June 15, 2018 – Uganda’s Finance Minister Matia Kasaija yesterday unveiled a Ushs 32 trillion budget for fiscal 2018/19 which once again showed the deepening indebtedness of Ugandans.
Mr. Kasaija will spend Ushs 10.6 trillion on debt servicing and repayment which is equivalent to 33 percent of all the money he expects to receive this year. That compares with the Ushs 2.3 trillion equivalent to 7.1 percent of the budget that has been allocated to cater for the health of Ugandans or the Shs 3.1 trillion that has been allocated to education.
Uganda’s outstanding debt stands at $10.53 billion equivalent to 38 percent of all the value Uganda generates in a single year.
While Kasaija and Museveni boast that the debt is sustainable, this figure represents a rapid deterioration since just 13 years ago, Uganda was among the first beneficiaries of debt relief which saw 90 percent of our foreign debt written off, leaving the country with less than $500 million of old debt to pay.
Although debt is supposed to help accelerate development of key infrastructure, the returns in Uganda’s case are debatable because of corruption that leads to a high cost of procurement and delays in implementation. For instance Ugandans are still paying high tariffs for using electricity because of overpriced hydro and thermal generation plants owned by well connected individuals.