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Just as it is soon a new Financial Year and also another budget. This time its for the FY 2019/20, the last one before campaigning. Therefore, the added strain on the economy will come, as the state funds are used for campaigns for the ruling regime. This is a steady act of the National Resistance Movement (NRM) and President Yoweri Kaguta Museveni. We can expect more of it. That is the reason why the lack of fiscal responsibility is evident. As the state is within a year going from spending 32 trillion shilling into 40 trillion shillings. This without substantial rate or even more revenue to cover the added expenses. That means the state is more addicted to loans and grants.
Surely, the people should be aware, as the state has already gotten more loans and has to pay more in interests than before. With the new infrastructure loans and other development projects will hit the costs in future budgets. Even with Petro-Dollar, the state still has a lot of old debt to get revenue to cover. Especially, in the short-term window, as the grace periods of old loans will hit the budgets too. It seems like the state is only considering the debt-rate, but not the actual cost of the loans in itself.
That is why I will take one quote from the IMF, before showing what reports there was from Parliament, As they have voted for a new budget, which has escalating spending further without the revenue. That should be a worry. Take a look!
IMF May 2019:
“Rising debt puts more strain on the budget as more resources need to be allocated for interest payments. One shilling paid for debt service is one shilling less going to a school or a health clinic. The current ratio of interest payments to revenue is comparable to what countries with high risk or in debt distress typically face” (IMF – ‘Uganda’s Economic Outlook in Six Charts’ 09.05.2019).
Rising debt:
“The Committee noted that , the total public debt stock increased by 12.5 percent to USD 11.52 billion as at end December 2018 from USD 10.24 billion as at end December, 2Ol7 out of which domestic and external debt accounted for 33.5 percent (USD 3.86 billion) and 66.5 percent (USD 7.66 billion) respectively. The external debt stock increased by USD 0.78 billion to USD 7.66 billion by end December 2018 from USD 6.88 billion at end December 2017. The increase was mainly from China (25 percent) and World Bank (40 percent)” (REPORT OF THE BUDGET COMMITTEE ON THE ANNUAL BUDGET ESTIMATES FOR FY 2O19/20, P: 7, 2019).
Minority report on growing debt:
“Worrying to note is the fact that huge portion of the budget resource is to be financed through borrowing. Out of the projected by domestic revenue of UGX 20.59 trillion (51%) while the budget of UGX 40.48 trillion, 9.44 trillion (48%) will be sourced from both domestic or external borrowing” (…) “It should be noted with concern that projected are almost debt expenditures in FY2019/20 equal to tax revenue (URA tax collection) of UGX 20.59 trillion” (A MINORITY REPORT ON ANNUAL BUDGET ESTIMATES TY 2019/20, P: 4-5, 2019).
It should be worrying how easily this budget was passed. How between last FY 2018/19 to FY 2019/20 the state could add 8 trillion shillings on the budgets. This without counting or even having the added revenue needed. This meaning the state has a giant deficit, which is about half of the budget. Where they have to get funding from outside sources, either by loans or grants. Lots will be loaned for and has to be paid for later with interests.
Certainly, this is a way of ensuring that for every shilling paid in loans, the state could have delivered state services to the public. That is even something the IMF was pointing out. This should be a worry for Ugandans, as the state is misusing the funds, loaning and borrowing on their future, without certainty of being able to repay these loans. That is what is shocking as the oil revenue has been postponed again and the lack of progression on the matter. This means the state is not hitting its targets, while taking up more loans on future revenue. Anyone should be worried about this, because who knows tomorrow and what if the economy totally tanks before the industry takes off. They are clearly living large on Deficits Financing and hoping the golden goose soon lays eggs. Since, they are continuing to fund their operations and the state with loans.
Than, the oil will be sold wholesale, as the state cannot manage to gain revenue and has to trade off everything. The risks it is taking is reckless. The spending is bonkers. That the state is initially a year before an Election Year is creating this huge deficit. Isn’t a sign of strength, but of weakness. As well, as having a blind faith, hoping for a narrow escape in the realm of Deficit financing. Peace.




“Kenya has accepted offers of Sh210 billion in a third Eurobond it has named the “Kachumbari bond”, which will be used to repay other loans and fund unspecified infrastructure projects” (Daily Nation, 18.05.2019).
