Kasaija: Uganda Won’t Indefinitely Borrow, Urges Financial Caution

kasaija uganda wont indefinitely borrow urges financial caution
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Finance Minister Matia Kasaija emphasized that the government cannot sustain indefinite borrowing, especially for requests that can be deferred or postponed. Speaking at a pre-budget dialogue for the 2024/25 financial year organized by the Civil Society Budget Advocacy Group, he addressed concerns about the growing public debt and its impact on the economy.

Mr. Kasaija highlighted the need to prioritize sectors based on their weight and impact, acknowledging that there will always be demands but insisting on responsible financial management. He mentioned the challenge of constant supplementary budget requests, expressing a commitment to curbing such practices to avoid increasing public debt.

Civil society organizations raised concerns about the ballooning public debt, which reached Shs96 trillion by June 2023. The Auditor General reported that domestic debt accounted for Shs43.6 trillion (45.4%), while external debt was Shs52.4 trillion (54.6%). This debt places pressure on domestic revenue, projected to decline to Shs21.7 trillion in the 2024/25 financial year.

Debt servicing, a major budget allocation, is expected to rise to Shs3.2 trillion in 2024/25, affecting funding for priority sectors. Minister Kasaija attributed the challenges to fiscal indiscipline within government entities, emphasizing the importance of effective fund utilization.

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Despite criticism and being labeled a “miser” for declining some supplementary requests, Mr. Kasaija stressed the need to prioritize sectors with a multiplier effect. He noted that money will never be enough but urged responsible financial management and sector prioritization.

In the 2024/25 financial year, the government has identified priority sectors, including investing in people, roads, peace and security, electricity generation, transmission, and effective management of natural disasters. The Finance Minister called for resolving fiscal challenges, emphasizing that the economy can prosper with prudent financial decisions.

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