The Forum for Democratic Change (FDC) is concerned with continued reckless borrowing to finance Mr. Museveni and his family’s extravagant lifestyles and insatiable appetite for state power.

While the stated objective in the draft budget (Budget Framework Paper) is increasing average household income and improving quality of life, the real and hidden purpose is to finance extravagance and to rent support for the aged and increasingly unpopular president.

In real terms, proposed total budget for the next financial year under consideration by Parliament, has increased from Shs 48.1 trillion of this financial year to Shs 49.9 trillion. That is an increase of Shs 1.8 trillion.

Debt repayment including interest camouflaged by Mr. Museveni’s Finance Minister as treasury operations, has increased from Shs 15.1 trillion to Shs 17.5 trillion.

What this means is that 35% of next financial year’s budget is debt and interest payment. Debt and interest payment has been added an extra Shs 2.3 trillion in the proposed budget. The entire budget has increased by Shs 1.8 trillion.



Bank of Uganda in its latest report of December 2022, is sounding a warning about our public debt management.

In the report, Bank of Uganda says, domestic revenue (money collected by Uganda Revenue Authourity), is no longer sufficient to finance the country’s need and pay our debt.

Our debt as reported by Ministry of Finance and captured in the Bank of Uganda report is now at Shs 79.9 trillion which is 49% of the GDP. External debt according to Ministry of Finance report of March last year stood at Shs 44 trillion (12.4 billion) and domestic debt was Shs 25.4 trillion ($7.2 billion). China remains our biggest lender with over Sh 11 trillion ($3 billion).

What is sad for Uganda is that according to the Bank of Uganda report, “domestic debt interest payments continued to be in breach reflecting liquidity pressures on the domestic revenues to finance the domestic debt liabilities at the expense of other priority budgetary items.

Bank of Uganda reports that on average 37% of revenue collected goes to debt and interest repayment.

Bank of Uganda also reports that as a result of failure to raise enough money to repay our external debt, we have now encroached on our national reserves reducing it from $4.3 billion to $3.6 billion equivalent of 3.5 months of imports as of last month. The reserve was enough to import goods and services for 4.8 months. The reason the reserves were encroached on is because we have an external debt serving of about $1.3 billion to repay annually. And while you can default on domestic debt like we have already done, you can’t play around with external debt.



With that picture in mind, the FDC implores citizens on whose behalf this debt is contracted to listen as Museveni ministers present their next financial year’s priorities. Priorities such as buying of vehicles for our great leader, medals for his supporters, seminars, workshops and special meals.

Mr. Museveni as of last year, he was employing more than 1600 employees at his residence (state House) including his wife, children and in-laws. It appears, every relative that can access Museveni’s bedroom leaves with an appointment letter. The wife is a minister for education, the son Muhoozi Kainerugaba is a senior presidential advisor, the brother Salim Saleh is a senior presidential advisor, son in law Odrek Rwabwogo is a senior presidential advisor, Museveni sister Violet Kajubiri Froelich is vice chairperson education service commission and her husband is running Uganda Printing Corporation.



Public debt in nominal value stood at Shs. 79,938.1 billion (appx. 49 % of GDP) in October 2022.

Public debt remains sustainable. Public debt as a ratio to GDP is projected to rise further in the medium term and peak at about 53 percent before gradually easing and returning to the Government target of

50 percent by the end of FY2024/25. However, public debt servicing continues to exert pressure on domestic revenues. Total debt service (domestic & external) as a percentage of domestic revenues averaged 37 percent in the first four months of FY2022/23. Although most all debt risk indicators were within the 2018 PDMF thresholds, domestic debt interest payments continued to be in breach, reflecting liquidity pressures on the domestic revenues to finance the domestic debt liabilities at the expense of other priority budgetary items. Moreover, external debt serving which is projected to average US$ 1.3 billion per year between FY2022/23-2025/26 remains a major strain on international reserves.

Uganda’s external position weakened in the 12 months to October 2022, reflecting adverse spillover effects associated with the Russia-Ukraine conflict, especially on the commodities terms of trade which exerted pressure on the trade balance, keeping the current account on the weakening path. The financial account surplus recorded a steep contraction due to a surge in the outflow of short-term capital and shrinkage of loan disbursements to the government amid increased external debt service.

The combination of a widening current account and reduced financing resulted in an overall BOP deficit to a tune of US$ 545.2 million in the year to October 2022 from BOP surpluses recorded for similar periods in the previous two years.

Similarly, on a quarterly basis, the current account deficit widened although marginally due to the widening of the services deficit on account of reduced inflows from tourists due to the Ebola epidemic.

While the financial account surplus somewhat recovered on account of good performance of FDI and drawdown deposits assets abroad by banks during the quarter to October 2022, it remained insufficient to cover the current account deficit culminating in an overall BOP deficit of US$184.9. Consequently, gross reserves contracted to $3,610.8 million or equivalent to 3.5 months cover of imports of goods and services at end of October 2022, down from a stock of US$4,331.2 million equivalent to 4.8 months cover of future imports of goods and services as at end October 2021.





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