What you need to know:
- The Finance minister says that because he has ignored many financial requests, including those directed by the President, some people now call him a miser
Finance Minister Matia Kasaija has said government cannot borrow indefinitely to finance unending financial requests, many of which can be deferred, postponed or even done away with.
Speaking at a pre-budget dialogue for the 2024/25 financial year organised by Civil Society Budget Advocacy Group at the weekend, Mr Kasaija said as long as “I am your Finance minister, I cannot borrow indefinitely to mortgage your country”, noting that there are many demands but it was not a matter of life and death because some of them can be deferred and postponed or just cope with what is available.
“Almost every Monday when Cabinet sits there are always new demands for supplementary budget. Now, I have learnt to politely keep quiet. Even when the President says Kasaija find money for this … I say yes, but I don’t do anything because there is no money and I will not borrow indefinitely,” he said, noting that the issue of supplementary requests must be stopped.
Mr Kasaija was responding to concerns from civil society organisations, which said the ballooning public debt presents challenges to the economy, which continues to experience low tax revenues, amid an increase in financing demands, many of which fall within the priority areas but cannot be financed.
Supplementary requests have become a constant in the last 10 years even when government has on several occasions indicated its commitment to eliminate such requests from the budget cycle, given that they often lead to increased borrowing, which as a result leads to an increase in public debt.
During the period ended June 2023, Auditor General John Muwanga indicated that public debt had significantly increased, rising to Shs96 trillion, of which Shs43.6 trillion or 45.4 percent was domestic, while Shs52.4 trillion or 54.6 percent was external debt.
Public debt continues to put pressure on domestic revenue, which is projected to decline by nearly Shs3.5 trillion from Shs25.2 trillion in the 2023/24 financial year to Shs21.7 trillion in the 2024/25 financial year.
Debt servicing takes one of the biggest budget allocations and is expected to rise to Shs3.2 trillion in the 2024/25 financial year from Shs2.6 trillion, which deprives priority sectors of the economy of funding.
Money can never be enough
Mr Kasaija also said that some officials in government now call him “miser” for declining some supplementary requests, noting that money can never be enough for every sector, which calls for prioritising certain sectors of the economy that have a multiplier effect.
“Money will never be enough, even if you give me another Shs50 trillion ... but we can prioritise sectors, according to their weight,” he said.
Government has earmarked a number of sectors as priority areas in the 2024/25 financial year, which include; investing in people, roads, peace and security, electricity generation and transmission and effective management of natural disasters.
During the meeting, Mr Kasaija also blamed ministries, government departments and agencies for failing to utilise money they request, noting that this represented fiscal indiscipline, given some officials are allocated money and disbursed to their accounts “but they play around with it”.
Impact of debt on economy
Mr Julius Mukunda, the Civil Society Budget Advocacy Group executive director, expressed concern about the impact of debt on the economy, noting that growing debt, careless borrowing and spending present dire challenges to the economy.
“We are not here to point fingers; rather, we are here to argue that our economy can prosper if we can resolve certain problems, like the debt burden problem,” he said, noting that government has the potential to save money on things such as domestic and international travel, entertainment and welfare among others.