How oil revenue will relieve gov’t of external debt

According to the Ministry of Finance, Planning and Economic Development Uganda’s debt burden stands at Shs93.38 trillion as of December 2023.

President Yoweri Museveni has stated that the country will earn US$2 billion per annum once oil production starts in 2025.

Museveni said that this revenue will be devoted to infrastructure and science development.

President Museveni said investing US$2 billion in the two sectors will significantly relieve government of external borrowing and external debt.

Museveni made these assurances after the Minister of Finance; Hon. Matia Kasaija delivered the 2024/2025 budget to the House at a sitting chaired by Speaker Anita Among at Kololo Independence Grounds on Thursday, 13 June 2024.

According to the Ministry of Finance, Planning and Economic Development Uganda’s debt burden stands at Shs93.38 trillion as of December 2023. Out of this, Shs55.37 was external debt which the President said should cease.

“If the NRM will be in charge, we shall use the oil money for strategic items such as infrastructure and science development; this business of borrowing should stop,” Museveni emphasised.

Museveni said that government will invest the revenues from oil in infrastructure such as the Standard Gauge Railway which will enhance Uganda’s potential to create wealth and reduce borrowing.

In the 2024/2025 financial year, government has allocated over Shs920 billion for the oil and gas sector to realise the ‘first oil’.

Kasaija said this is possible with the progress made in the construction of East African Crude Oil pipeline (EACOP) project where 500km of pipeline have been delivered in Tanzania.

Kasaija added that in the new financial year, government will focus on developing an EACOP hub in Tanga and continuous construction of the pipeline.

In addition to the oil sector, tourism, mechanised agriculture and minerals development were highlighted as key drivers to catapult the size of the economy to US$500 billion in the next one and a half decades.

“We are lucky we have the rains but sometimes we get less rains and get into food crisis. We must have complementary agricultural arrangements, such that when rains do not come, there is a standby irrigation system,” the President said.

Speaker Among on her part urged members to avoid any inducements and called on accounting officers to report cases of extortion.

“We have urged accounting officers to share with the leadership of the legislature any incidences of influence peddling. However, we have not received any such information. We urge accounting officers to maintain open channels of communication with the leadership of the legislature in pursuit of greater transparency and accountability,” Among said.

She called on legislators to walk in accordance with the code of conduct prescribed for them and uphold integrity of the rule of law.

 

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