The Finance Minister, Matia Kasaija, underscored that the government cannot continually resort to borrowing to fulfill incessant financial demands, many of which can be postponed, delayed, or eliminated. Speaking at a pre-budget dialogue organized by the Civil Society Budget Advocacy Group for the 2024/25 financial year, Kasaija asserted that he refuses to borrow indefinitely, safeguarding the financial stability of the nation. Despite the regular emergence of new requests during Cabinet meetings, Kasaija emphasized the importance of discernment in prioritizing, acknowledging that not all demands are urgent or indispensable.
Kasaija responded to concerns voiced by civil society organizations regarding the burgeoning public debt, which poses challenges to the economy amidst sluggish tax revenues. He highlighted the persistent nature of supplementary budget requests over the past ten years, despite previous government commitments to eradicate such practices due to their contribution to heightened borrowing and subsequent increases in public debt.
As of June 2023, the Auditor General, John Muwanga, reported a substantial surge in public debt, reaching Shs96 trillion. Domestic debt accounted for Shs43.6 trillion (45.4 percent), while external debt stood at Shs52.4 trillion (54.6 percent). The escalating public debt continues to strain domestic revenue, projected to decrease from Shs25.2 trillion in the 2023/24 financial year to Shs21.7 trillion in the 2024/25 financial year.
The allocation of substantial funds to debt servicing, a major budgetary component, is anticipated to rise to Shs3.2 trillion in the 2024/25 financial year from Shs2.6 trillion, diverting resources away from priority sectors of the economy.
Kasaija also addressed criticism from certain government officials who label him a “miser” for rejecting specific supplementary requests. He emphasized the inevitability of financial constraints, underscoring the significance of prioritizing sectors with substantial economic impact, recognizing that financial resources, regardless of the amount, will never be adequate for every sector.
The government has identified key priority sectors for the 2024/25 financial year, including investments in human capital, infrastructure (roads), peace and security, electricity generation and transmission, and effective disaster management. Kasaija attributed fiscal indiscipline to ministries and government entities that fail to efficiently utilize allocated funds, stressing the necessity for prudent financial management.
Julius Mukunda, the Executive Director of the Civil Society Budget Advocacy Group, expressed apprehension about the economic repercussions of escalating debt, urging the government to address issues such as imprudent borrowing and spending. He emphasized the potential for savings in areas such as domestic and international travel, entertainment, and welfare
