Of late growing concern among both experts and the general public has arisen on Uganda’s high debt levels.
These feel that the country should drop it’s current spending sprees due to the present economic mishaps.
According to the world bank, an increase in government expenditure to the tune of an estimated 25% against the deficit of nearly 10% funded through domestic borrowing and non concessions terms could have serious implications for debt and budget distortion through supplementary budgets.
While addressing journalists, Tony Thompson the country manager of World Bank in Uganda advised the country on which measures to take to beat the pandemic economic crisis.
“For what the government can do to revive the economy and build it back better , we recognize and recommend that it should not be just about macroeconomics and stimulus packages, but to address environmental and structural issues as well. Its good to build a resilient and inclusive economic environment that serves all Ugandans better.” Thompson said.
Rachel Sebudde a senior economist with the World Bank said that government had to plan well and avoid budgetary pressures.
She said that it was excusable for government on spending on unclassified emergencies but added it had to be transparent and accountable. She however showed great concern for the rising spending on security.
” It’s a worry that security spending is high on the rise. It’s on a record high of 30% of all the revenues that the country is getting compared to what it was five years ago when it was 15%.” Sebudde said.
Sebudde added that Uganda had to pay her debt fast due to the nature of it’s debt structure a thing that would strain her resources.
“When you look at the debt structure, Uganda has to pay faster, because we are borrowing at shorter terms and high interest.” Sebudde said.
This literally means that the debt payment takes much of the revenues collected amounting to a total of 60%.
Uganda however though has remained resilient and steady compared to her other regional neighbors. It’s therefore hoped that this will be rectified soon.
The economy is projected to be growing at a 3% rate by the end of this financial year.
Talking about this same, Adam Mugume the executive director at the research and policy, world Bank said that the economy is starting to improve.