KAMPALA – Players in the education sector have embarked on an ambitious study to generate evidence that will help close the gray areas in the country’s education financing.
Speaking at the study validation exercise in Kampala, Emmanuel Wafula, the National Project Officer at Action Aid International Uganda (AAIU) said the study will come up with suggestions on how the Uganda government can expand its tax base to raise the much-needed revenue required to fund the education sector.
Wafula the study being conducted by economic consults will generate proposals, and beef up Civil Society’s advocacy efforts on how to increase financing for the education sector.
“When we understand where the loopholes are, in terms of tax holidays and how taxes are affecting the common people in terms of the tax regime that the government is pursuing, it will help us to be able to come up with proposals and beef up our advocacy on how to increase financing for the education sector,” Mr. Wafula said.
Preliminary study findings show that Uganda’s Financing of Education involves various sources including government and development partners through loans and grants.
Internally generated funds, raised by schools and institutions, also contribute to education financing.
The findings also show that the need for improved infrastructure and teacher welfare, public expenditure on education as a percentage of the Gross Domestic Product has averaged at 2.04% over the last decade.
It also shows that the changes in financing have been driven by both demand and supply factors, with an emphasis on addressing existing challenges to improve the quality of education services delivered.
Eddie Kayinda, a private economic consultant says that due to the swelling population, it will increasingly become difficult for authorities in Uganda to prioritize the sector to equally upward debt trajectory.
Uganda’s debt has increased from UGX 80.1 trillion in 2022 to UGX89.7 trillion in 2023-24.
“Uganda government is finding it very difficult to finance internal debt because most of this is brought from non-concessional lenders and commercial banks whose interest is business than national services,” Mr. Kayinda said.
He said that the study findings show that the Uganda Revenue Authority is not collecting enough revenue that is closer to the budget that is needed to finance debt.
Kayinda revealed that money being borrowed from the IMF and World Bank, the major providers of external debt in Uganda, is being diverted to other things.
“It seems like the budget is being used to finance politics instead of services and this is not a position the government would want to go into in terms of ensuring that their people are better,” he said, noting the studies indicate that almost 50% of Uganda’s budget is spent into corruption.”
“IMF should put Uganda to task, to develop internal accountability mechanisms to ensure that the money being borrowed does what it is supposed to do.”
He urged IMF and other major lenders to move away from politicization of aid to accountability of aid.