Useless borrowing major issue affecting Uganda, says Diini Kisembo

Kampala, (UG):- As of June 2023, each of Uganda’s 45 million people owed shs2.5 million after the country’s debt reached a record high of 96.1 trillion. This represents an increase of shs1 million from December 2020, when the national debt stood at shs65.82 trillion.

In February 2024, the International Monetary Fund (IMF) stated that Uganda’s rising public debt, combined with rising debt servicing costs, stagnant domestic tax revenues, and declining export revenues, are causing debt distress.

“Uganda faces a critical financial challenge as interest payments on loans now consume a significant portion of the budget and domestic revenues,” added the IMF.

In December 2023, the Central Bank of Uganda reported that rising debt servicing costs are putting a strain on tax revenue collection. The report also revealed that shs32 of every shs100 collected goes towards debt service.

The Pearl of Africa has been borrowing since the 1960s to cover its budget deficit caused by insufficient revenue collection.

While borrowing from the World Bank and the IMF, the country’s borrowing capacity was limited by political instability and poor governance.

However, Uganda’s borrowing appetite has been steadily increasing for over four decades. Unfortunately, the funds it borrows end up in the hands of the most corrupt senior government officials and their MDAs.

According to the Inspectorate of Government (IGG), Uganda loses shs1m to corruption every hour. As of 2022, the IGG discovered that shs10m was lost annually to corruption.

Emmanuel Diini Kisembo, a youth leader and ardent supporter of the ruling party NRM from Bunyoro Kitara, recently identified three major issues facing the country. These are corruption, an overly large government structure, and unnecessary borrowing.

“We should not say that the money is going to ambulances; rather, we should allocate funds to broader healthcare needs. For example, money for refurbishing Bombo Hospital, acquiring ambulances, or purchasing medicines should all be allocated to the Ministry of Health.”

In its 2023/24 health budget note, the Initiative for Social and Economic Rights (ISER), stated that despite existing gaps in health service delivery, the budget for the health sub-program was to be reduced by 11.8%.

Provisional allocations for health in the fiscal year 2023/24 were shs4,179.2 billion, down from shs4,739.1 billion approved for fiscal year 2022/23.

According to ISER, only 6% of emergency cases are transported to hospitals by ambulance in April 2023. “A few ambulances do exist with most being privately owned and prohibitively expensive. The government owns just about 1839 type B ambulances. This is less than what is required to provide one ambulance for every 100,000 people (460).

“With the current gap, 95 per cent of constituencies across the country have been left without ambulances as of 2021,” ISER added.

According to the Ministry of Health Policy Statement for 2023/24, the government-owned only five type C ambulances equipped with an intensive care unit and advanced life support.

Health Minister Dr Jane Ruth Aceng Ocero says type C ambulances are currently available at Lira, Mbale, Jinja, and Mbarara Regional Referral Hospitals, as well as Mulago National Referral Hospital.