The Uganda government has budgeted Shs8.547 trillion for Domestic Debt Refinancing in the new financial year that begins on July 1 2021 and ends in June 2022.
Presenting Uganda’s National Budget for the financial year 2021/22 in Kampala on Thursday, the designated state minister of Finance, Planning and Economic Development, Amos Lugoloobi said Uganda’s domestic borrowing amounts to Shs2.943 trillion.
Logoloobi said during the financial year 2021/22, external financing for projects will amount to Shs. 6.868 trillion of which Shs5.519 trillion is from loans, and Shs1.349 trillion is from grants.
During the year 2021/22 Lugoloobi said budget support accounts for Shs3.583 trillion. The Petroleum Fund resource amounts to Shs 200 billion.
Addressing the issue of total public debt, Mr Lugoloobi said Uganda’s debt amounted to $17.96 billion as at December 31, 2020, equivalent to 49.8 per cent of GDP.
Mr Logoloobi further noted that borrowed funds have been used to finance mainly infrastructure projects such as the Karuma and Isimba hydropower plants, oil roads, development of airports industrial parks, transmission lines, water and irrigation projects, among others.
“I reaffirm government’s unwavering commitment that Uganda shall continue to honour its debt obligations as they fall due. Uganda will not default on repayment of its debt. All contractual debt obligations will be fully honoured,” he said.
According to him, Uganda’s public debt remains sustainable in the short, medium and long term because the government put in place strategies to ensure that Uganda’s public debt remains sustainable.
Mr Logoloobi said the government will undertake the following key strategies, among other, to keep Uganda’s debt within sustainable levels; ensure that projects are well appraised to allow only those that are viable and aligned to the national development plan; prioritise borrowing for only projects that enhance socio-economic transformation, and enhance project implementation.
The others are: Prioritize borrowing from concessional sources; and Increase the maturity profile of our domestic debt.
On the total expenditure in Uganda’s Nation Budget 2021/22, Mr Lugoloobi explained that total expenditure will be Shs.44.778 trillion, excluding domestic debt refinancing and Appropriations in Aid (AIA), which amounts to Shs36.019 trillion of which Wages and Salaries is Shs5.528 trillion, Non-wage Recurrent Expenditure is Shs15.625 trillion and Development Expenditure is Shs14.865 trillion.
He said the Economic Growth Strategy for the medium term aims to achieve faster and inclusive growth and enhanced socio-economic development. The target is to raise growth rates from 4.3 per cent estimated for Financial Year 2021/22 to at least 7 percent in the medium-term.
“The strategy that will achieve these medium-term objectives is three-fold: Restoring the economy back to the medium-term growth path; improving the wellbeing of the population to ensure a healthy and skilled workforce; and Providing peace, security and good governance,”