*By John Kusolo*
In a comprehensive presentation to Kampala's key stakeholders on November 8, 2024, Lord Mayor Erias Lukwago outlined the complexities facing the Kampala Capital City Authority (KCCA) budgeting process. The meeting aimed to address financial, administrative, and legislative hurdles that KCCA encounters while attempting to secure adequate resources to manage Uganda’s capital city effectively. The issues identified highlight a significant need for collective action and stakeholder engagement to navigate the fiscal challenges that threaten the city’s governance and functionality.
1. Overview of the KCCA Budgeting Process and Legislative Framework
The Public Finance Management Act of 2015 mandates that KCCA submit its Budget Framework Paper (BFP) to the Ministry of Finance, Planning, and Economic Development (MoFPED) by November 15, marking the beginning of an intricate process that typically starts in September. During this cycle, KCCA aligns its budgetary framework with governmental planning priorities. However, KCCA’s adherence to this schedule has been challenged by multiple systemic issues, primarily stemming from delayed MTEF ceilings, budget cuts, and program-based budgeting constraints.
2. Devolution Conundrum: Authority vs. Division Urban Councils
The core of KCCA’s current budgeting challenges lies in the devolution issue. Although KCCA Council passed a resolution in 2016 to devolve specific functions to Division Urban Councils, limited progress has been made to operationalize sections of the KCC Act (2010, amended) which would grant these councils self-accounting status and allow them to manage individual budgets.
According to Lukwago, the absence of decentralization hampers operational efficiency and creates procedural bottlenecks. Despite recommendations for dividing Vote No. 122 into six votes (one for each division and KCCA itself), the central government has yet to make the necessary adjustments. This situation forces KCCA to operate under a unified vote and a single accounting officer, violating both the Public Finance Management Act and the KCC Act. Stakeholders have been presented with three options: pursue full devolution, adopt partial devolution, or continue the existing model until government reforms are enacted.
3. Property Tax Fund: An Untapped Revenue Stream
Lukwago also addressed the underutilized Property Tax Fund, a mechanism under the Local Government (Rating) Act of 2005 intended to support local infrastructure and essential services. Although KCCA collected over UGX 114 billion in local revenue in the 2023/24 fiscal year, of which property rates contributed UGX 57.9 billion, the fund’s allocations remain under the central government’s control rather than directly supporting local initiatives like garbage collection, road maintenance, and street lighting. This centralized approach has led to funding gaps, leaving essential services inadequately financed.
4. Budget Cuts and Unfunded Priorities
The KCCA budget for the 2025/26 fiscal year has faced severe reductions, down from UGX 803 billion to UGX 555 billion, complicating the implementation of KCCA’s strategic plan. Key unfunded priorities include waste-to-energy projects, market development, street lighting, road maintenance, ICT infrastructure, and physical planning. Lukwago emphasized that inadequate funding for these projects limits KCCA’s ability to transform Kampala into a functional and livable city.
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