meet the set objectives and levels of budget deficits that results • Economic Analysis:- Dealing mainly with the performance of the Economy. • Eg. Inflation, Employment, GDP growth, BOP, Interest rates, exchange rates, Money demand and Supply.

12. Analysis of the Resources (Revenue) Side • The Budget Office assists members of parliament to analyse the resource side of the budget, which is governed by the main objective of mobilizing funds for meeting public expenditure. • These resources measures include, • domestic resources from taxation revenue (comprising income tax, Value Added tax (VAT), • International trade taxes, • local excise taxes), • non-tax revenue and • local borrowing from both bank and non bank sources. • There are also External Resources from Loans and Grants.

13. Objectives of taxation • Apart from resource mobilization, taxation may have other objectives, whose impact PBO advises Parliament about, such as:- • Regulation to correct market imperfections, • Guiding and redirecting economic activities of Production, and Investment and Consumption, • Industrial protection, • Public safety, • Strategic motive, • Equity in resource distribution and • Asserting Administrative Authority

14. Analysis of Expenditure Side • Public expenditure refers to the process by which the government expends its resources to achieve the various national objectives. • Public expenditure is largely governed by specific objectives such as • The need to correct market failures • Provision of governance • Strategic considerations • Social welfare/wellbeing • Strategic interventions etc.

15. Budget Deficit • A combination of revenue and expenditure yields an important variable known as the budget deficit. • The budget deficit occurs when domestic resources cannot fully fund the desired expenditure. • The deficit can be funded by local sources or external sources. • Each method of funding the deficit has implications on the macroeconomic objectives.

16. Macroeconomic objectives include: • Low and stable inflation (the rate at which prices rise affect the well-being of people especially the fixed income earners and disrupt planning both for government and private individuals and entities. • Employment creation. • Low and stable interest rates to promote investment. • Stable exchange rates to promote exports. • Reasonable level of foreign exchange reserves for any eventual international shocks etc..

17. Data needs of PBO • The main data needs of PBO include • Data on Performance of the Budget Financing i.e Resources projections, approved and outturns of:- • Tax, Non-tax, Loans, Grants, Arrears; • Data on Performance of the Budget Expenditure i.eExpenditures projections, approved and outturns of:- • By Sector and Agency and Economic Activity • Data of expenditure in relation to planned objectives and activities. • Data on releases of funds against budgetary allocations to various spending units. • Data on resource outturns against the projections. • Data on physical outputs of various forms of public expenditure through physical inspection and public hearings by identifying potential for budgetary wastes and leakages. • Data on the Performance of the Economy such as Inflation, GDP sector performance, Monetary data, financial data, external sector data.

18. Sources of data for the PBO. • Submissions of Government reports to Parliament; • Uganda Revenue Authority; • Uganda Bureau of Statistics; • The Central Bank of Uganda; • Public hearings of Committees; • Field oversight visits by staff and Committees; • Petitions and Memoranda to Parliament; • Public Libraries; • Internet resources.

19. Challenges for obtaining data. • Inadequate capacity and resources to obtain primary data hence reliance on secondary data; • Inadequate analytical capacity of staff; • Inadequate equipment for Analysis by staff; • Lack of protocols for online access to Government databases; • Delay and reluctance of agencies in providing data and information; • Un availability of data by agencies; • Large and widespread informal sector.

20. Efforts to overcome the challenges. • Training and equipping for staff of PBO; • Obtaining secondary data from relevant departments; • Use of powers and privileges of Parliament laws to obtain data; • Using assumptions to estimate where data is not available; • Compelling user departments to compile relevant data; • Encouraging formalization of the informal sector (An area where we need support); • Creating a databank of Key economic and Social Variables within PBO

21. Conclusion • The analysis and advice offered by Parliamentary Budget Office (PBO) is objective and impartial. • The technical content of the advice is not influenced. Any Committee Chairperson or Member of Parliament may put a request for analysis or advice to the PBO. • PBO does not manage the budget of the Parliamentary Commission, but advises Parliament on budgets of all public agencies. • A number of challenges in its operation still exist but PBO have served as a model. • Many Parliaments in Africa who have taken lessons to learn from us make their own systems better. • The Public Finance Bill 2012 before Parliament seeks to repeal the Budget Act, we need community support and prayers.

22. Thank you for your attention.