KAMPALA, January 31, 2024 – Deputy Speaker of Parliament, Thomas Tayebwa has directed the Committee on National Economy to assess the country’s huge public debt, which continues to raise eyebrows among citizens.
Tayebwa made the directive during the debate on the National Budget Framework Paper [NBFP] for financial years 2024/2025 – 2028/2029.
According to the Minister of State for Finance, Planning and Economic Development [General Duties], Henry Musasizi, composition of public debt stock as at end of June 2022, was Shs 86.7 trillion, although the Auditor General in his latest report put it at about Shs 97. 5trn as of the end of June 2023.
The Committee has one month to make an assessment on the public debt to allow the legislators debate the matter.
“It is an issue which we can come here and debate and they give an argument where they base themselves. I have interacted with speakers of other countries, surprisingly, they say our debt is sustainable compared to theirs,” said Tayebwa.
Tayebwa’s directive followed a call by Butambala County Member of Parliament, Muhammad Muwanga Kivumbi urging parliament to spare time, specifically to tackle the increasing burden of public debt.
Kivumbi said that Uganda is on the verge of getting black listed for failure to repay debts.
“We are going to be debt refinancing this financial year more by a whooping Shs 9 trillion. Interest is going to increase on our domestic debt by a whopping Shs 1 trillion,” said Muwanga Kivumbi.
He added, “we need to sit because if we don’t, we have fundamentally mortgaged this country to a level we cannot imagine. We need to crack this animal called national debt and the way we are borrowing, otherwise we are in a deep hole,” said Muwanga Kivumbi.
Nyendo Mukungwe MP, Mathias Mpuuga faulted the Minister of Finance for failure to lay a public debt management framework, which he said is a requirement under the Public Finance Management Act [PMA].
“We need to understand how you will manage the public debt. The law demands that the minister lays this framework immediately after laying the Charter of Fiscal Responsibility,” said Mpuuga.
Katikamu County legislator, Hassan Kirumira also asked the Minister of Finance to furnish Parliament with the details of lenders, to enable lawmakers make informed recommendations.
“If we do not do this at this stage, we will find ourselves in a state where we will suffer a loss because of lack of planning. We agree on borrowing but we need to be precise on source of borrowing, terms and conditions of money lenders,” said Kirumira.
The MPs also tasked the Ministry of Finance to prioritise payment of domestic arrears which as of 30 June 2023, stood at Shs 2.7 trillion.
The Leader of the Opposition, Joel Ssenyonyi questioned why government puts more focus on repayment of external debts and yet the domestic arrears is owed to local suppliers who form majority of tax payers.
“Locals employ youths, their businesses are closing and the entire economy suffers and yet we focus on investors. Let us get serious. Once people provide goods and services to you and you have not paid them, you owe them, it is a debt,” he said.
In the 2024/2025 financial year budget, the Ministry of Finance has allocated Shs 200 billion to clear part of the Shs 2.7 trillion, which Ssenyonyi said is insufficient.
Musasizi said that whereas the Ministry of Finance is committed to reducing the domestic arrears, they are limited by the available resources.
“We have a commitment as ministry that at least on an annual basis, we as much as possible try to reduce them [domestic arrears]. I wish we had all resources to settle the Shs 2.7 trillion at ago. The spirit is there but what is limiting us is the resources,” said Musasizi.
The Chairperson of the Budget Committee, Patrick Isiagi was worried that government is still grappling with domestic arrears even after instituting a commitment control system where orders are placed if funds are available.
“Accounting officers commit according to work plans but at the end of the day, Ministry of Finance does not release funds,” said Isiagi.
The 2024/2025 national budget is projected at Shs 52.7trn.
Buy your copy of thecooperator magazine from one of our country-wide vending points or an e-copy on emag.thecooperator.news