Hon. Ibrahim Ssemujju, Shadow Minister of Finance, raised alarming concerns at the CPA Economic Forum about Uganda’s escalating public debt. He emphasized that Uganda faces a critical economic challenge as its debt levels continue to rise unabated.
Ssemujju disclosed startling figures, revealing that Uganda pays China a staggering 1.1 billion shillings daily for debt repayment, with an additional 380 million shillings going towards daily interest alone. He criticized what he described as inefficient borrowing practices, highlighting that Uganda spends 443 billion shillings annually in commitment fees for funds that remain unused despite borrowing.
“The country is deeply indebted, with detrimental effects on our economy,” Ssemujju stated emphatically. He pointed out that Uganda’s debt has surpassed the IMF’s recommended threshold, reaching 53% of GDP in the latest fiscal year. This heavy debt burden consumes over 47% of the national budget, severely limiting investments in crucial sectors like health, education, and infrastructure.
The forum also featured Corti Eliab Paul Lakuma, who underscored the necessity of better debt management to prevent excessive borrowing from crowding out essential expenditures. He noted that despite infrastructure and COVID-19 response projects contributing to debt accumulation, Moody’s recent downgrade of Uganda’s credit rating reflects mounting concerns over debt sustainability.
Lakuma further highlighted challenges posed by external financial conditions and the potential impact of controversial legislation on foreign investment and aid. He echoed IMF recommendations for fiscal consolidation to mitigate financial risks while prioritizing social and development spending.
The CPA Economic Forum, held from July 3–5, 2024, served as a crucial platform for stakeholders to discuss these pressing economic issues and propose policy measures aimed at safeguarding Uganda’s fiscal stability amidst mounting debt pressures.
