Gov’t to Borrow UGX 1.7 Trillion to Finance Budget

The Government has proposed to borrow 1.73 trillion Shillings to finance the country’s development and infrastructure budget for the current financial year 2022/2023.

Uganda Radio Network has learnt that the Minister of Finance, Matia Kasaija has already submitted to Parliament a formal request to borrow money from the Standard Chartered Bank and other financial institutions.

Members of Parliament sitting on the National Economy Committee have also been notified of a meeting Monday next week to urgently consider the government request.

“Notice is hereby given that the committee on National Economy will have a meeting with the Ministry of Finance to consider the urgent assignment of scrutinizing the request by the government to borrow up to Euro 455.03 million to finance the development and infrastructure budget for the financial year 2022/2023,” reads part of a notice written to MPs.

According to the meeting notice, the National Economy committee is expected to present a report to parliament on Wednesday 2nd November 2022.

Since the new financial year started on 1st July 2022, there has been an apparent lack of resources for running government business and several government entities continue to report shortages in staff salaries, and development budget, among other expenditure limitations and to the general public because the government is too broke to support its budget.

In the first quarter of the financial year, only 10.25 trillion Shillings out of the expected 14.57 trillion Shillings were released by the Ministry of Finance creating a deficit of 4.3 trillion Shillings. The first quarter of the financial year runs from July to September.

Documents before the Finance Committee of parliament authored by the Minister of State for Finance, Henry Musasizi revealed that 5.62 trillion of the 10.25 trillion Shillings released went to debt and interest payment and the remaining 4.67 trillion Shillings was released for discretionary expenditure by MDAs.

A breakdown of the released funds shows that 1.603 trillion Shillings catered for wages, 1.813 trillion Shillings for non-wage, 596.7 billion Shillings for the Development budget, and 661.9 billion Shillings for arrears.

There was zero development expenditure release except for the Ministry of Defense, State House, Ministry of Works, and Uganda Revenue Authority -URA equipment.

But while releasing money for the second quarter of the budget early this month, the Permanent Secretary of the Ministry of Finance, Ramathan Goobi said that the government withheld substantial amounts of funds which were supposed to be released in the first quarter of the financial year 2022/2023, as a way of controlling the count of money in circulation.

He said that this fiscal action came as a way of supplementing the Bank of Uganda’s monetary policy where it increases the interest rates to tame the demand for loans by the public.

For the second quarter, the Ministry released a total of 7.3 trillion Shillings and Ggobi explained that the government was not broke when it failed to release all the budgeted funds for the last quarter.

Ggobi said that the economy was recovering, but challenges like the rising foreign exchange rate and high inflation were affecting this recovery. 

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