The Ugandan government plans to boost its revenue collections in an effort to maintain debt sustainability over the medium term, according to Minister of State for Finance, Planning, and Economic Development, Henry Musasizi. The announcement was made during Musasizi’s appearance before the Parliamentary Committee on National Economy to discuss Uganda’s economic performance and the state of indebtedness.
Musasizi highlighted the government’s commitment to increasing revenue, enhancing expenditure efficiency, and supporting private sector growth. These measures aim to ensure the country’s debt remains manageable with a sustainable trajectory.
“While taking into account the need to maintain debt sustainability over the medium term, the government will focus on increasing domestic revenue collections, improving the effectiveness of expenditure, and fostering private sector growth,” stated Musasizi.
Revealing the current state of Uganda’s public debt stock, Musasizi informed the committee that as of June 2023, the total debt stood at a staggering shs. 86.78 trillion. Out of this sum, government securities accounted for shs. 34.57 trillion, while external debt reached shs. 52.21 trillion. These figures clearly indicate the challenges faced by the government in managing its debt burdens.
Musasizi identified two major causes of the national debt: public debt drivers and soaring borrowing interest rates. Addressing these concerns will be a key component of the government’s plan to establish long-term financial stability.
Despite the debt-related challenges, Uganda’s economic expansion remains steady. The Gross Domestic Product (GDP) is projected to grow by 6% in the fiscal year 2023/2024, surpassing the 5.2% growth recorded in the previous year. This positive growth trajectory is expected to contribute to the government’s revenue generation plans by creating a favorable environment for increased economic activities.
