Uganda’s State Minister of Finance-General Duties, Henry Musasizi (pictured) has told MPs on Parliament’s committee on National Economy that they should expect more loan requests from Government until the budget is fully financed.
Parliament in May passed a budget of Shs48.1 trillion for the financial year 2022/2023 and was supposed to be financed through domestic tax revenue of Shs25.8 trillion, grants amounting to Shs2.1 Trillion, leaving a budget deficit to be financed through external borrowing of Shs7.1 trillion and domestic borrowing amounting to Shs12.97 trillion for both budget support and domestic debt refinancing.
While appearing before the parliamentary committee on National Economy today, Minister Musasizi tabled a loan request of Shs1.7 trillion to be acquired from the standard chartered bank of UK.
Musasizi informed MPs that the loan will be paid over a period of 10 years and the bank was chosen because it had favourable loan conditions.
The Minister also informed the committee that the loan request is for budget support as indicated in the budget for this financial year and says that its part of the quarter two cash limit.
The Isingiro South MP, Alex Byarugaba noted that he did not have any objections to the loan as it was part of the budget but noted that it’s time the country came up with a way forward on how to improve the economy.
The Kyamuswa County MP, Moses Kabuusu wondered the rationale for making a budget when it does not have enough finances.
The Kwania County MP, Tony Ayoo asked the minister to make a review of the economy and the country starts making budgets to which they have capacity to handle.
The MPs on the committee also wondered if this will be the last loan request to which the minister noted he will be coming back many times until the budget is fully financed as indicated in the budget.
Musasizi said the resource envelope structure for the budget for this financial year includes loans, grants, domestic financing, project support among others and has warned MPs that he will continue presenting such requests until the budget is fully financed.
By the end of June 2022, the total public debt stood at Shs78.799 trillion, an increase by 13 percent from Shs69.513 trillion as at the end of June 2021.
