Poor to lose as public debt rises
By MICHAEL WAKABI
UGANDA’S POOR are set to bear the burden of rising public debt in 2019 and beyond, as the proportion of resources allocated to servicing it increases.
Finance Minister Matia Kasaija was this past week forced to respond to concerns over the implications of Uganda’s debt after the 2017/18 Auditor General’s report revealed it had risen by 22 per cent in the year to June 2018, even as the watchdog Civil Society Budget Advocacy Group (CSBAG) warned that this was undermining progress on key social commitments.
Mr Kasaija argued that at $10.7 billion, public debt is still manageable over the medium to long term.
“Public debt levels are comfortably below the international sustainability threshold — which is below 50 per cent of GDP — and significantly below the sub-saharan average of 45.4 per cent of GDP,” he told a news conference on Tuesday.
In its analysis of the proposed allocations under the National Budget Framework Paper for fiscal 2019/20, CSBAG concludes that national debt levels are a matter of concern despite a positive economic growth trajectory.
At $10.7 billion, Uganda’s public debt stock was equivalent to 41.5 per cent of GDP at the end of June 2018. External debt comprised 28.2per cent of GDP while domestic debt accounted for13.3 per cent.
The advocacy group notes that although the proposed spending will expand by 4.9 per cent in the 2019/20 fiscal year, allocations to key social sectors such as health, education, social development, agriculture, water and environment will shrink by 12 per cent. Spending on that cluster will fall from Ush 7.7 trillion ($2.07 billion) in 2018/19 to Ush6.8 trillion ($1.82 billion) in 2019/20.
The allocation to social development will decrease from 0.9 per cent of the total allocations in the current financial year to 0.6 per cent under the proposals for 2019/20. Spending on water and environment will fall from 5.0 per