Sh72 trillion Budget: 'Borrowing for Luxury' amidst widespread poverty, Ssemujju's minority report

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In a stinging response to the proposed sh72.367 trillion national budget for the Financial Year 2025/26, Shadow Finance Minister Ssemujju Ibrahim Nganda, also the Member of Parliament for Kira Municipality, has released a comprehensive minority report, critically dissecting the government's financial plans and highlighting what he describes as a widening chasm between the priorities of the leadership and the dire realities faced by ordinary Ugandans.

The report, released on June 12, 2025, the same day President Museveni and Finance Minister Matiya Kasaija will present the budget, paints a grim picture of a nation grappling with escalating debt, questionable expenditures, and a struggling populace.

Ssemujju's detailed analysis, which he urges the country to consider, focuses on the budget's heavy reliance on borrowing, the ambitious revenue targets set for the Uganda Revenue Authority (URA), the colossal burden of public debt servicing, and what he argues is a disproportionate allocation of resources to a select few, while millions languish in poverty and deprivation.

The looming debt crisis

At the heart of Ssemujju's critique is the government's intention to borrow a staggering sh32.075 trillion, representing 44.3% of the total budget requirement.

This, coupled with sh2.745 trillion in grants (3.7%) and projected tax collections of sh34.051 trillion from URA (47%), leaves the country heavily reliant on external financing, according to Ssemujju.

He highlights a worrying trend, citing the Ministry of Finance's own Medium Term Debt Management Strategy (page 19), which warns of a drastic reduction in concessional lending due to past global recessions.

Consequently, a massive 68% of the borrowing will come from domestic commercial banks and other funds, with only 32% from international institutions like the World Bank, IMF, and ADB.

“Only 9% of the loans to be procured for the budget will be on concessional terms, 6% at semi-concessional, and a substantial 16.7% at non-concessional and commercial terms,” Ssemujju states.

He points out a stark contradiction in government policy, which had committed to restricting non-concessional loans to infrastructure and self-financing projects, but is now using them to fund recurrent expenditures, citing the $789 million loan in 2023 as an example.

The Shadow Finance Minister warns that excessive borrowing from commercial banks is “crowding out the private sector” and pushing interest payments “almost beyond our reach.”

He provides concrete figures: in the current financial year, Uganda is paying sh9.4 trillion in interest to commercial banks and sh1.8 trillion to foreign lenders. The upcoming budget projects interest payments to exceed sh9 trillion.

Furthermore, Ssemujju emphasises the risk foreign borrowing poses to Uganda's reserves. He quotes the Ministry of Finance itself in its Medium-Term Debt Management Strategy complained about expenditure requirements versus realistic revenue projections, which are inflating the fiscal deficit and leading to more borrowing.

The depreciation of the Ugandan shilling against a backdrop of rising interest rates has only exacerbated the debt burden, leading to “reduced foreign exchange reserves” according to Ssemujju.

URA's ambitious target

The report questions URA's ability to meet its ambitious target of sh34 trillion for the next financial year, citing past performance.

URA headquarters in Nakawa. (File)

Ssemujju provides figures: in 2022/23, Parliament approved a budget of sh52.548 trillion, but only sh43.404 trillion was actually raised through taxes and borrowing. Similarly, for 2023/24, the revised approved budget was sh61.669 trillion, but actual collections and borrowing amounted to only sh48.680 trillion.

“On average we have been raising just about sh50 trillion to fund our budget,” Ssemujju notes, suggesting the sh34 trillion URA target may be unrealistic, especially in an election year.

Weight of debt servicing

Perhaps the most alarming statistic presented by Ssemujju is the allocation of sh27.3 trillion, or a massive 38% of the total budget, to debt servicing under Vote 130.

He reveals that Uganda's total public debt stood at sh106.22 trillion as of December 2024, representing 52.4% of the GDP (sh202.7 trillion).

The Ministry of Finance's own report on Public Debt and Grants (March 27, 2025, page 9) acknowledges a “moderate risk of debt distress,” primarily due to slow export growth and a rising debt service burden, which was 31.5% of revenue as of June 2024 and is projected to remain above 20% in the medium term.

The report adds that “Uganda has limited room to absorb economic shocks,” implying that a significant economic downturn could worsen its debt distress.

Ssemujju highlights the absurdity of the situation: “Interestingly, while 27.3 trillion is being allocated for debt servicing, we are seeking to borrow sh32 trillion to fund other budget items. One step ahead, two steps behind. We should, at worst, be borrowing less than we are paying. You cannot repay sh27.3 trillion and then borrow sh34 trillion.”

