Uganda plans to borrow 2.5 Trillion UGX to cover 2019-2020 Budget gap2 min read
Uganda plans to borrow 2.5 Trilions Uganda shillings ($665 million) to finance a shortfall in its 2019-20 budget as revenue under performs and the government fails to get funds it expected from the World Bank.
The government is seeking lawmakers’ approval for loans of 300 million euros , according to a statement on the parliament’s website, citing state minister for finance, David Bahati.
Uganda is facing difficulty in funding its spending plans of 40.5 trillion Uganda shillings ($11 billion) this fiscal year with increased investment in roads leading to oil fields and tourist destinations, as well as the reintroduction of a national airline.
The failure to meet revenue targets threatens to widen further a budget deficit forecast to reach 8.7% of gross domestic product in the year through June.
The state may not be able to collect 170 billion shillings in taxes from electronic devises and 175 billion shillings in rental levies as earlier anticipated due to delays in starting required administrative measures, according to the statement.
The government will probably not receive 2.4 trillion shillings it expected in capital-gains tax and an unspecified amount of funds in budget support from the World Bank. The anticipated renewal of the license of wireless carrier MTN Group Ltd.’s local unit hasn’t been concluded, which means a delay in fees of about $100 millionto the government.
The already stretched budget is now facing new spending pressures from insecurity following a spate of unexplained killings in the country, the rise in political pressure from opposition leaders led by Kizza Besigye who in a tweet early this morning said , ”Economic noose intensifies grip on NRM/M7 Junta, despite public posturing about state of economy. A result of many years of focussing on regime survival activities instead of sustainable inclusive Human & Economic devlp”
New demands may require an additional 1.4 trillion shillings, according to Bahati.
The government is looking at borrowing from Standard Bank Group Ltd.’s local unit and the Trade & Development Bank,