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The Permanent Secretary and Secretary to the Treasury, Ministry of Finance, Planning and Economic Development Ramathan Ggobi while appearing at NBS Morning Breeze today said the markets should not be excited that Government of Uganda is going to borrow Shs 7.8 trillion next FY 2024/25 to pay Bank of Uganda debt.
This money is part of the additional Shs 13.8 trillion that increased the appropriated budget for next FY 2024/25 from Shs 58 trillion to Shs 72 trillion. Ramathan Ggobi said Government of Uganda made the decision during the finalization of the budget to pay the debt and strengthen Bank of Uganda to maintain macroeconomic stability.
The PSST said Government of Uganda papers of different tenors mainly treasury bonds have been issued to Bank of Uganda & the Central Bank will keep them & only issue these papers when there is need to mop up excess liquidity in the market.
He said the commercial banks will give the money to Bank of Uganda in exchange for the papers & the Central bank will keep the money taken out of the market.
This debt has been accumulating over the years to fund the budget especially during the Covid-19 pandemic time when Gov’t could not easily mobilize the required revenue.