By Mike Ssegawa
Ugandans have been sleeping indeed. This has never happened in the history of budget reading where creditors are the biggest beneficiaries of a budget, and not the common man. Oh yeah – that is not really true – the fact is that for the first time, the minister of finance has showed Ugandans a middle finger – and told them that they will have to pay for the money government has mismanaged after borrowing it at exorbitant costs.
Days ahead of this financial year’s budget reading, prices of several things went through the roof, and the common mwananchi painfully paid for basics like sugar, fuel, soap, milk, bread, etc. Of course the government did nothing apart from the usual propaganda.
We now understand that the government has been borrowing heavily, and this year, instead of spending enough money on improving education and health facilities and paying those workers who have cried for year over a decent pay, we witness a budget where 22% goes to servicing debt – not actually paying it.
This is the one budget the Uganda government will be spending more money on paying debts than on health, security, agriculture or education, among the most vital sectors. Many Ugandans however will in the next couple of days not dare ask, where that money went!
We however know that undisciplined government officials have solicited for loans they did not need, and in some instances, they ate the money they had borrowed on behalf of Ugandans.
Now, Ugandans will tighten their belts, and Ms Doris Akol tightens her grip on the tax payer, never mind several companies will be closing in the 12 months and more Ugandans will be walking the streets looking for jobs more than before.
South African trained economist, Dr Enoch Twinoburyo, in an article this website has carried independently, says out of the UGX 29 trillion budget for Financial Year 2017/18, only UGX 22 trillion will be spent on the 18 sectors (including statutory entities, central government, and local government and interest payments).
It means, your government will spending between UGX 5-6 trillion to service a debt without actually paying for it. He called “simply debt roll-over”, which means, Mr Kasaija and his colleagues at Finance, will be re-contracting the debt instead of paying it off. Debt roll over is considered as new debt and thus the inclusion in the FY 2017/18 budget. Enoch says that for the third year in a row, FY 2017/18 will include provisions for refinancing of maturing domestic debt (also known as Treasury redemptions) to a tune of UGX 5 trillion or 22 % of the proposed budget compared to 19 % in FY 2016/17.
Enoch further explains that Uganda’s public debt outstanding is USD 9.8 billion (about 38.6% of GDP) and with the forecast budget/ fiscal deficit, the public debt will cross the 40% of GDP in FY 2017/18.
That we lived in country surviving on borrowing is not good news since Uganda is largely lagging behind its neighbours Kenya, Tanzania, Rwanda and Ethiopia who are on the trajectory towards self sustenance.
It would however not be too bad to borrow to plan well for the future, whoever, the theft in the public sector is what is bothering both the dead and unborn children of Uganda, as they too will have to pay this debt in one way or the other.
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