Uganda President Yoweri Museveni has said his government is keen on cutting or totally doing away with borrowing to finance its budget for the 2023-24 financial year.
In a statement shortly after delivery of his Sh2 trillion budget, Museveni said Sh643 billion will go into debt repayment.
"While I support that budget because there is no other solution in the short-run, it is important to know that UG Sh17 trillion of that budget, is to pay debts," he said.
"Many of these debts, were being pushed by the neo-colonial public servants, until recently when I put down my foot and insisted on approving every loan," Museveni added.
"The way forward is that we should borrow less or not borrow at all. With discipline, we do not have to borrow at all," the President said.
Museveni appeared to be reading from the same script as President William Ruto who has spoken firmly against borrowing to sustain recurrent expenditure.
As a result, Ruto has proposed a raft of new tax measures in the Finance Bill, 2023 to raise the revenue base and finance his Sh3.68 trillion budget for the 2023-24 financial year.
According to National Treasury Cabinet Secretary Njuguna Ndung’u the current national debt stands at Sh9.9 trillion against a debt ceiling of Sh10 trillion.
This leaves the Kenya Kwanza administration with room to borrow just Sh100 billion.
Ndungu said on Thursday that the government intends to cut the budget deficit for the fiscal year starting next month to 4.4 per cent from an estimated 5.8 per cent in this financial year.
This means the government is keen on raising more revenue from own-source revenue by increasing existing taxes and taxing new sectors.
On Thursday, Ndung'u said the global shocks had increased the risks associated with debt but affirmed government's commitment to honour all public debt obligations once they fall due.
