Uganda's debt, Let's trade carefullyThe media has been awash with issues of Uganda's debt (e.g. New Vision 10th October, 2013 and Red Pepper 5th October). Uganda Debt Network (UDN) is simply re-engineering the debt debate, in view of policy and poverty reduction prospective by Government. We applaud some Members of Parliament (MPs) we have closely worked with to bring issues of debt acquisition and management to the fore, for public knowledge and parliamentary oversight. We together need to see how we obtain policy options relevant to ameliorating Uganda's debt situation.

In the case of one Rwakakamba, let's tell the truth, including about national debt. The impression, for instance that "Uganda will borrow $2 billion to build the 600-megawatts Karuma....." is false. The said funds, by the Chinese Government, through CWE company, will go to two hydro-power projects at Isimba and Karuma (both already commissioned by H.E. Museveni); and the Isimba-Bujagali transmission line. Uganda is expected to co-fund 15% of the total funds. Meanwhile, Isimba will attract 100% funding based on concessional rates and Karuma with about 45% debt on commercial lending rates. That "Uganda Government is not borrowing money to import luxuries and consumables like perfumes, artificial buttocks........." is known.

 External borrowing appetite needs tamingWhile Uganda's Debt Sustainability Analysis (MoFPED, Oct 2012) indicated that the country is not suffering any debt stress, Government has since signed commitments of an additional US$2.8bn (about Shs 7trillion) of external public debt, equivalent to 13.2% of GDP according to the Governor Bank of Uganda in the New vision dated Monday October 7th 2013, pg 28 .

In March 2013, external debt stood at US$5.8bn up from US$5.7bn by March 2012. This borrowing appetite increases by the day which is worrying. We need to make a forward step in reducing dependence on borrowing since it is not the only alternative for economic growth, transformation and development.

In 1996, Uganda Debt Network was formed to campaign for Uganda's debt relief under the Heavily Indebted Poor Countries (HIPC) Initiatives of the World Bank and the International Monetary Fund.

As a result, debt stressed Uganda was the first country to qualify for debt relief from the multilateral organizations under the original HIPC Initiative in 1998 (estimated at US$650 million in nominal terms) and the Enhanced HIPC Initiative in 2000 (approximately US$1300 million), a total of US$ 1950 million.

Although the International Agency Fitch records a B+ credit rating for Uganda signifying a low cost of borrowing with decreasing risk of default, the loan amortization has registered negative performance (i.e. making insufficient loan payments on both interest and principle of loan) for several years now.

Public needs timely info, gov’t told Government has been tasked to provide timely information to the public to keep the people abreast of new developments in the country.

"This will make the citizens to be aware of government's programs and hold the leaders accountable," Julius Mukunda, a coordinator of Civil Society Budget Advocacy Group said on Sunday.

He was briefing reporters during the celebrations to mark International Right to Know Day celebrations at Uganda Debt Network headquarters in Kampala.

Mukunda blamed government for sometimes hiding information or coming out too late to disseminate information to the masses and yet the 1995 Constitution guarantees citizens to the right to access of information from government and its agencies.

"Access to information is a fundamental right that is operationalized by Access to Information Act 2005," Patrick Tumwebaze, the executive director of Uganda Debt Network said.

"Even when the government produces the in-year reports on a monthly basis, public dissemination is only done after six months. This complicates public efforts to hold the central and local governments accountable since reports are made available long after the implementation periods," he stated.

Tumwebaze however, hailed government for improving the level of budget transparency.