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Uganda: Shock as Gov’t Slashes ICT Sector Budget by 74%

The Government of Uganda, which has previously vowed to promote use of modern technology to spur economic growth, has slashed the ICT Ministry’s budget for financial year 2020/21, by over 70%.

The sector budget was Shs 162.90bn but out of this figure, Shs 120.68 is being reallocated to other areas, implying a 74% cut.

This means critical areas which include ICT innovations, extension of internet to different parts of the country and strategic communication campaigns will be put on hold.

For example, MDAs have been told that they could in the short run use existing computers which “does not have a significant impact on the functionality of the respective MDAs.”

The entire budget of computer supplies amounting to Shs 100bn will be reallocated.

Government bodies were further instructed to “use existing computers which does not have significant impact on the functionality of the respective MDA.”

The advertising and public relations budget has been cut from Shs 58bn to Shs 35bn.

Treasury chief, Keith Muhakanizi said in a letter to all MDAs that Government institutions should “advertise at discounted prices through government owned media.”

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The Shs 20bn budget for books, periodicals and newspapers was chopped by almost 100%.

Muhakanizi told public offices to “explore having to get news using online platforms.”

Ironically, the same government rolled out cuts on travel inland and travel abroad and printing, saying MDAs should work using ICT whose budget has also been slashed.

Proposing cuts to almost all office and small office supplies as well as furniture and yet planning for offices to readjust for social distancing to prevent the spread of Coronavirus has left many puzzled.

“Clearly 2020/21 will be for government official earning wages without commensurate activity,” said an official who preferred anonymity to speak freely.

Role of ICT

Delivering the budget speech which he described as a “just a formality,” Finance Minister Matia Kasaija said government is planning for the “digitalization” of many aspects of socio-economic activity to improve efficiency and reduce costs.

“This can be applied through e-Commerce; e-Government (including tele-conferencing, procurement and the dispensation of justice); e-Learning; robotic automation, artificial intelligence, cyber security and cloud computing; and digital marketing in tourism. This permits to fast-track implementation of the Fourth Industrial Revolution (4IR),” said Kasaija.

And in his state of the nation address, Museveni recognised ICT alongside Agriculture, as a key sector that will spur economic recovery.

ICT industry players say it is unfortunate that government went ahead to implement a 74 percent slashing of the ICT ministry’s budget especially at a time the country is grappling with the COID-19 pandemic.

Globally, ICT has been recognized a key enabler in the fight against Covid-19 and ignitor of recovery in economies.

“So instead of slashing the budget by 70%, we should be exploring how to spur the continued growth of ICT in the nation. I do acknowledge that austerity measures are required especially following the natural disasters we’ve had, however, ICT  should be spurred as it will support economic recovery,” said an ICT industry player who spoke on condition of anonymity for personal reasons.

“With a recorded growth rate of 25% when compared with other sectors in the economy, this aggressive growth should be safeguarded and spurred.”

The sector has created an enabling environment that has seen significant growth seen in areas of mobile communications, computer applications, information processing, storage and dissemination as well as financial inclusion using mobile telephony platforms, e-finance, global connectivity and online trade.

For example, the contribution of ICT sector activities to the real national GDP accounted for 9.8% in FY2017/18 compared to 9.6% in FY2016/17 while its contribution to Government revenue totaled Shs. 946.4bn (6.5%) of total Gross Revenue collection in FY2017/18.

It’s this revenue that the central government uses to pave roads, extend water and electricity to rural areas and procure defence equipment.

The refocusing of the budget was done by COVID-19 Taskforce on food security under the coordination of Operation Wealth Creation (OWC).

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