Optimist+Museveni+Ignores+Growing+Debt+Concerns Despite mounting concerns over Uganda’s escalating debt levels, President Yoweri Museveni remains an unyielding optimist. The country’s external debt has surpassed $20 billion, raising alarms among economists and international creditors. However, Museveni dismisses these concerns, claiming that Uganda’s debt is sustainable and will not hinder economic growth. He argues that the government is investing in infrastructure and productive sectors that will generate sufficient revenues to service the debt. Critics, however, point to the country’s poor track record in managing its debt. Uganda has previously fallen into debt distress, requiring international bailouts. They argue that Museveni’s continued borrowing spree is putting the country at risk of another unsustainable debt crisis. According to the International Monetary Fund (IMF), Uganda’s public debt-to-GDP ratio has now reached 55%, above the recommended threshold of 50%. The IMF has warned that continued borrowing could lead to a sharp increase in interest payments, crowding out private investment and slowing economic growth. The IMF also expressed concerns about the composition of Uganda’s debt, with a large proportion coming from commercial loans with high interest rates. This increases the government’s vulnerability to exchange rate fluctuations and raises the risk of default. Despite these warnings, Museveni has continued to borrow heavily, financing ambitious infrastructure projects and expanding social programs. His critics accuse him of prioritizing short-term political gains over long-term economic stability. The government’s optimism has failed to convince international creditors. The World Bank has placed Uganda on high risk of debt distress and has reduced its lending to the country. Other lenders are also becoming increasingly cautious, aware of the risks involved. The growing debt concerns are casting a shadow over Uganda’s economic outlook. Investors are becoming wary, and economic growth is likely to slow as the government prioritizes debt repayment over other investments. The country is facing a difficult path ahead, and the consequences of Museveni’s continued borrowing spree could be severe.Uganda’s public debt is approaching the Sh100 trillion mark, raising concerns about its sustainability. President Yoweri Museveni has emphasized the need for fiscal discipline, stating that he believes in “cutting our coat according to our fabric.”Uganda’s public debt is approaching the Sh100 trillion mark, raising concerns about its sustainability. President Yoweri Museveni has emphasized the need for fiscal discipline, stating that he believes in “cutting our coat according to our fabric.” According to the Auditor General, Uganda’s debt stood at Sh97.4 trillion in December 2023, with the International Monetary Fund forecasting it to reach approximately Sh110.6 trillion by the end of the 2024/2025 fiscal year. While some experts warn of the potential risks, others find solace in the fact that the debt-to-GDP ratio is still below the threshold envisioned by the Fiscal Responsibility Charter. Finance Minister Matia Kasaija has projected the debt-to-GDP ratio to finish at 47.9% by the end of the current fiscal year. President Museveni has expressed confidence in Uganda’s ability to manage its debt, suggesting that the country could have already entered a middle-income status if measured by purchasing power parity. He has also emphasized the importance of commercial farming and the agricultural sector in creating jobs. The government plans to continue supporting the Uganda Development Bank, the Parish Development Model programme, and the Small Business Recovery Fund to provide capital for wealth creation. Commercialization of agriculture is seen as a major source of employment, with the potential to create jobs for seven million Ugandans. Industrialization efforts are also being pursued, primarily through the private sector, with the government playing a risk-reduction role. The President has pledged to provide affordable long-term capital to reduce interest rates and encourage value addition. Other sectors identified for job creation include ICT, infrastructure, and the transportation sector. The rehabilitation of the meter-gauge railway and the commencement of the standard-gauge railway are expected to support the movement of goods and exports. Uganda’s economy is projected to return to its stable growth potential of 6.4-7% in the next financial year and double digits in the next five years. Oil extraction is expected to further accelerate growth and free the government from borrowing for infrastructure development. Despite a projected revenue shortfall of over Sh1.9 trillion for the 2023/2024 fiscal year, President Museveni remains optimistic, considering oil revenues as a reserve position to support key budget items.The International Monetary Fund (IMF) has warned that Uganda’s rapidly growing debt levels pose a “significant risk” to the country’s economic stability. In its latest report on Uganda, the IMF said that the country’s debt-to-GDP ratio had risen to 48.3% in 2020, up from 34.9% in 2016. The report also noted that Uganda’s external debt had increased to $14.6 billion in 2020, up from $9.8 billion in 2016. The IMF warned that Uganda’s debt levels were “unsustainable” and that the country needed to take steps to reduce its borrowing. The report recommended that Uganda increase its tax revenue, reduce its budget deficit, and improve its debt management. The IMF’s concerns echo those of other international organizations. The World Bank has also warned that Uganda’s debt levels are “a major concern.” The Bank said that Uganda’s debt-to-GDP ratio was “high and rising” and that the country was at risk of “debt distress.” The Ugandan government has dismissed the IMF’s concerns. Finance Minister Matia Kasaija said that the country’s debt levels were “manageable” and that the government was committed to reducing its borrowing. Kasaija said that the government was “optimistic” about the future of the Ugandan economy and that it was confident that it could meet its debt obligations. However, economists have warned that Uganda’s optimism is misplaced. They say that the country’s debt levels are unsustainable and that it is only a matter of time before Uganda defaults on its loans. The economists say that the government needs to take urgent action to reduce its debt levels and avoid a financial crisis.