Debt burden is an abuse of power

Monday May 03 2021
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Author, Ms Cissy Kagaba. PHOTO/FILE

By Cissy Kagaba

Uganda’s debt appetite has no end in sight. In December 2019, Uganda’s debt burden stood at about Shs49 trillion. In December 2020, it stood at Shs65.8 trillion. That is a Shs16.8 trillion increment. It is safe to say Ugandan’s now collectively owe Shs1.5m per person in debt, but how much of that money has directly gone to the people owed? 

It is fair to state that the Covid-19 pandemic pushed many economies to the brink and thus the need to borrow money to cushion the populace. 

However, there are countries, even in the region that did not borrow as much as we did to cushion the population from the effects of Covid-19 and their Covid-19 figures in terms of percentages of the population are not as far from our percentages. 

The problem  is not that we are borrowing excessively, it is that we are borrowing for the wrong reasons.  Even when we borrow for the wrong reasons, the custodians of this country exaggerate the amounts of money borrowed to cater to their selfish ends. 

Also, we are tethering on the brink, so we are now borrowing at rates higher than the market value because our debt burden is close to unsustainable, considering that the debt- GDP ratio stands at 46 per cent as of 2020. This has gradually increased from 33.8 per cent in 2017, 35.1 per cent in 2018 and 38.2 per cent in 2019 and is projected to be close to 50 per cent by June 2021. 

The technocrats often say we borrow to fund infrastructure projects, but which of those projects are user-centric and directly benefit those for whom the project is being established?

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 The Auditor General’s reports to Parliament over the years have shown that accounting officers have excelled at nugatory expenditure. These are expenditures that could have been avoided.

Uganda has hydro power dams, generating electricity that is not being consumed for lack of power lines connecting the end-user to the power generation plant, but this wasted electricity is paid for by the State annually, using tax-payers money, or loans, still to be paid back by the tax-payer. 

If this electricity was being consumed, the burden would not be as bad and this electricity after being sold, would offset the debt incurred in the construction of the dams. 

For the Mpigi expressway, for a while, the country was paying interest and other sums of money for a loan that was borrowed, but was not being utilised. This road is just one of the many projects for which Uganda pays about $2.2m (Shs7.9 billion) annually for projects that are yet to kick off.   

The Minister of  State for Planning, Mr David Bahati, just the other day tabled an amended budget by an additional Shs3 trillion, to among other things, accommodate the money for the purchase of vehicles for the 11th Parliament. 

I am not against providing vehicles to the legislators, but what end does the purchase of new cars for MPs, many of whom have been legislators before and a number of whom were in the previous House, serve their voters? Don’t these legislators already have vehicles? What is the cumulative benefit of borrowing money so that each of the more than 520 MPs get vehicles? Do these vehicles translate into improved service delivery?

Within the region, we have August Houses, that have provided State owned vehicles for their legislators, however, these vehicles are not the private property of the legislator, but of the State. 

They are not as exorbitantly priced and when the legislator leaves Parliament, the vehicle goes back to the State, to be refurbished and passed on to another department of the State. That is progressive expenditure. 

At about Shs105b, meant for the purchase of vehicles for the legislators, this figure excludes the money for the commissioners and some staff of Parliament, we could build new health units and meet the remuneration of health workers for the next five years.

We could upgrade a number of regional referral hospitals to national hospital status, build and maintain kilometres of roads and enhance the much-needed capitation grants to schools providing Universal Primary and Secondary Education (UPE and USE). 

We also need to bite back at the custodians of those engaged in wasteful expenditure. This should go beyond reprimand to the recovery of the misused funds from their private property. 

The issue of collective responsibility should be set aside so that whoever is charged with public office starts to look at their offices not as an opportunity to amass personal wealth, but an opportunity to better the citizens of Uganda and jealously guard public resources.

We also need to share plans of how these monies we are borrowing will be recovered from the infrastructure projects they are being borrowed for to finance.

Lastly, borrowing money for consumptive purposes should be stopped. Instances in which we borrow to consume or for mere luxury, such as purchase of vehicles for MPs, for instance, should no longer be tabled in Parliament.  Let the MPs buy the cars, through loans, like the rest of us. 

Otherwise calling for suspension from loan repayments does not save the country. 

Cissy Kagaba, Anti-Corruption Coalition Uganda
kagabac@accu.or.ug

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