The finance ministry permanent secretary, Ramathan Ggoobi has maintained that Uganda’s rising debt is sustainable and remains below those in peer countries, including Rwanda and Kenya, whose debt to GDP ratios are beyond 60%.
Uganda’s public debt has since increased by 48.4% hitting Shs86.6 trillion as of June 2022.
Officiating at the inaugural debt and development dialogue held in Kampala, Ggoobi expressed optimism that public debt is on a declining trend assisted by robust economic growth, enhanced tax revenue mobilization, and increased caution on the expenditure side.
“On the tax revenue front, we are currently implementing our flagship Domestic Revenue Mobilization Strategy, which aims at increasing the tax-to-GDP ratio by 0.5 percentage points every year. The main thrust of this DRMS is to improve efficiency in collection of existing taxes, rather than the introduction of new ones” Ggoobi said.
He adds that in the medium term, economic growth will be driven primarily by activities in the oil and gas sector where they expect GDP growth to increase to over 7% at the start of commercial oil production.
Uganda expects to start oil production in 2025.
The dialogue has been running under the theme, “Debt and Development: How Sustainable is the Public Debt for Uganda?”.