Uganda’s national debt has become a source of worry for many, as the Budget Committee in Parliament recently discovered.
The committee grilled the Ministry of Finance, Planning, and Economic Development on how to deal with the increasing debt load.
The State Minister for Finance, Henry Musasizi, revealed that Uganda’s total debt reached US$23.7 billion by June 2023, up from US$21 billion in December 2022.
Musasizi said the government is committed to spending wisely and borrowing carefully, especially in key areas.
The committee also questioned the difference in debt figures reported by the Auditor General and the Ministry of Finance. The Auditor General said the debt was shs96 trillion, while the Ministry of Finance said it was shs86 trillion.Paul Omara, the Otuke County MP, said the Auditor General’s figure should be trusted, and blamed the variance on exchange rate fluctuations.
Musasizi agreed that exchange rates could cause discrepancies.
Another issue raised by the MPs was the Charter of Fiscal Responsibility, which sets limits on debt repayments.
The MPs said the debt repayments, projected at 18.9 percent, are above the 13.6 percent target, and are putting pressure on Ugandans.
Dicksons Kateshumbwa, the Sheema Municipality MP, said the debt repayments are taking a big chunk of the revenues, and urged the government to stay within the target range.
However, the Secretary to the Treasury, Ramathan Ggoobi, insisted that Uganda’s debt is manageable. Ggoobi said Uganda has access to international credit markets, unlike many other African countries.
He said the government has a good strategy to deal with the risks, and praised Uganda’s strong macro-economic management.
The MPs also asked the government to boost the tourism sector, which Ggoobi said has recovered from the Covid-19 pandemic.
Ggoobi said the increase in tourism earnings and exports, as well as foreign-direct investments, have helped to reduce Uganda’s fiscal deficit.
Despite the Treasury’s confidence, many are still worried about the fiscal responsibility and wise management of Uganda’s debt.
