By Aggrey Baba
Finance Minister Matia Kasaija has highlighted the severe limitations in Uganda’s fiscal space, stressing that funding new government proposals through additional borrowing is not a viable long-term solution.
Speaking at a National Resistance Movement (NRM) caucus meeting at State House Entebbe recently, Kasaija explained that Uganda’s current financial position is constrained due to rising debt and high interest payments.
He urged MPs to focus on trade-offs, prioritizing essential activities within the budget as the country prepares for the 2025/26 financial year.
[You know, a bird in hand is worth two in the bush]. “Our fiscal space is under pressure, and borrowing more to fund new initiatives will only stretch us further,” Kasaija told the MPs. The minister emphasized that Uganda must rely on internal resources and carefully prioritize its spending to ensure financial health.
The minister also provided an update on the government’s budget for the upcoming year, revealing that the total funds available, after accounting for domestic arrears and debt repayments, amount to just ugx 40 trillion. This amount will be allocated to crucial areas, including infrastructure, human capital development, and wealth creation programs.
Key allocations include Ugx 2 trillion for agro-industrialization, Ugx 3.3 trillion for infrastructure development, and Ugx 2.1 trillion for the Parish Development Model. Kasaija also noted a substantial increase in the budget, with domestic revenue projected to rise by Ugx 2 trillion, totaling Ugx 35.7 trillion.
Despite this increase, Kasaija warned that the government must exercise caution to avoid worsening the national debt.
As part of the broader vision for the next fiscal year, the government plans to focus on critical sectors such as education, healthcare, and security, with significant funding directed towards these areas. For instance, Ugx 2.8 trillion has been earmarked for healthcare, while ugx 4.4 trillion will go towards education.
The MPs were reportedly silent after Kasaija’s presentation, with President M7 confirming his approval of the proposed budget. “This is the direction we need to take. Let’s focus on key priorities, such as improving infrastructure, creating jobs, and boosting economic growth,” Museveni said, as the MPs agreed to reconvene on March 7 for further discussions.
In a country where fiscal discipline is crucial, Kasaija’s words echo an age-old proverb, that [The best time to plant a tree was 20 years ago. The second best time is now].
It is clear that Uganda’s government is taking steps now to address its financial challenges, with a focus on sustainable growth rather than quick fixes. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
