Uganda’s growing debt burden and the pace at which the debt is accumulating have now become a matter of concern to some of the stakeholders monitoring public debt levels. According to the Bank of Uganda, over the last two years alone (2019-2021), Uganda’s debt increased by 49.5 per cent from Shs47.1trillion in August 2019 to Shs70.4trillion in June 2021.

As a result, the Uganda Debt Network, Anti-Corruption Coalition Uganda, Action Aid International Uganda and Transparency International Uganda have noted that they are deeply concerned with the state of affairs, describing it as dangerous path to tread.
One of the main worries, according to the civil society organisations monitoring the public debt situation pertains to the low return on investment resulting from the borrowed resources.  

“The productivity of these debt resources however, is low with the World Bank observing in one of their Economic update on Uganda that for every dollar invested in Uganda’s capital infrastructure, only seven-tenth (0.7) of a dollar has been generated which is far below countries that have successfully undergone structural transformation,” said Ms Christine Byiringiro, a policy specialist and an expert on matters public debt. 

She continued: “As an example, every dollar invested in the development of the interstate highway network in the USA between 1954 and 2001, generated six dollars’ worth of economic activity. Therefore, Uganda's public investments are falling short of generating the desired economic return, mainly due to corruption.”

Deep rooted corruption 

Irrespective of the fact that Uganda ratified the UN Convention against Corruption and established a robust legal, institutional, policy, managerial framework to fight the vice, economic activists say they remain deeply concerned that the incidence and levels of corruption in Uganda have continued to escalate.
According to the IGG, the country loses approximately Shs10 trillion to corruption every year and the lost funds include money generated from loans. This, according to Ms Byiringiro has crippled a number of loan funded projects which do not perform satisfactorily. 
 
The CSOs are of the view that the existing laws and policies have not been fully implemented to aid productivity of debt resources. For example Article 159(3) of the Constitution of Uganda requires that terms and conditions of loans shall be presented before Parliament and shall not come into operation unless they have been approved by a resolution of the MPs. 

“Unfortunately, in some instances loans are acquired by government without the requisite Parliamentary approval with best example being the Lubowa Specialised Hospital,” the CSOs said in a joint statement. 

Further, the statement issued Sunday, indicates that Parliament has also not played its part in scrutinizing loan proposals and agreements thus giving way to loan contracts with bad terms like in the case of Entebbe airport upgrade project.

Analysis which Ministry of Finance agrees with indicates that poor performance of loans is as a result of poor or lack of proper planning prior to acquisition, implying that the government acquires loans first and then works backwards. 

Economic experts argue that there is also little or no consultation and involvement of project beneficiaries, restraining citizens from monitoring government projects. This has increased the level of misuse of resources and corruption. This is in addition to delayed procurements, paving way to delayed commencement of projects, completion, affecting much needed service delivery. 

Call to action…

It seems as if all boils down to the government to do the right thing. And for that, the CSOs would want to see the government strengthen its ability to generate evidence of corruption within and outside the country and prosecute the corrupt, given that the money lost to vice is taxpayers’. 
“We welcome the lifestyle audit campaign. We implore citizens to support the Inspectorate of Government, especially with information on public officers’ assets as one of the ways to check corruption in Uganda,” Mr Marlon Agaba, Head of Programs at Anti-Corruption Coalition Uganda, told journalists on Sunday.

The CSOs also slammed President Museveni for appearing to encourage corruption given his remarks during the commemoration of the Anti-Corruption Day at Kololo ceremonial grounds last week.

Speaking as the Chief Guest, Mr  Museveni cautioned against lifestyle audit which Ms Betti Kamya, the government watchdog, has been mooting since she was appointed the new Inspector General of Government (IGG) in July this year. And as for the Parliament, the message from the CSO is: “Perform your oversight role with utmost care, and scrutinise loan proposals before approval.”  By Ismail Musa Ladu, Daily Monitor