Finance minister Matia Kasaija has refuted reports that government is planning to borrow over Shs700 billion shillings to pay public servants’ salaries.
Addressing reporters at the Uganda Media Centre, Mr. Kasaija clarified that he submitted a proposal to Parliament, seeking for authority from the House to borrow additional Shs736 billion from the domestic financial market to finance the budget for FY 2017/18, of which Shs48 billion will go towards meeting shortfalls in civil servants salaries and wages.
“This money ( is to) meet the financing obligations of on-going infrastructure projects whose certificates will fall due this financial year as well as other statutory obligations such as wages,” Mr. Kasaija said.
Further, according to the minister, the borrowing is to mitigate the revenue shortfalls recorded at Shs324 billion in VAT, trade and excise taxes.
He also noted that borrowing will not have any significant impact on the private sector given that liquidity in the market currently amounts to two trillion shillings.
Last year government employees from different sectors including health and judiciary went on strike, demanding for salary enhancement and the improvement of their welfare and working conditions.
In response the government this year committed itself to addressing their concerns.