Government has set out new budget discipline rules for accounting officers under a new Budget Discipline and Accountability Charter, with budget breaches expected to attract automatic administrative sanctions.
The Charter sets out rules governing the planning, budgeting and execution of public funds, including requirements on budget commitments, supplementary spending, domestic arrears, project readiness and recruitment.
The Finance Permanent Secretary and Secretary to the Treasury (PSST), Ramathan Ggoobi, said the new framework is intended to move government away from appeals for prudent use of public resources to a system based on enforceable rules and consequences.
Speaking during a meeting with accounting officers on Budget Discipline and Accountability Charter and Execution of the Budget for FY 2026/27 in Kampala on August 21, Mr Ggoobi said the Charter represents a deliberate shift from discretion to strict budget discipline.
“This reflects a deliberate shift from discretion to rules in how we plan, budget, execute and account for public resources starting this year,” Mr Ggoobi said.
The Charter sets out five non-negotiable rules that accounting officers are required to follow.
Under the first rule, “No Budget, No Commitment,” government entities will not be allowed to commit funds without an approved budget and verified cash limits.
The second rule limits supplementary budgets to three percent of a vote’s approved budget, with Mr Ggoobi warning that supplementary funding should not be used to compensate for poor planning. Accounting officers are expected to prioritise internal reallocations where possible.
The third rule provides for zero tolerance for domestic arrears, requiring government entities to avoid creating new arrears and to settle bills within statutory and contractual timelines.
Under the fourth rule, “No Ready Project, No Budget,” projects must have approved feasibility studies, costed designs and funding plans before they can be included in the Public Investment Plan (PIP).
The fifth rule bars recruitment where there is no approved wage provision. Mr Ggoobi said recruitment will only be permitted where there is an approved wage provision, a costed recruitment schedule and written clearance.
Mr Ggoobi said the Charter also establishes an Automatic Administrative Sanctions Framework under which breaches identified through audits, inspections or reviews by the Ministry of Finance will attract specified consequences.
These include withholding the next quarter’s releases, disciplinary action against accounting officers involved in off-system commitments and removal of poorly prepared projects from the Public Investment Plan.
He said the measures are aimed at strengthening accountability among accounting officers and preventing government entities from making financial commitments that are not backed by approved budgets, available funds or adequate planning.
The move comes as government seeks to strengthen resource management while pursuing its target of growing Uganda’s economy tenfold to USD500 billion by 2040.
Finance Minister Henry Musasizi encouraged accounting officers to be guided by the Public Finance Management Act Cap.171 and to be courageous to say no to actions that can put them in trouble.
Meanwhile, Mr Musasizi challenged Uganda’s financial sector to invest more in research on long-term patient capital, financial inclusion and the cost of credit as the country seeks to grow its economy tenfold by 2040.
Speaking at the second Annual Research Conference organised by the Uganda Institute of Banking and Financial Services (UIBFS) under the theme, “Financial Sector Research as a Catalyst for Uganda’s Ten-Fold Economic Growth Agenda” on August 21, Mr Musasizi noted that Uganda must mobilise more domestic resources to finance government obligations while preparing to manage expected oil revenues without distorting the economy.”
Budget discipline is a core requirement in delivering Vision 2040. Economic growth must also be inclusive such that people across different income levels participate in and benefit from the country’s transformation,” Mr Musasizi said.
He said government is prepared to use evidence generated through research to inform policy and decision-making.
Mr Musasizi identified digital finance and financial technology, capital markets, domestic revenue mobilisation, climate finance and green growth among other areas requiring research.
He also called on financial institutions to increase financing to the real economy by developing products suited to the needs of businesses and lowering the cost of credit.
The UIBFS Board Chairman and Diamond Trust Bank Managing Director Godfrey Sebaana stressed the importance of skills development, saying Uganda’s transformation will require a workforce equipped with skills relevant to the future economy.
“Research is necessary to enable the financial sector to develop better products that respond to the country’s economic needs,” he said.