The Minister of State for Finance (General Duties), Henry Musasizi (pictured) tabled the 2024/25 National Budget Framework Paper, highlighting Government’s intention to borrow over Shs13Trn to fund the Shs52.722Trn budget in Financial Year 2024/25.
The Minister revealed that the projected budget for 2024/25 would amount to Shs52.722Trn, compared to Shs52.736Trn approved budget for FY2023/24, thus indicating a decline of Shs14.10 billion.
“The total resource envelope of Shs52.722Trn is comprised of domestic revenues equivalent to Shs 29.957Trn, budget support amounting to Shs 28.94 billion, domestic borrowing amounting to Shs 4.116.02 billion, external project support worth Shs8.876.87 billion, while domestic refinancing (roll-over) of Shs9.455Trn and local revenue for Local Governments (AIA) of Shs287.10 billion,” rad in part the document.
For external debt repayments, Government has earmarked Shs3.223Trn compared to Shs2.638Trn that was set aside in FY 2023/24, with the Ministry of Finance highlighting that over the medium term, external debt payments are projected to increase due to the increase in commercial loans over the last few years. Going forward, Government’s financing strategy is to reduce borrowing on commercial terms and focus more on concessional borrowing.
Additionally, interest payments are projected to amount to Shs7.623Trn and of this, Shs5.662Trn is projected for domestic interest payments while Shs1.960Trn will be foreign interest payments and commitment fees.
Government also indicated that the stock of public debt increased from US$ 20.99 billion (Shs78.833Trn) in June 2022 to US$ 23.66 billion (Shs86.779Trn in June 2023, with Government blaming the growth in public debt on the continued economic growth recovery from the COVID-19 shock which had not only affected economic activity, but also necessitated higher Government borrowing; coupled with Government’s deliberate efforts towards fiscal consolidation.
