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The national debt burden is currently estimated at Ushs 64 trillion ($18b) as of December 2020, having risen 35% from the previous year.
According to the government plans and as reflected in the next budget, the national debt stock will rise to 52% of the GDP by the end of this year, which is above the cap Uganda and other East African countries had agreed with the International Monetary Fund.
Experts say that when debt gets to a level that is more than half of the size of an economy, especially for poor economies like Uganda, there is the risk that it will be stressed paying back the loans. When the ceiling was hit, the government said it was not a bad situation, since it was borrowing for infrastructure and not consumption, a position increasingly supported by some civil society members.
The acting Secretary to the Treasury Patrick Ochailap, says that the current budget and the other spending forecasts were made just before the second lockdown was announced earlier this month, adding that they could not have predicted the future.
He, however, says that they are all the same taking measures to reduce borrowing starting with domestic borrowing, which has been reduced from Ushs 6.5 trillion this year to Ushs 2.9 trillion next year.
The Deputy Governor Bank of Uganda, Michael Atingi-Ego warned that the current semblance of some positive economic indicators should not be taken for granted that the economy is stable. He cited the strengthening of the Ugandan shillings against the US Dollar as one of the indicators.
Atingi-Ego explained that this could be a temporary situation because offshore are taking refuge in Uganda currently as they wait for interest rates in the west to rise again and rush back, which could cause a sudden problem to Uganda.
The domestic revenues are expected to cover about half of the budget, as URA is tasked with collecting Ushs 22 trillion, with another 200 b to be drawn from the Petroleum Fund.
The Ministry says the reduction in borrowing next year is because of the declining sources of foreign funding and the development partners also experience financial hardships, especially as they fund their home health systems to contain Covid 19.
Ochailp says even if they reduce domestic borrowing, the government will continue to be in the local financial market even for other reasons like stabilizing the financial system where the private sector cannot. Civil Society Budget Advocacy Group, Director Julius Mukunda told the post-budget conference organised by Uganda Revenue Authority, that the government must reduce its spending habits if borrowing is to reduce.
He also accused the public and political leaders of abetting the situation by making political demands that increase non-development expenditure.
The government hopes that the economy will grow faster next year and the subsequent years with many drivers expected in place, including the development of the oil sector.
They hope also, that the government will be able to vaccine at least 4.5 million people in the short term for more sectors of the economy to be opened.
Currently, less than 1 million people have been vaccinated in Uganda. The country received her first Covid 19 vaccine delivery in March. However, DG Atingi-Ego warns that the country is sitting on the edge, and that if any large-scale emergency happened, it would not be able to respond due to lack of funds.
He asks that the ministry must reduce the debt stock as soon as possible.
However, DG Atingi-Ego warns that the country is sitting on the edge, and that if any large-scale emergency happened, it would not be able to respond due to lack of funds.
Victoria sekittoleko private sector foundation deputy chairperson warned of bad economy saying the national budget theme lacked focus to empower small and medium enterprises that spark the economy.
“How do you tell me that this national budget will up lift already stressed small and medium enterprises. Covid forced many to close and those operating are struggling without any longterm support from government. Look at Uganda Development Bank fund only targets manufacturers and secondly the tax incentives only targets manufacturers with initial capital of 50 million dollars. Sincerely tell which sme owns this money,”she asked
Check also;
- African Mentality On Borrowing Money
- Troubled Kenya Airways Denies Borrowing KShs125 Billion From Government
- More firms Turn To Islamic Finance For Development Projects
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![[dropcap]A[/dropcap] section of women in Bugongo parish and Nawangaiza parish in Nawandala Sub County, Iganga District have decried the near-impossible terms set for them to access GROW funds. They have now petitioned their woman member of parliament for Iganga Hon. Kauma Sauda Alibaawo to ask the government for revised terms and conditions. This is to enable them to benefit from the program. The disgruntled women accuse the implementers of the program of charging the money. They are also asking for their land titles and land agreements. They said that such properties are governed by their husbands. These, therefore want the government through their woman MP to intervene and revise the requirements for one to benefit. The women were on Wednesday at Namabwere primary school in Nawandala Sub County. They had gathered in their respective groups to receive over 300 chickens from Hon Alibaawo in her campaign to improve the livelihood of women in Iganga district. Each group was given 50 chicken as start-up capital in their journey to prosperity. Read what some leaders said; Ms Naigambi Lydia from Nawandala Trading Centre says, “They solicited money from us through opening bank accounts and depositing Shs80,000. They also asked for land titles and land agreements from us yet we don’t have such things. I was informed that I needed to have a business with a capital of Shs4m yet my capital was very small.” The chairperson Kisoboka Saving Group in Nawandala Ms. Nakagolo Faith said they were not able to join the program. This is given the many conditions attached. She also asked their woman MP to raise their concerns to the relevant offices. The MP condemned the mode of implementation of the program. She cited that it has turned to benefit the well-off class of women other than the intended group. She further asked the government to intervene saying the current strings attached to the programme are very tight to accommodate a common woman. GROW project is a Government of Uganda initiative that arose out of the need to respond to the needs of women entrepreneurs. This is especially those who want to grow their businesses, sustain their self-employment and create more jobs. Check Also; Iganga District NRM Leaders Urge Museveni To Fulfill Election Promises Of 2021 International Women's Day: Celebrating Progress Towards Equality](https://i0.wp.com/newslexpoint.com/wp-content/uploads/2024/11/Iganga-women-decry-tough-terms-to-access-GROW-funds-e1731738339732.jpg?resize=300%2C160&ssl=1)
