‘Don’t lecture govt on debt discipline’

The  Secretary to Treasury has lashed out at a section of Ugandans who persistently question the manner in which the government takes on loans that have pushed the country’s public debt stock to Shs96.1 trillion as of June 2023, according to the Auditor General’s report released early this year.

“I see there is so much interest in the debate on public debt because debt isn’t a very good thing. But also, there is something interesting in Uganda, the individuals who fear the public debt are indebted personally to the marrow,” Mr Ramathan Ggoobi, who is also the Permanent Secretary (PS) in the Finance ministry, said during a training session with journalists on Friday.

He added: “I want you as the media, as you interrogate public debt, to help us with corporate and personal debt. Let Ugandans be concerned about personal debt as much as they are concerned about public debt. Because at least public debt has so many people interrogating it.”

PS Ggoobi stopped short of saying that the vast bulk of Ugandans don’t have the moral authority to castigate their government for living above their means. He indicated that some Ugandans are living on unnecessary debt after borrowing money for things that do not generate income. He highlighted a crisis where many businesses are highly indebted while their owners criticise public debt, emphasising the need to be mindful of personal debts, such as business loans, salary loans, personal loans, kwanjula [traditional marriage ceremony] loans, and wedding loans.

“People are borrowing for weddings. What is the collateral? Is it the bride?... How will you pay back? What are you going to earn from the wedding? Because really, the outcome of the wedding is more expenditure....one year after wedding, there is a child, then you will spend on feedinng, housing... ,” he said.

Mr Ggoobi noted that at the end of December 2023, Uganda’s total public debt stood at Shs93.38 trillion ($24.69 billion), with external debt at Shs55.37 trillion ($4.64 billion) and domestic debt at Shs38.01 trillion ($10.05 billion), contrary to figures in the Auditor General’s report for FY2022/2023.

Uganda’s public debt is projected to reach Shs97.638 trillion ($25.716 billion) before the start of the fiscal year (FY) 2024/2025. In nominal terms, Uganda’s public debt to GDP was estimated at 46.9 percent in June 2023. It is projected to end at 47.9 percent by June 2024. The Secretary to the Treasury said this is below the 52.4 percent threshold provided for in the Charter for Fiscal Responsibility for FY 2023/2024 and less than the 50 percent of GDP government policy target for debt sustainability.

PS Ggoobi stated that unlike some countries that invest borrowed money in non-productive ventures, Uganda is investing in projects that generate revenue and will be able to sustain its debt. According to him, 29 percent of the borrowed money was invested in transport infrastructure, including roads, airports, and railways; 28 percent to energy infrastructure like dams and rural electrification; 12 percent to water sources for consumption, irrigation, and livestock; five percent to agro-industrialisation; and the rest to industrial parks,  internet and communication infrastructure, and investments in education and health.

Speaking on Friday at a budget workshop for the FY 2024/2025 with the Uganda Parliamentary Press Association (UPPA), PS Ggoobi noted that most of the funds allocated to transport are earmarked for road maintenance due to the already improved road network in the country. He highlighted that a smaller portion would be used for constructing new roads. The Secretary to the Treasury cited praise from a member of the UK’s House of Lords, whom he said praised the country’s roads.

“I have heard foreigners coming here and they drive around this country. One day, there was a Lord from the UK, who was in my office. He sits in the House of Lords and he told me he has been to Karamoja, he has been to Kisoro, Kasese and he said you have better country roads than the UK,” he said.

Consequently, Mr Ggoobi decried the energy deployed media in pressing for better infrastructure, especially on roads around the country.

“We are going to construct a few new roads, but now emphasis is on maintenance of the tarmac we have accumulated over the years. We have done a good job in accumulating tarmac in the last 10 years,” he said.

He added: “By the way, you journalists know Uganda better, because you are always on the road. What do you see? Why don’t you tell Ugandans? Of course there are [sic] still a big chunk that we must work on, but just compare where you were 10years back as far as tarmac is concerned. But now you join the popular noise in Kampala, that [of] these Kampala potholes. Of course, we need to interrogate that too.”

The Secretary to the Treasury was equally vexed that Ugandans were repeatedly piling fault on the government for the allegedly brutal state of the economy that eventually made it hard for businesses to thrive and hence easily collapse.

“But you see, businesses are like us, they die. There are some people I see in the media that businesses have died, yes businesses are like us, some die and the day one dies, another is born. We don’t want them to die, but that is the natural order. Some businesses will die,” the PS said.

He added: “Me, who is in charge of the economy, I look at: how do I ensure it is only those that can’t be resuscitated to just die without going to hospital? So my job is to ensure we protect businesses from death but eventually, some of them die, but also, some will be born.”

Public reactions

However,  Mr Julius Mukunda,  the executive director of the Civil Society Budget Advocacy Group (CSBAG),  said  the public has legitimate reasons to  ask questions regarding Uganda’s public debt.

“It’s the  public debt we are talking about. All we are saying is that it has become too huge and soon becoming unsustainable.  I agree that people are borrowing for unproductive things, we have also seen the government paying wages using borrowed money.  But since the public debt is our money and affects all of us, let the government be very strict on how it uses it,” Mr Mukunda said.