Uganda struggles to make payments on national debt

muhakanizi

DONT PANIC: Secretary to the Treasury, Keith Muhakanizi argues borrowing is a good thing

 

The Ugandan government has allocated 879 billion shillings from the budget to clear part of the burgeoning debt incurred from infrastructural development loans.

Uganda’s debt has been on a steady rise following government’s continued borrowing to fund huge infrastructure projects like dams, roads and hospitals.

It is estimated by the International Monetary Fund that Uganda’s debt is 33% of the country’s Gross Domestic Product (GDP) which stands at 68 trillion Shillings.

The Secretary to the Treasury Keith Muhakinizi explains that at least 879 billion Shillings out of the 11.084 trillion released to facilitate the National Budget will be dedicated towards repayment of debt.

Muhakanizi however said that government borrowing is not entirely a bad venture; he adds that the government has used the borrowed funds to carry out infrastructural developments that would have otherwise not been possible.

Members of Parliament on the Committee of National Economy authored a report last year warning that Uganda’s debt was growing into proportions that would make it unsustainable for the country’s economy.

Government this week sent out the last batch of the national budget (the fourth quarter). A total of 2.27 trillion Shillings has been sent out with 566 billion Shillings covering wages and salaries, 1.16 trillion for non-wage recurrent expenditure and another 500.1 billion shillings for development expenditure.

The money released from government coffers goes to local governments, ministries, agencies and foreign missions.