The government of Uganda will use over a half of its revenue collections to pay back loans in the next two years, according to the latest report released by the Auditor General John Muwanga.
Muwanga presented the Report for the year ending December 2018 to the Speaker of Parliament Rebecca Kadaga on Friday, 4 January 2019.
The loans were sourced from domestic and foreign lenders including banks and international financial institutions.
Keto Nyapendi, the Assistant Auditor General said, “50 per cent of the loans sampled totaling Shs3.9 trillion will expire in 2020. If government is to service the loans as projected in the next financial years, it would require more than 65 per cent of the total revenue collections,”
Nyapendi said the loans that are pushing Uganda to the cliff edge by 2020 have conditionalities that work against the country’s financial interests.
Already, the highest percentage of the current budget for financial year 2018/2019 (about Shs10 trillion) goes to loan servicing, a trend Kadaga said is not sustainable.
“The issue of public debt is worrying; if we are going to require all that money in such a short time, then that is going to be difficult,” said Kadaga.
On the other hand, Muwanga raised concerns about budget performance, pointing to a Shs1.6 trillion revenue shortfall.
Pension and gratuity arrears for retired civil servants, he said, stood at Shs65.6b in arrears.
He added that a total of 40 government entities have failed to submit their strategic plans, making their activities misaligned to the National Development Plan.
Muwanga said government has failed to collect up to Shs20b it has won in court awards, which he said is suspicious given the aggressive manner in which those that get awarded against government pursue their claims.