The debt burden Uganda is thriving in is due to corruption in government and trade imbalances, the Leader of Opposition Betty Aol Ochan has said.
According to current financial assessments from the Auditor General’s office John Muwanga, Uganda’s public debt as of June last year increased by 22 per cent, rising from Shs33.99 trillion as at June 30, 2017, to Shs41.51 trillion.
Muwanga last year told Speaker of Parliament Rebecca Kadaga that if the government is to service the loans as projected in this financial year 2019/2020, it would require more than 65 per cent of the total revenue collections which is over and above the sustainability levels of 40 per cent.
However, Aol blames President Museveni for failing to fight corruption which is damaging Uganda’s economy by increasing the debt burden every financial year yet corrupt figures are still serving in his government.
In an interview with this website on Wednesday at Parliament Aol said Uganda is on a time bomb since the debt burden is greater than the whole national Budget.
“Uganda’s debt today stands at Shs43 trillion, while the national Budget stands at Shs40.5 trillion. The debt burden has been growing greatly because of the trade imbalances and corrupt officials who fail to appropriately use the borrowed money which makes us again to borrow for the same thing as the debt burden increases,” said Aol.
She added that the capture of state institutions by the ruling party has exacerbated the problem of failed policies by breeding institutionalization, incompetence and endemic corruption leading to loss of borrowed funds.
“Uganda’s urbanisation is at 4.5 per cent with about 6 million people living in urban centres. It is estimated that 8 million people will be living in urban centres in the next years but planning for the urban centres has failed yet countries such as the Netherlands, Germany have lent us money to reconstruct our centres but because of corruption nothing is done,” she said.
She also noted that corruption has not only increased Uganda’s debt burden but has also led to poor people losing their property to greedy rich people and government officials.
“Land acquisition and ownership continue to face unprecedented instability as agencies for its registration and establishment connive with beneficiaries of ill-gotten wealth and greedy people to rob communities of their land,” she added.
According to Micheal Mugisha, a researcher from Uganda Debt Network, although a majority of Uganda’s loans have the potential to address development such as infrastructure and others, the effect of servicing some of the accumulated debts has the potential to take away the available limited resources that could be used for public spending and improving service delivery.
More specifically, resources that are used to service debt or pay back loans may crowd out public investment including private investment in priority sectors i.e. health, education and agriculture among others.
Mugisha also noted that heavy debt servicing as a result of over-borrowing will not only put Uganda in a fiscal deficit but will lead to other numerous problems.
“However I must say that government borrowing is not bad as long as the borrowed money is effectively managed and utilised to finance developmental projects that will generate income and employment opportunities for Ugandans.
This will boost public investments which will strengthen the capital base of the economy and also help to increase the production of goods and services. With such economy government will be able to repay the debt and interest charges in the future without much difficulty,” he said.