External budget support

From the external sources, Mr Kasaija projects that Shs2.9 trillion will come from budget support and another Shs9.6trillion will come from project support.

Budget support is a method of financing the budget through a transfer of resources from an external financing agency to the partner government's national treasury.

The government intends to fund the budget by 72.5 per cent while 27.5 per cent will come from the external pool.

Traditionally, Mr Mugunga explained that donors have provided aid either through the financing of specific projects (project aid), which often involved direct participation in their design and implementation, or through providing support to the recipient government's budget (conditional budget support) while imposing conditionality on how to allocate the available resources.

Parliament has already noted with concern that the country's total domestic revenue (inclusive of Local Government Revenue) in the 2020/21 financial year accounts for only 48.2 per cent of the projected resource envelope, leaving the country with unsolved shortfalls.