President Yoweri Museveni has committed to stop financial hemorrhage caused by uncontrolled public debt.
As of June 2023, Uganda’s public debt had hit Shs88 trillion out of which Shs47. 9 is owed to external lenders.
While presiding over the Budget Speech session virtually on Thursday, Museveni said it is important to put a halt on public borrowing and only borrow when it is necessary.
“You heard your budget of Ug.Shs.52trillion. While I support that budget because there is no other solution in the short-run, it is important to know that
Shs.17trillion of that budget, is to pay debts,” Museveni said.
To check borrowing, Museveni said he now approves all loan requests before they are brought to Parliament.
“Many of these debts, were being pushed by the neo-colonal public servants until recently when I put down my foot and insisted on approving every loan. The way forward is that we should borrow less or not borrow at all. With discipline, we do not have to borrow at all,” he said.
He further urged Uganda Revenue Authority, the country’s tax body to scale up revenue collection in order to raise more revenue to locally finance the Budget.
“URA is also still under collecting taxes. Their tax: GDP ratio of 13% is not serious. In Europe, countries like Holland, have a tax: GDP ratio of 39.7%,” he said.
Finance Minister Matia Kasaija presenting the Budget
The resource envelope for FY 2023/2024 is Shs52.7 trillion. Out of which domestic revenue is 29.67trn, domestic borrowing (3.16trn), budget support (2.78trn), external project financing (8.26trn), appropriation in Aid (0.29trn), domestic debt refinancing and other financing (0.229trn).
The President also reiterated his message on value addition.
“Now that we have good roads, electricity and building railway system, any effort must be made to add value to all our products,” he added.
While presenting the National Budget for FY 2023/2024 at Kololo Ceremonial Grounds, Finance Minister Matia Kasaija said government will in the FY embark on reducing consumptive expenditures.
“During the next FY, there will be no purchase of new vehicles for political leaders and public officers except for hospital ambulances, medical supplies & distribution, agricultural extension services, security and mobilization,” he said, adding that travel abroad will also been restricted to statutory functions and critical legal and resource mobilization functions.
“We will also regulate expenses on workshops and seminars,” he said.