The Finance Minister, Matia Kasaija, emphasized the government’s inability to continually rely on borrowing to meet ongoing financial demands, many of which could be deferred, postponed, or discarded. Speaking at a pre-budget dialogue organized by the Civil Society Budget Advocacy Group for the 2024/25 financial year, Kasaija asserted his refusal to borrow endlessly, safeguarding the nation’s financial stability. Despite the regular emergence of new requests during Cabinet meetings, Kasaija stressed the importance of discretion in prioritizing, acknowledging that not all demands are urgent or indispensable.
Kasaija responded to concerns voiced by civil society organizations regarding the mounting public debt, which presents challenges to the economy amid sluggish tax revenues. He highlighted the persistent nature of supplementary budget requests over the past decade, despite prior government commitments to eliminate such practices due to their contribution to increased borrowing and subsequent rises in public debt.
As of June 2023, the Auditor General, John Muwanga, reported a substantial surge in public debt, reaching Shs96 trillion. Domestic debt amounted to 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 significant 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 brand 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 sufficient 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 concern 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
