{UAH} UGANDA ' S RUINED ECONOMY

Debt crisis looming in Uganda: 

Bank of Uganda governor has come out and warned M7 government about the rapidly rising Uganda debt, that has risen from 6 billion dollars in 2015, to 15.1 billion dollars today. 

This increases Uganda's DEBT to GDP ratio to 58%, which is above the East African threshold of 50%.

 In the 2016/2017 financial year, Uganda revenue authority collected 12.88Trillion Shs, in taxes, which is about 3.57 billion dollars, at the exchange rate of one dollar=3600Shs. 

Compare this with Kenya that collects 14 billion $, and Tanzania which collects 9 billion $. in tax revenue. In the current financial year,                                            (UG only collects 3.7 billion $)

Uganda is spending 9.9Trillion Shs(2.75billion$), on debt servicing.

 

Imagine you collect 3.57 billion dollars per year, and spend 2.75 billion $ of tax revenue paying debts. That means 77% of tax revenue is spent on debt servicing

!  (MOST OF THESE DEBTS NEVER MADE IT TO UG, OR THE MONEY WAS CORRUPTLY STOLEN BY M7'S CRONIES)

That leaves very little money for developmental expenditure. No wonder government is now borrowing money to pay salaries!!. 

Uganda's 2017/2018 budget is 8 billion $, but government can only collect 3.57 billion$ in taxes. That means 4.43billion $ has to be borrowed from external and domestic sources. Although Kenya  is also struggling with high debt levels, it doesn't borrow to pay salaries. 

Kenya is able to  cover 100% of its recurrent expenditure from domestic taxes. It only borrows to cover developmental expenditure. 

Kenya's TAX to GDP ratio for the financial year 2016/2017 was 16.9%, having fallen from 19% a year earlier. Uganda's TAX to GDP ratio is 13.8% , and has been arround 13% for many years. This is below the 20% threshold set for East African countries. 

Kenya is spending 45% of tax revenue servicing debts: 6.5 billion $ servicing Kenya debts.   

 Uganda is spending 77% of tax revenue on debt servicing. 

Kenya was warned last week  by the IMF, to go slow on infrastructure debts, and work hard to increase its tax revenue by widening the tax base. Kenya is in a better position than Uganda, and is more efficient when it comes to service delivery and public investments. 

Uganda has a reckless incompetent regime that has mismanaged the economy by spending taxpayers money to build a  political patronage network and useless military adventures..

We now have 40,000 government job slots that are vacant because the government has no money to pay salaries of an extra 40,000 employees. 

This has severely compromised service delivery, especially  in the health sector, where thousands continue to die every year. They came with a plan to impoverish people that has now backfired. 

They want to collect more tax, but when they look back to see if there is a reasonable large middle class all over the country to collect tax from, they see none, they see millions in rural areas struggling to survive, and many speculators in Kampala, speculating with stolen money, importing expired sugar and fake vaccines..... tax free.

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