There are already been several of warnings on the rising levels of debt under President Uhuru Kenyatta and Deputy President William Ruto. The Jubilee has raised levels to unbearable levels and certainly, this will hit the economy at one point. As the grace-periods and the repayment levels will eat huge parts of the budgets. This is because of the reckless spending, the grandeur of grand corruption and whatever else the state has spent their ill-gotten funds at.
Because, this isn’t funny, this is spoiling the future and destroying the trust of the financial institution, the value of the currency and also the financial markets. This is all done because of an political elite has found a way of eating, which will in the end cost the state more in the long run. It is a quick fix to take up a loan, but the loans has to be repaid and usually with interest. That means it will not only cost the initial loans, but also the added interests. Plus it will be more damaging if the state cannot pay for it and have to default on the loans. Than it might loose its collateral and has to give away valuable assets, licenses of extractions and others just to barley get by.
This will be legacy of Kenyatta and his Jubilee Party. As they pre-occupied with one scandal after another. As the State is busy scheming finding new ways to eat, instead of finding ways to serve the public. The elite is so hectic about it, it needs to rehash old tricks to fund themselves.
When you have to take up loans for unspecified infrastructure projects, you know its not really that serious. You are just gambling on debt, raising debt and creating an evil cycle of debt management, which in the end will make the state poorer and poorer. As you have to raise more and more funds to have capacity to serve the old loans, while taking up new to cover for the old ones. In the end giving an alcoholic one more beer on credit and not expecting him to want another one after his finished with the first one. That makes you a fool, not cool and aloof.
There isn’t anything good coming out of this, unless you buy yourself land, house and even pay off old creditors, but why care right? Because, you have to down the line find new creditors to keep up with the newly created debt. You might cover for the old debt, but at one point you have to pay for this one too. Its a cycle of slow-destruction, instead of gaining revenue in a natural order. This is just bloating the financial markets, creating a giant bubble, which at one point will burst.
Than, you have a headache you cannot handle. This should be known by the Presidency and the Cabinet itself. This should be basic knowledge, but seemingly they are to happy to eat. That they are filling their pockets and ensuring their wealth is created. While the public in desperation should wonder, why could their representatives misuse their trust, misuse their power and their ability?
Why? Could the state take up three rounds of massive loans, which has nothing to show for. Other than more debt and becoming trapped in cycle, where you only loose and never win. Peace.


“Ugandan taxpayers to spend Shs 197.8m annually on social media tax and data bundles for Members of Parliament. Parliament will provide at least 5GB monthly data bundles at Shs 30,000 and Shs 6,000 monthly Over the Top (OTT) tax for the 458 legislators” (Kampala Dispatch, 16.05.2019).
Well, so there we have it. Yesterday is yet another party in the 10th Parliament of Uganda. Where the Members of Parliament indulges themselves with funds on the taxpayers dime. Instead of serving the public with working services, they are more afraid of their own pocket, in the limited time they are in office and in the capacity of MP. Therefore, they have to ensure, that all things are covered for the bottomless years in Parliament.
The MPs are already tax-exemption for their salaries, so that the pay they are getting for being in office is already non-taxed. With this in mind, they are earning about $8,715 monthly, this without the various allowances.
The MPs have a Free State funeral all covered by the state. They have free suits and tailor-made clothes. They have eating allowances, town-allowances, consolidation fee, committee sitting fees, housing sitting fees, town running allowances, free lunch, social security, and so on. The ways of eating, as an MP is boundless, a boundless empty pit.
These 458 MPs just have to eat like there is no tomorrow. They are planning to get fat. These people are now mushrooming all sort of expenses and putting it on the state. I am sure by next year, the significant others expenses are covered by the state, the side dishes and the remittance to relatives is paid in full. Because, there are endless roads for these people to get the state to fill the blanks.
This will be their legacy, that they were eating on an empty plate, a state which by all means take up loans to build and run the Republic. If not await donors to be able to pledge for basics of the state, in that one, the MPs are preoccupied with their own earnings than actually serving the public. Certainly, the financial system isn’t that great, but they are becoming a huge burden on state, by definition and by their own making, as they are piling on demands, which the state has to comply with.
That is why they are the Patrons of Greed. The ones who has no other way to sustain themselves, than eating the meat of the dying carcass, that as what these people does, while in power. No bounds, no stop and no plans to settle for less. Only to get more and more without any considerations of the implications. That is what the Parliament and the MPs are doing. Peace.