By Hanning Mbabazi
Kampala: State Minister of Finance for Planning David Bahati has assured Ugandans that the NRM government will never ask for debt relief again. Addressing the Press in a breakfast meeting, the Minister said that NRM government is not thinking of asking for debt relief “because everything is under control.”
“Our debt is sustainable in the medium to long term. We are a very cautious lot. We shall never go back to beg for debt forgiveness [relief] and certainly not under the NRM government,” Bahati said, noting that once oil begins flowing, government will offset some of the loans it holds.
According to data from the Finance Ministry, Uganda’s debt stock rose to Shs42.7 trillion ($11.5b) as of December 2018 up from Shs37.2 trillion (10.2b) as of December 2017.
The Minister also said that Government is seeking to raise resources to fund the Shs40 trillion budget and is expected to mobilize Shs20.4 trillion domestically with the rest coming from external borrowing and donor support. Mr. Bahati said Uganda’s debt ratio is far below the 50 per cent threshold, which experts have warned would be disastrous if it hits or goes beyond this mark. Uganda, he said, has borrowed heavily to implement infrastructure projects.
Much of the borrowing in the 2019/20 financial year, according to Mr. Bahati will be used in financing roads, energy and petroleum sector development. This will be in addition to health and education infrastructure.
Uganda Revenue Authority Commissioner General Doris Akol, said Uganda “can no longer rely on handouts from foreigners to support our own activities”, noting that “we need to live within our means and avoid over spending.”
This, she said, is in line with moving away from donor dependence and a number of administrative measures will be implemented to increase domestic revenue mobilization.