Government plans to reduce total public debt to 50% with new charter

The Ministry of Finance, Planning and Economic Development (MoFPED) yesterday at Imperial Royale Hotel in Kampala launched its 2nd Charter for Fiscal Responsibility & Fiscal Rule for Oil Revenue Management.

The Charter, the ministry said, has three main objectives. These are: to ensure that ratio of total public debt to GDP in nominal terms is reduced to below 50% by FY 2025/26, overall fiscal balance including grants should gradually adjust to a deficit not exceeding 3.0% of non-oil GDP by FY 2025/26 and that a maximum of petroleum revenue worth 0.8% of the preceding year’s estimated non-oil GDP outturn shall be transferred from the petroleum fund to consolidated fund for budget operations.

The minister of state for planning, Amos Lugoloobi, while officiating at the launch said: “My ministry formulated this charter which considers government expenditure needs, debt sustainability maintenance and the flow of petroleum revenues into the economy,” he said.

Deputy Secretary to the Treasury, Patrick Ocailap while closing this engagement said the Charter anchors Government’s fiscal policy objectives aimed at maintaining fiscal sustainability by managing the deficit bias thus gradually reducing public debt.

He added that the Fiscal Rule for Oil revenue management will erode some of the false notions surrounding the use and ownership of Uganda’s oil resources.