By Mulengera Reporters
Uganda’s external debt has climbed to alarming levels, reaching UGX 54.36 trillion in the 2023/2024 financial year, as highlighted in the Auditor General’s latest report.
This marks a 2.2% increase from the previous year, driven primarily by multilateral creditors. While debt from bilateral creditors and commercial banks showed slight reductions, the country’s reliance on borrowing remains unsustainable.
The fiscal deficit, which stood at UGX 16.08 trillion for the year, underscores the gap between the government’s ambitions and its revenue-generating capacity.
Despite efforts to boost domestic revenue, which grew from UGX 23.37 trillion in 2021/2022 to UGX 30.89 trillion in 2023/2024, expenditures consistently outstrip earnings.
The Auditor General emphasized the long-term risks of this borrowing trend, warning of its impact on fiscal sustainability. Recommendations include enhancing domestic revenue mobilization and enforcing fiscal consolidation to reduce dependency on external debt.
Uganda faces a critical choice, either to continue borrowing or focus on self-reliance. As the saying goes, [Debt is like a sword, it can protect or destroy]. The government must wield it wisely to ensure a stable financial future for the nation. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
