Govt seeks ‘urgent’ Shs380bn loan from local banks
If the new budget request is approved, it will increase domestic expenditure from Shs1.783 tillion that was approved in the 2018/19 Budget to Shs2.163 trillion and further drive up the domestic debt stock to Shs13.386 trillion. The government's domestic debt stock stood at just Shs5.091 trillion at the end of 2011/2012 financial year, meaning it has almost tripled since then.
NATIONAL | An urgent need has arisen which requires borrowing $100 million (about Shs380 billion) internally to finance a classified expenditure, Finance and Economic Planning minister Matia Kasaija has said.
Presenting the proposal for additional expenditure to Parliament on Tuesday, Kasaija said that, of the Shs32 trillion current fiscal budget, Shs9.5 trillion is to be financed through borrowing, including Shs1.7 trillion from the domestic resources.
“The Shs380 billion expenditure was not budgeted for and is a fiscal deficit since it is over and above the approved Budget for this financial year. These funds are required immediately and since they cannot be raised by an increase in tax collection or external borrowing, all of which take long to accomplish, hence the request to borrow locally,” the minister told Parliament.
On November 25, President Museveni wrote to Minister Kasaija bemoaning that “with a GDP of Shs110 trillion, Uganda should now be budget-efficient if we only collected that would be 30% of the GDP.”
Museveni said much of the non-revenue budget expenditure is borrowed money, paid back with interest. “Currently, we are spending Shs3.4 trillion each year for debt repayment,” added Museveni, who ripped into Uganda Revenue Authority and Kampala Capital City Authority for what he called failure to raise the tax base by busting tax concealment and evasion in their jurisdictions.
However, the government has always clamoured for additional funds for classified operations, mainly that of the UPDF and State House activities. In May, a section of legislators raised concerns over the rising “Black Budget” for the military.
At the time, the government had tabled a request for Shs370 billion in supplementary budget for UPDF secret operations, with Butambala County MP Muwanga Kivumbi saying the increasing classified expenditure may become an avenue for government to hide money and later use it for political activities, at the detriment of the economy.
If the new budget request is approved, it will increase domestic expenditure from Shs1.783 tillion that was approved in the 2018/19 Budget to Shs2.163 trillion and further drive up the domestic debt stock to Shs13.386 trillion.
The government’s domestic debt stock stood at just Shs5.091 trillion at the end of 2011/2012 financial year, meaning it has almost tripled since then.
With the financial year still having six months to ride on the back of overburdened taxpayers, the debt is certain to be tripled even before March as things stand, but with little glimmer of hope that the government can ever clear them out.