Become a debt collector, young man, it’s where the money is in today’s Uganda

Saturday June 18 2016

 

By Joachim Buwembo

Graduate unemployment has become so acute that Ugandan parents still have to help out “children” who have attained Masters degrees and even PhDs, with food, transport, accommodation and clothes.

But the national budget that was presented last week gives a very clear picture of the priority sectors and this should guide people who are just going to college on what courses to take.

Without any close competition, the debt sector is now the most favoured by our national economic managers. The entire budget for 2016/17 financial year is worth Ush26 trillion ($7.6 billion) and a quarter of this at Ush6.4 trillion ($1.9 billion) has been allocated to payment of interest on debt.

Interest for servicing debt is the item that our economic planners have thus given 25 per cent of the budget. The $1.9billion that will be used to pay interest on government debt actually constitutes half of the whole year’s collection by the Uganda Revenue Authority.

So if you know any high school student in East Africa, tell them not to be like those Biblical fellows who have eyes but cannot see, who have ears but cannot hear.

The announcement could not have been any bolder – the debt industry is the most important and any forward looking student should select a course that can lead to specialising in debt management.

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If interest in a year can be $1.9billion, then what total debt stock does it represent? The entire nation will spend six months paying tax to finance this one important sector alone. 

Compare the importance accorded to debt servicing with say, agriculture. This so-called backbone of the economy has been allocated 3 per cent – just an eighth of what has been given to debt servicing. So you know where to direct your teenager if you want them to become successful.

Another sector we have been repeatedly told is going to be the driver of our development is information and communications technology. This one has been given 0.3 per cent of the budget, that is an eightieth of the sum allocated to debt servicing. It is a debt-driven economy and smart chaps know where to head.

We are also sufficiently excited about tourism, since Uganda has constant weather all year round, big game, the largest concentration of bird species on the planet, snow at the equator, the source of the world’s longest river, the largest number of man’s closest cousins, mountain gorillas, the oldest surviving tree species comparable to the extinct dinosaur, all these now supported by good security.

Now 0.65 per cent of the budget has been allocated to tourism, a mere fortieth of what has been allocated to debt servicing. Do you still need to be shown where to direct your teenager? Debt management is the thing.

And the vast debt stock we now boast of was not bequeathed to us by kind Mother Nature like minerals and climate.

We worked hard to accumulate it because several years ago, the country’s external debt was written off following efforts by meddling groups like Oxfam. But our smart finance managers ensured we built up the debt stock rapidly in the next few years to surpass even what was written off, and is now set to reduce graduate unemployment.

Joachim Buwembo is a social and political commentator based in Kampala. E-mail: [email protected]

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