SEATINI Uganda has warned that Uganda's rising public debt is creating a 'double burden' for citizens, with taxpayers facing higher contributions to service debt while also shouldering greater costs for healthcare and education. Herbert Kafeero, the institute's Deputy Executive Director, emphasized that government debt is ultimately funded by public revenues, meaning the financial pressure falls on ordinary Ugandans. 'We should not talk about borrowing as if it’s the government that pays. The money comes from us as taxpayers,' Kafeero stated, highlighting how debt servicing competes with funding for critical social services like roads, healthcare, and education.
Kafeero described the situation as a 'double burden,' where citizens pay taxes to generate revenue for debt repayment while also facing rising out-of-pocket expenses due to underfunded public services. He explained that when the government allocates resources to debt servicing, it reduces the funds available for essential infrastructure and social programs. 'The tragedy is paying taxes to generate sufficient tax revenue to service the debts, while simultaneously facing the burden of increasing out-of-pocket spending because the government is not able to meet social services,' he said. This dynamic, he argued, exacerbates economic strain on households already grappling with inflation and limited public investment.
The economist cautioned that the issue is not whether Uganda should borrow but how borrowed funds are utilized. 'Borrowing is not bad per se, but when do you borrow? For what do you borrow? And how ready are you to use the borrowed money?' Kafeero questioned. He called for improved public investment management, stronger parliamentary oversight, and greater transparency in debt utilization. Additionally, he urged the government to address revenue leakages, combat corruption, and broaden the tax base to reduce the disproportionate burden on existing taxpayers. 'The goal should be to ensure borrowed funds are directed toward projects that generate economic returns,' he said.
The warnings come amid growing public concern over the sustainability of Uganda's debt trajectory. SEATINI's analysis underscores the need for policy reforms to balance fiscal responsibility with equitable service delivery. Kafeero's remarks highlight a broader debate about the role of debt in national development and the urgent need for accountability in how public resources are managed. As the government faces pressure to prioritize both debt management and social welfare, the call for transparency and strategic investment remains central to addressing the crisis.