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Former Finance State Minister in charge of General Duties Fred Omach says the rising debt stock across sub Saharan Africa was way beyond revenue mobilisation, which is clear proof that governments are living beyond their means
Most African countries have borrowed beyond what they can repay, according to former Finance State Minister in charge of General Duties Fred Omach.
Speaking during the second African Conference on Debt and Development Lilongwe, Malawi, Mr Omach, who is also the chairperson of Uganda Debt Network, said the rising debt stock across sub Saharan Africa was way beyond revenue mobilisation, which is clear proof that governments are living beyond their means and accumulating more debts than they can service, especially with an increase in commercial and non-concessional borrowing.
This, he said, has further been worsened by low levels of debt productivity due to corruption and execution issues that grossly undermine the ability to generate revenues to service debt.
“As a result, substantial shares of the national budgets each year have been allocated to debt repayment or servicing at the expense of other social service sectors,” he said, noting this comes less than 15 year after major debt restructuring yet debt in countries such as Uganda continues to soar.
According to Mr Omach, as of 2020, General Gross Government Debts owed by African countries stood at $1.5 trillion up from over $192b in 2000.
In Uganda, he said, public debt has been growing, worsened by Covid-19, which in 2020 saw the country’s debt stock increase by 15.4 percent.
Recently, Mr Amos Lugoloobi, the Planning state minister, indicated that public debt had grown beyond the East African Community 50 percent thresh hold, warning that the growth was no longer sustainable.
Government has not yet provided details of the real value of Uganda’s debt. However, Mr Omach indicated that Uganda’s debt stock increased by 15.4 per cent in one year to $20.7b (Shs73.5 trillion) as of December 2021 up from $18b (Shs65.6 trillion) in December 2020.