Chinese loans versus domestic debt

The report reveals China as the largest beneficiary of Uganda's debt servicing, with Uganda having paid China $178.744 million (sh679,228,279,200) as of December 2024.

Of this, sh212,214,952,000 was interest and sh13.2 billion in commission and other fees. Uganda currently owes China sh9.2 trillion, second only to the World Bank (sh18.3 trillion). Ssemujju asserts that “Chinese loans are very expensive.”

Regarding domestic debt, the report points to a discrepancy in figures, with Finance citing sh53.224 trillion (page 23 of the report on loans and grants) and the Treasury Operations 130 Vote stating sh51.7 trillion (page 15).

Ssemujju argues that this “domestic debt” is primarily borrowed from commercial banks to finance “luxurious lifestyles” in the budget.

He further argues that what is termed “domestic borrowing” is largely “foreign (external) because these domestic banks are foreign-owned.”

He specifically mentions South African banks, particularly Stanbic and Stanchart, as the biggest beneficiaries, collecting over sh9 trillion annually in interest from the government.

He highlights that out of approximately 24 licensed commercial banks in Uganda, only four are Ugandan-owned.

Controversial payouts, questionable expenditures

The Shadow Finance Minister's report details several contentious allocations within the debt servicing budget, raising serious questions about accountability and prudent financial management.

One significant allocation is sh247 billion ($65 million) to the Democratic Republic of Congo (DRC) as part of the 325 million ordered by the International Court of Justice for damages incurred during Uganda's invasion of DRC in 1998/99.

This annual payment is for “damage to persons (including loss of life, serious bodily injury, sexual violence, recruitment and deployment of child soldiers, and population displacement), $225 million; damage to property (located inside and outside Ituri), $40 million; and damage related to natural resources (including gold, diamonds, coltan, coffee, timber and fauna), $60 million.”

Uganda is also paying a 6% interest on the outstanding balance. Ssemujju attributes these payments to “bad-mannered NRM leaders” who he claims were responsible for plunder and misconduct.

Another controversial inclusion is sh60 billion for Roko Construction Company, where Uganda is acquiring preference shares in a “collapsing company.”

Ssemujju reveals that Parliament authorised government in July 2022 to acquire 150,000 preference shares in Roko at a cost of sh207.13 billion to be paid over five years.

He states that as of May 31, 2022, Roko's debts stood at sh419 billion to various banks. Ssemujju alleges that President Museveni intervened due to his friendship with Roko's proprietors, describing it as “borrowing to help pay someone else’s debt.”

He further cites the Auditor General's December 2024 report, which states that the shares were “irregularly purchased” and fears future “legal disputes.”

The report also highlights a further allocation of sh465 billion for Enrica Maria Aristidina Pinetti, for the controversial Lubowa project.

This amount, to be deposited in an escrow account accessible only by Pinetti, brings the total amount given to her for Lubowa to a staggering sh1.239 trillion, following a recent supplementary request of sh298 billion, according to the report.

Ssemujju questions the rationale, reminding Parliament that a previous resolution stated no more money should be invested in the project until a value-for-money audit is conducted, an audit that has not yet materialised.

Finally, a curious allocation of sh14 billion is identified to help Mufti Ramadhan Mubajje repay a debt incurred from selling Uganda Muslim Supreme Council farmland to two different people.

Disproportionate spending

Ssemujju's report sharply criticises the substantial portion of the budget dedicated to public servants, who constitute a tiny fraction of the population.

Wage alone will consume sh8.5 trillion, representing 11.5% of the budget. He notes that the Auditor General's December 2023 report stated 396,997 verified public employees, or 0.8% of the total population, while President Museveni on Labour Day, May 1st, quoted 480,000 public servants (still less than 1%).

President Museveni. (File)

Beyond wages, Ssemujju details “other direct expenses” totaling approximately sh4.4 trillion, bringing the total taxpayer expenditure on public servants to sh12.8 trillion, or roughly 16% of the entire budget.

He specifically targets the President's allocation, noting sh500 billion budgeted for his home/residence and sh306 billion for his office, with the residence budget hitting sh1 trillion through supplementary requests this financial year.

Ssemujju sarcastically remarks, “After consuming 16.7% of the entire budget, he fuels his motorcade and goes to check on the rest of the population to find out why they are still poor.”

Parish Development Model (PDM)

While the government touts the Parish Development Model (PDM) as a key initiative for poverty eradication, Ssemujju's report casts a shadow of doubt on its effectiveness.

