Civil Society Cautioned Government On Soaring Public Debt
By Pressug Online News Publication
The Civil Society Budget Advocacy Group 'CSBAG' has advised government to stop what he called “appetite expenditure” if it is to manage the public debt which is growing at the fast rate.
Mr. Julius Mukunda who was speaking at a CSO Pre-Budget Dialogue on the national budget FY2021/22 at Hotel Africana Kampala say's that the so called "Appetite Expenditure" should be tamed in order for the public debt to be managed.
Although the uganda’s Public Debt still manageable, has increased by 128% from Shs. 29.8Tn to Shs. 65.97Tn as of January 2021, according to Bank of Uganda Report of March, 2021.
The public debt has for the years substantively rose, from Shs 28.7Tn in the FY2015/16 to Shs 33.5Tn in the FY2016/17 (16%), then to Shs 41.4Tn in the FY2017/18 (23.6%) to Shs. 46.05Tn in the FY2018/19.
Mukunda said this has led to the cost of debt to continue rising and that interest payment is projected to increase from Shs 4.08Tn in the FY 2020/21 to Shs 5.03Tn in the FY 2021/22.
The inadequate performance of loans has also led to loss of public funds, he said. The auditor general report 2020 noted that loans worth Shs. 1.3Tn performed poorly, some reached expiry without full disbursement.
"It's important that subsequently borrowing should target priority projects, respective Institutions need to exercise effective debt management and if Uganda is to reap the expected economic returns to spur economic transformation" Said Mukunda.
“Some of the ways of stopping the appetite to spend is to stop creation of new districts, formation of new administrative units; you should also sequence projects, don’t start so many projects at the same time and this will help you to manage your cash flows,” he said.
Meanwhile this will devoid Uganda from being susceptible to fiscal risks in order to achieve the desired social economic transformation. Adding that, "If the national budget FY2021/22 is effectively implemented with a high level of fiscal discipline, it will gradually aid economic recovery from the devastating Covid-19 shock's" Mukunda Said.
The national budget needs to be people centered and the will help to achieve to improve household income and livelihood as envisaged in the National development plan 111. However this will portray the citizens position and provide alternatives of effectively implementing it to address the citizens needs.