Last week, the ministry of Finance tabled a Shs 52.7 trillion national budget framework paper for the financial year 2024/25 for the appropriation of funds to various government agencies, ministries, and departments. The budget framework paper was tabled before the Budget Committee of Parliament.
The documents tabled before the committee show that the government is working around a resource envelope of Shs 52.7 trillion. The budget is comprised of domestic revenues equivalent to Shs 29.9 trillion from Shs 29.6 trillion, domestic borrowing amounting to Shs 4.1 trillion, external project support worth Shs 8.8 trillion, domestic refinancing of Shs 9.4 trillion, among others.
The framework paper shows that Uganda’s support from donors dwindled from Shs 2.781 trillion in 2023/24 to Shs 28.9 billion in the coming budget of 2024/25.
According to the 2022/2023 auditor general’s report, the public debt shot up to Shs 96.1 trillion. It is comprises the domestic debt stock of Shs 43.6 trillion and the external debt stock of Shs 52.4 trillion. This represents an increase of Shs 9.3 trillion compared to Shs 86.8 trillion as of June 30, 2022.
The borrowing is expected to increase the country’s debt stock from Shs 96.1 trillion to Shs 109.1 trillion. Of the Shs 13 trillion, a total of Shs 8.9 trillion is projected as external financing. Of this, Shs 28.9 billion will be obtained as budget financing loans and Shs 8.87 trillion from project loans.
“Government borrowing from the domestic market for fiscal purposes in the financial year 2024/25 is projected at She 4.1 trillion. In the medium term, the government’s policy remains committed to maintaining domestic borrowing at no more than one per cent of GDP to avoid crowding out of the private sector,” the framework paper indicates.
Despite the growing public debt, the secretary to the Treasury, Ramathan Ggoobi, assured Ugandans that the country’s debt stock is sustainable, unlike some nations in Africa that have been blacklisted in the credit market.
“The debt is sustainable; Uganda is fully participating in the credit market. Many countries in Africa are struggling to access the credit market. They can’t be allowed to borrow; they have been blacklisted. We have a good strategy to address the risks, and we know we have risks. We have challenges that we are discussing, but we have a strategy,” he said before the budget committee.
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