President Museveni on one of his recent PDM tours. (File)

The sh1 trillion allocated to PDM, intended for 14.8 million Ugandans in subsistence agriculture, represents only 1.3% of the proposed 72 trillion budget.

According to the census, 3.5 million households (33% of 10.6 million households) are still engaged in a subsistence economy, representing 14.8 million people.

Ssemujju highlights that only 832,737 households (or individuals, as only one person per household is targeted) have received PDM money, meaning only 7.8% of the total 10.6 million households, and 23% of the targeted subsistence economy, have benefited so far.

Despite sh3 trillion having been released since PDM's full implementation in 2022/23, Ssemujju raises concerns about its impact.

He cites the Auditor General's report, which found that 2,985 PDM SACCOs in 127 Local Governments lacked registered offices, some reported projects didn't exist, and about 242 SACCOs were implementing “fake projects.”

Ssemujju argues that Parliament should not appropriate more money for PDM without a “genuine and transparent assessment” of its success, measured by “actual people (households) transformed and not amount disbursed and list of beneficiaries.”

He questions whether the revolving fund has actually started revolving, referencing the Ministry of Finance's own warning in their policy statement about project underperformance due to inadequate monitoring and evaluation.

State of ordinary Ugandans

The report then pivots to the stark realities faced by millions of Ugandans, contrasting these with the budget's priorities.

Ssemujju's findings, based on UBOS census data, paint a picture of widespread deprivation:

Poverty of Basic Needs

14 million Ugandans (31% of the population) lack at least two sets of clothing or a pair of shoes.

This is particularly prevalent in Karamoja (62% without shoes, 37% without two sets of clothing) and Busoga (26% without two sets of clothing, 33% walking barefoot). UBOS highlights these as basic measures of household welfare and personal dignity.

Massive unemployment

Out of Uganda's working population of 25,155,922 (56.7% of the total population aged 14-64), only 9.4 million are employed, leaving a staggering 15.7 million people without jobs.

Ssemujju disputes official government figures, including President Museveni's recent claims of 1.4 million in factories, 3.6 million in agriculture, and 5 million in services, citing the Auditor General's lower figure for public service employees (396,997).

Among youth aged 10-30 (10 million), 1.6 million (16%) are unemployed, leading to “restlessness.”

Limited access to formal economy

Only 2,767,421 Ugandans (10% of the working age group) own bank accounts, suggesting a large informal sector and precarious employment.

A 2022 Bank of Uganda survey revealed that 49.2% of Ugandan employees are paid sh150,000 or below, with only 0.9% earning sh1,000,000 and above.

Environmental and health challenges

28,210,000 people (62% of the population) still rely on firewood for cooking, with 89% using firewood and charcoal, leading to adverse environmental impacts and health problems.

In Karamoja, 56% cook in open spaces. Only 25% of households use electricity for lighting, and 28% use solar.

Transportation woes

Bicycles remain the primary means of transport for 20% of the population (approximately 9 million people), while 12% (5.5 million) own motorcycles and 3.9% (1.8 million) own vehicles, indicating a “boda boda and bicycle economy.”

Subsistence agriculture dominance

Close to 14.8 million Ugandans (33% of households) are still engaged in a subsistence economy, with 62% of the entire population (28 million people) relying on agriculture for survival.

Inadequate housing, sanitation

About 5.6 million families (53% of households) share a single room, with 70% of households in Karamoja having one-room dwellings.

A concerning 7% of Uganda's population lacks toilet facilities, engaging in open defecation, with Karamoja at 60%. Only 4.7 million households have improved sanitation facilities.

Widespread food insecurity

A staggering 20 million Ugandans (46% of the population) are moderately or severely food insecure, with Karamoja (63%), Teso (50%), and Bukedi (50%) being the worst affected.

Ssemujju attributes this to 98% of the country relying on rainwater for agriculture, with only 4% utilising irrigation, despite 28 million people depending on agriculture.

Recommendations for a people-centred budget

In conclusion, Ssemujju Ibrahim Nganda urges a fundamental restructuring of the budget to address the pressing socio-economic challenges.

He points out the government's previous disregard for parliamentary allocations, citing instances where money for tractors (sh300 billion, now reduced to sh25 billion) and the completion of health centres (sh60 billion, now reduced to sh25 billion) was diverted.

He proposes identifying another sh1 trillion within the budget to address challenges like improving community access roads, which are in a bad state across constituencies, and investing in initiatives to improve the living conditions of the population. This, he suggests, could be saved from either wage or non-wage expenses.