Members of Parliament on the Budget Committee have voiced growing apprehensions about Uganda’s mounting debt burden, pressing the Ministry of Finance, Planning, and Economic Development for strategies to effectively manage this fiscal challenge.
State Minister for Finance, Henry Musasizi, revealed that the total debt stock as of June 2023 reached $23.7 billion (sh91 trillion), a notable increase from December 2022 when it stood at $21 billion (sh80 trillion). Musasizi presented this information during the discussion of the National Budget Framework Paper for the financial year 2024/2025 – 2028/2029 before the committee, chaired by Patrick Opolot Isiagi.
Despite the surge in public debt, Musasizi assured the committee that the government is adeptly allocating resources and practicing limited borrowing in critical areas to manage the financial strain. He disclosed plans to allocate sh200 billion in the financial year 2024/2025 to address part of the sh2.7 trillion domestic arrears recorded as of June 2023.
MP Paul Omara raised concerns about conflicting figures on public debt, with the Auditor General’s report citing sh96 trillion, while the Ministry of Finance reported shs86 trillion. The discrepancies were attributed to potential issues arising from instability in exchange rates.
Dicksons Kateshumbwa flagged concerns about domestic debt repayments, surpassing the target outlined in the Charter of Fiscal Responsibility. He emphasized that debt repayments are consuming a substantial portion of the country’s revenues, urging measures to align with the projected range.
MP Iddi Isabirye urged the minister to evaluate the performance of approved loans, emphasizing the importance of assessing their implementation.
The secretary to the treasury, Ramathan Ggoobi, defended Uganda’s debt sustainability, citing participation in international credit markets and effective risk management strategies. Ggoobi highlighted the country’s positive macroeconomic management and emphasized that Uganda’s fiscal deficit is reducing, aided by growing tourism receipts and exports.
MP Alex Ruhunda called for the Ministry of Finance’s robust intervention in the tourism sector, recognizing its recovery from the impacts of Covid-19 lockdowns.
