Economy

Gov’t to Borrow Sh6 Trillion to Finance The Budget

Gov’t to Borrow sh 6 trillion to Finance the Budget-Shortfall

The government is seeking Parliament approval of sh 6 trillion shillings to Finance a shortfall in the 2020/2021 national budget.

According to minister for state for Finance Planning Economic Development Hon David Bahati, the supplementary request to the Parliament Committee on the National Economy, the fund is needed to finance some important government priorities as a result of shortfall of sh2.5trillion in the first quarter of the financial year 2020/2021.

“As you recall we approved a budget of 45 trillion shillings, this 45 trillion was going to be met through borrowing domestically and through revenue collections but because of covid, we are experiencing some challenges which we are projecting revenue shortfall of 2.5 trillion shillings Hon Bahati explained.

He added that the government has got some important priorities in addition to the approved budget that has got to be financed such as some covid-19 related activities and others of classified nature.

He said the government is therefore taking action to look for extra resources from the domestic market of about over 4 trillion shillings and USD600 million from the International Monetary Fund (IMF) to finance the budget deficit for the financial year 2020/2021,”

On worries about over-borrowing, the minister assured the country that there is no need for alarm, explaining that Uganda is the only country in East Africa which is under 50%.

“Even if you put everything we are borrowing now, we still remain below 50% which is the only country in East Africa, the rest of the countries have gone 60%-70-130, others are in 200%, so Uganda remains conscious about our debt portfolio, at the same time the government must raise resources Hon Bahati noted.

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