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Gov’t Accused Of Understating Public Debt To Continue Borrowing

A section of Opposition lawmakers have accused Government of understating the public debt by Shs6Trn, saying that the move is intended to make it appear that the skyrocketing public debt is manageable, which might not be the case.

While presenting a report by the National Economy Committee on a motion seeking Government to utilize the special drawing rights from the International Monetary Fund, Robert Migadde (Buvuma County) noted that Uganda’s Public debt stood at Shs80Trn, and the approval of the proposed borrowing, would increase Uganda’s share of external debt exposure by US$ 915 million from US$16.68Bn as at end December 2022 to US$17.59Bn.

He said, “By end of December 2O22, total public debt stood at to 80,774.8 billion. This debt stock constitutes of Shs47,760.2Bn (US$ 12.85 billion) as external debt, while Shs33.014.6Bn (US$ 8.89 billion) is domestic debt. As a share of debt to GDP Nominal Debt to GDP increased from 48.4percent in June 2022 to 49.6percent in December 2O22 performing within the thresholds of the charter for fiscal responsibility.”

Migadde also added that Public debt will remain within the sustainable levels, as they were part of the debt sustainability analysis on debt that indicated that debt was sustainable given the assumptions such as improved projected economic growth over the medium term.

However, the figure was disputed by Hassan Kirumira (Katikamu South) who authored a minority report, saying the figure submitted by the Ministry of Finance of Shs80Trn is lower noting, “We believe this is intended to improve the Debt to GDP ratio and create on impression that the country’s debt burden is still in the manageable range. Bank of Uganda puts the country’s total public debt stock as at end March 2023 at Shs86,352Trn.

Kirumira said, “Over borrowing exerts a lot of pressure on repayments, reserve stock, future borrowing, and sovereignty of national assets as the saying goes “he who finds you is your master”. Increasing public-debt burden means higher interest costs, which divert resources from education, health care, and infrastructure.”

However, it isn’t the first time that two institutions of Government are presenting before Parliament different figures of public debt, with the Ministry of Finance’s figure in December having placed public debt at Shs78.833Trn as at June 2022, yet the Auditor General John Muwanga when presenting his December 2022 Auditor General report on financial statements for FY2021/22, the reported total public debt as at 30th June 2022 stood at Shs86.6Trn.

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