The Ugandan government has unveiled its plans to allocate Shs23.4 trillion towards servicing its escalating public debt, which is poised to breach the Shs100 trillion mark. The details were presented in the Budget Framework Paper during a session with the House Committee, shedding light on the government’s expenditure blueprint for the upcoming 2024/25 Financial Year.
The Commissioner for Accounts at the Finance Ministry, Mr. Stephen Ojiambo, emphasized that this substantial allocation aims to mitigate the risk of accumulating high-interest rates on existing loans. Additionally, the government has earmarked Shs197 billion for the construction of the International Specialized Hospital Uganda (ISHU) in Lubowa. The Budget Framework Paper outlines the allocation as “four promissory notes under the ISHU project and two bills of exchange for Roko [Construction Company] share purchase.”
The ISHU project has been surrounded by secrecy, prompting questions about its progress. However, State Minister for Finance, Mr. Henry Musasizi, assured the parliamentary Finance Committee that all necessary information is available and can be shared, including payments made to date and future obligations.
Last December, Mr. Musasizi presented a Shs52.7 trillion Budget Framework Paper, projecting the government’s financial outlook for the incoming year. The paper revealed increased expenditure on external amortization due to significant repayments on projects like Karuma, Isimba, Kabaale Airport, Afrexim budget support, Standard Bank Support, and TDA/PTA budget support. Additionally, Shs247 billion is allocated for the first installment of the $325 million compensation to the Democratic Republic of the Congo for losses during the 1990s conflicts.
Lawmakers’ Concerns and Dismay
Members of the Finance Committee expressed dismay over the government’s prioritization of settling foreign arrears while neglecting domestic creditors, who are owed approximately Shs7.7 trillion. Mr. Basil Bataringaya highlighted the minimal provision of Shs200 billion in the Budget Framework Paper for domestic arrears, estimating it would take 39 years to settle the existing debt at this rate. The government acknowledged the need to address these arrears but emphasized the dynamic nature of the situation.
The enactment of the Anti-Homosexuality Act, 2023, added a layer of uncertainty, leading to escalated negotiations with the World Bank to lift the funding freeze on Uganda’s projects. Junior Finance Minister Musasizi acknowledged the challenges posed by the new legislation.
State House Priorities Unveiled
In a surprising turn of events, it was revealed that the State House is seeking Shs57.14 billion for the procurement of cars, household items, and security equipment for the presidency. This request, presented before the Committee on Presidential Affairs, surpassed the Shs21.7 billion initially appropriated for State House in the Budget Framework Paper.
The breakdown of the requested funds includes Shs14.40 billion for the refurbishment of Entebbe State House, Shs13.46 billion for security equipment, Shs6.54 billion for vehicle purchases, and Shs8 billion for international travels. Additionally, Shs30 billion is sought for donations, Shs4.2 billion for increased wage needs, and Shs16.9 billion to cover staff allowances.
Despite the allocation of Shs421.92 billion in the 2024/25 draft of the national budget, questions arise about the transparency and justification of the substantial funds requested by the State House.
