CSOs urge gov't to root for long-term concessional loans, curb corruption to minimise rising public debt.
Drake Nyamugabwa
Civil Society Organizations (CSOs) including Uganda Debt Network, Anti-Corruption Coalition, Transparency International Uganda among others have expressed concern over the increasing public debt and it's relationship to corruption and other drivers.
The CSOs have concerned that if the increasing debt is not tamed is undermining financing of other key development projects and lead to payment of high interest rates.
During a joint press conference held at Uganda Debt Network offices on Friday 16th December 2022, The Program Officer Transparency International Uganda Gerald Paddy Auku said that though there is government commitment to curb down public debt like regulations, there is still an increase in the rate at which government is borrowing compared to the rate of revenue collection, which he said is not talking up
He said that the rising debt if not checked will lead the country to liquidity risks affecting the other investments. They have urged government to consider focus on concessional borrowing for long tem and reduce interest payment, enhanced debt management, among other recommendations.
“Increasing public debt remains a concern of CSOs in view of the alternatives foregone like investment in human capital. If not checked can cause liquidity risk as government continues to embrace non-concession borrowing to find infrastructure projects” he said
Christine Byiringiro, The Program Manager with Uganda Debt Network said that there is need to look at the risk cost associated with the cost of increasing interest payment in relation to the country’s revenue.
“the cost of debt has continued on an upward trajectory. This implies that interest payments have increased relative to the country’s income” she said
The joint statement also highlighted recommendations to government including assessment of the purpose of the loan acquisition by guarantees to ensure high yield investment to repay the loan, clearance of domestic arrears to avoid court case expenses among others.
Uganda’s public debt currently stands at UGX 80 Trillion, with UGX 33 Trillion domestic, UGX 47 Trillion external.
The regulations to guide debt acquisition and management includes Public Finance Management Act 2015, The Debt Management Framework 2018, The Charter for Fiscal Responsibility 2021 among others.
