By Thembo Kahungu
Central Bank Governor, Emmanuel Tumusiime Mutebile has raised the red flag about the growing government indebtedness, warning that the decline in tax revenues due to Covid-19 may cause more distress.
Mutebile was earlier today appearing before the Parliamentary Committee on National Economy to make a presentation on the effects of Covid-19 on the economy.
In his presentation, Mutebile said that while Uganda remains at a low risk of debt distress, there are evident significant vulnerabilities.
Mutebile who says that such levels of indebtedness is an early indication for fiscal risk that could lead to high levels of debt distress, warns that payment of interests will drain resources that should have been spent on other services.
Uganda’s debt amounts to about Shs54 trillion at 44 percent of the debt to GDP ratio.
MPs who attended the meeting chaired by Laurence Bategeka (Hoima Municipality), have accused the Central Bank of not advising government against continuous borrowing even when the different sectors of the economy have been hard hit by Covid-19.