Baryamureeba, Suruma caution gov't on external debt

Jun 20, 2015

Prof. Venansius Baryamureeba has cautioned government against persistent borrowing, saying the debt would plunge the country into a crisis.

By Francis Emorut

KAMPALA - Prof. Venansius Baryamureeba has cautioned government against persistent borrowing, saying the debt would reach a stage where the country cannot pay, hence risking it to be mortgaged.

"Public debt is going to continue growing and before we know it we would have sold our country and therefore, government should be cautious on borrowing," he said.

Uganda’s external debt is estimated to be sh7 trillion.

The presidential hopeful was backed by senior presidential advisor on finance and planning, Ezra Suruma, who also warned government against excessive borrowing because it would impact negatively on the economy.

"We don't want to go the Greece way which was highly affected because of excessive borrowing. Borrowing should be contained," advised Suruma, who is a former finance minister.

Baryamureeba, who is also the vice chancellor of Uganda Technology and Management University (UTAMU), and Suruma made the remarks during a civil society post budget dialogue in Kampala.

Presenting a paper titled "Opportunities and Risks in the FY 2015/16 UGX23.9 trillion budget," Julius Mishambi, the chairman of Civil Society Budget Advocacy Group cautioned government against domestic borrowing as well, arguing it causes commercial banks to raise interest rates.

"We are not against borrowing. But we are against irresponsible borrowing," Mishambi said.

The meeting, conveyed by Civil Society Budget Advocacy Group, attracted farmers across the country, MPs, academicians, members of civil society as well as tax officials.

Highlights on the 2015/16 budget

Prof. Baryamureeba said the money allocated to education (sh2 trillion) is not enough, as it only meets the needs of the Universal Primary Education (UPE) programme. He argued that each pupil will get only sh104, 000 as fee per term – there are over 8 million pupils enrolled in the UPE schools.

He proposed that the money would have been increased to sh4.8 trillion to cater for other institutions of learning.

On agriculture, the vice chancellor said the money was a drop in the ocean as it can only cater for 5 million farmers, with each getting about sh98, 500.

Corruption problem

Commenting on the health sector, he emphasized the need for having qualified health workers rather than having so many hospitals without them. "In the health sector you are just talking about buildings but there are no qualified health workers.”

The former VC of Makerere University said agriculture, education and health sectors are vital for attainment of middle income status – a level President Yoweri Museveni hopes Uganda will reach by the year 2020.

In his maiden speech last week, finance minister Matia Kasaija (below) allocated the lion's share of money to security (sh1.6 trillion), infrastructure (sh3.3 trillion) and energy (sh2.8 trillion).

Agnes Kirabo, the executive director of Food Rights Alliance, called for increased investment in agriculture sector to fight hunger, pointing out that the May 29 UN report released indicates that 9 million Ugandans sleep hungry and are malnourished.

"Budget policy should be designed to free Ugandans from poverty and hunger.”

Cissy Agaba, the executive director of Anti-Corruption Coalition Uganda insisted that unless the issue of corruption is tackled, allocation of big chunks of money to different sectors would not improve service delivery as the money will again be swindled.

She cited the pension and the OPM scandals in which billions of Uganda shillings were embezzled.

Civil Society Budget Advocacy Group chairman Mishambi lauded Minister Kasaija for allocating funds to construct both 293 primary schools and houses for teachers, saying this is a positive development.

On his part, tax manager Peter Kyambadde called for formation of agricultural banks to enable farmers access capital. "There should be deliberate efforts made to revive cooperatives to assist farmers get capital,” he said.

Prof. Baryamureeba chats with Cissy Agaba of Anti-Corruption Coaltion Uganda (R) and Julius Mishambi of Uganda Debt Network at the dialogue. (Credit: Francis Emorut)

Yumbe MP Huda Oleru urged the civil society group to raise the bar of monitoring and evaluation in resources allocated to different sectors as the politicians are busy electioneering.

"As a watchdog you need to strengthen your capability of monitoring to ensure that citizens benefit from the little resources allocated to each sector.”

Meanwhile, Patrick Tumwebaze, the executive director stressed need for having a national budget that reflects the aspirations of Ugandans – especially the vulnerable.

He urged the citizens to maximize the opportunities created by the budget.

The civil society actors highlighted issues of concern that need to be addressed as:

curbing corruption

reducing dependence on development partners

tackling persistent budget indiscipline

avoiding irregular payments, among others.