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HomeNATIONAL NEWSUganda's Appetite For Loans Pushes Public Debt To Shs96.68Trillions

Uganda’s Appetite For Loans Pushes Public Debt To Shs96.68Trillions

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Following the enactment of the Anti-Homosexuality Act 2023 by the Ugandan Parliament and signed into law by president Museveni. There was uncertainty on what the future holds as Westerns powers went on rampage showing unhappiness over the new law in Uganda that comes with tough punishments including a death penalty, life imprisonment and huge fines to those convicted.

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Upon learning that the Anti-Homosexuality Act has been signed by president Museveni, US president Joe Biden in his strong worded statement warned that Uganda would face it rough if the new law is not repealed.

In his statement, Biden threatened of tough economic sanctions, visa sanctions and Uganda would lose its membership in the lucrative AGOA business forum which is a gateway for Uganda’s products to the American Market and also a line of investments from the US.

As of today 9th January 2024, Uganda remains in a fix and not certain what more the Western powers have in stock for the Pearl of Africa as the World Bank suspended funding to Uganda last year in October.

Following the announcement that no more funding will be accepted from Uganda by the World Bank, a visibly disappointed Museveni hit back at the funding agency for using money to coarce African countries into accepting such indecent behaviors which undermine the African culture and values.

Museveni would later reveal that some technocrats would go borrow money even when it was not needed until he took over the process and no loan is now taken without his authorisation.

In December, Parliament approved loans worth over Shs6.868trillion to fund a supplementary budget; construction of e-government infrastructure and implementation of climate smart agriculture projects and media would later report in January that government borrow Shs7trillion in 7 days.

According to the State of the Economy report released by Bank of Uganda in December 2023, debts continue to pile a lot of pressure on tax revenues.

“Although recurrent expenditure also underperformed the budget, interest payment overshot the budget by Shs55.5 billion reflecting high interest rates amid tight financial conditions”, the report reads in part.

“Interest payments and external principal repayments exert elevated pressure on tax revenues to the extent that for every 100 shillings collected in tax revenues, 32 goes to debt service, diminishing resources available for service delivery” the BoU report observed.

While handing over his audit report for the financial year ending on 30th June 2023 to the speaker of Parliament, the Auditor General revealed that Uganda’s total public debt as at 30th June 2023 stood at Shs96.168Trn, comprising of domestic debt stock of Shs43.696Trn and external debt stock of Shs52.472Trn, with the report noting that Uganda’s debt in five years has increased by 107%.

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