By Leonard Kamugisha Akida,
NATIONAL
The Forum for Democratic Change – FDC has asked government of Uganda to stop contracting international commercial financing debts and concessional loans.
Ibrahim Ssemujju Nganda, the FDC spokesperson says that unnecessary external borrowing by the government does not only cost the taxpayer but also disables the country to finance largest percentage of its own budget.
The Kiira municipality legislator was speaking to journalists at the FDC home in Najjanankumbi Kampala on Monday. He warned foreign financial lenders against borrowing money to Ugandan government.
“We are going to issue red flags to all lenders not to lend money to Museveni and his ministers,” Ssemujju said.
According to him, increasing public debt puts pressure on the country’s revenue obligation yet the borrowed funds benefit the ‘extravagant’ family of the president and his NRA/M allies not Ugandans.
“While the stated objective in the draft budget (Budget Framework Paper) is increasing average household income and improving quality of life, the real and hidden purpose is to finance extravagance and to rent support for the aged and increasingly unpopular president,” Ssemujju referring to the Shs49.9 trillion budget framework paper
Uganda’s debt payment has increased from Shs15.1 trillion to Shs17.5 trillion. This means that 35% of the next financial year’ budget (2023/24) is debt and interest paymen.
Nonetheless, in the proposed Shs49.9 trillion budget for the 2023/24FY, debt and interest payment has been added extra Shs2.3 trillions.
¶We're going to issue a red alert to lenders not to borrow money to @KagutaMuseveni and his ministers,¶ Hon. Ssemujju on external borrowing by gov't.#ParrotsugNews@FDCOfficial1 @isaac_kibedi1 @williamkikomeko @Grace25612 pic.twitter.com/FuTQSBaeW4
— Parrots UG (@parrotsug) January 16, 2023
Ssemujju is concerned on increasing public expenditure and tasked government to explain to Ugandans what they are paying for.
FDC demands come at a time when State House is seeking for Shs21.9bn to procure new vehicles for the president and his vice and cater for the increasing staff and special forces command.
This was revealed by the security minister Maj. Gen. Jim Katuguugu Muhwezi while appearing before the committee of parliament on Presidential Affairs to table the indicative budget for the entity in the next financial year, last week.
Further reports indicate that the office of the president has also asked parliament to approve a request of Shs4.23 billions for procurement of medals to be awarded to visiting heads of state.
FDC says this is the extravagance of the Museveni government but recommends for suppression of unnecessary expenditures if government is to slow down the pace at which it is obtaining external debts.
A December 2022, report released by the Bank of Uganda (BoU) shows that public debt nominal value stood at Shs79,938.1 billion (approximately 49% of GDP) in October 2022.
The commercial bank warned that Uganda’s public debt ratio to GDP is projected to rise further in the medium term and peak at about 53% before gradually easing and returning to the government target of 50% by the end of FY 2024/25.
The bank further reported that Uganda’s failure to repay external debt forces the country to encroach on national reserves yet these are ideally meant for calamities.
BoU reports that on average 37% of revenue collected goes to debt and interest repayment.
