Govt owes Central Bank Shs2.5 trillion matured securities
Bank of Uganda (BoU) Deputy Governor Micheal Atingi-Ego addresses lawmakers on the Parliament Finance Committee at Parliament on January 10, 2023. PHOTO/HANDOUT
What you need to know:
- In Uganda, a cost-of-living crisis has persisted in the last seven months- marked by a sharp increase in prices of essentials- even as authorities attribute the country’s beleaguered economy to global macroeconomic shocks.
Government owes Bank of Uganda (BoU) Shs2.5 trillion in form of matured securities, Parliament has learnt.
“At the end of 2021/2022, there was a Shs2.5 trillion that was outstanding on account of non-reimbursement to Bank of Uganda for the matured securities,” BoU Deputy Governor Micheal Atingi-Ego told Parliament on Tuesday.
According to Mr Atingi-Ego, Uganda’s central bank had agreed with government that the money is repaid within two financial years thus the Shs1.25 trillion reflected in the Budget Framework Paper for the coming Financial Year 2023/2024.
Mr Atingi-Ego’s revelation followed an inquiry from the Parliament Finance Committee chairperson Kefa Kiwanuka (Kiboga County) who questioned “an unclearly described Shs1.25 trillion domestic debt payment indicated in the budget framework paper.”
“Because of the Covid-19 impact, government could not raise sufficient revenue to pay that amount,” Mr Atingi-Ego explained before Parliament’s Finance Committee where he appeared in-person to submit on the country’s economic performance and outlook.
However, the BoU chief highlighted that it was not true that government took any loan from BoU but there were initial plans to take an advance in FY2021/2022 as per the Public Finance Management Act (PFMA) provision of accessing 10 per cent of revenue. This did not materialise.
“What we are aware of, is when the government securities that have been issued mature, BoU immediately redeems those securities and then makes a claim and waits for a reimbursement from government,” Mr Atingi-Ego stated.
As the government continues to borrow heavily to plug revenue shortfalls, the country’s public debt stock hit Shs80 trillion in November 2022, with a constrained resource envelop amid growing spending appetite, something that raises serious legislative concern.
In Uganda, a cost-of-living crisis has persisted in the last seven months- marked by a sharp increase in prices of essentials even as authorities attribute the country’s beleaguered economy to global macroeconomic shocks.
Ending October 2022, Uganda’s inflation rose to 10.7 percent, up from 10 per cent in September. That figure was less by 1 per cent in August 2022.
