The Forum for Democratic Change (FDC) party has challenged the government’s decision to borrow from domestic commercial banks to finance the recently approved national budget for the 2024/25 financial year.

According to Robert Centenary, the FDC Vice Chairperson, who was addressing a press conference at Najjanankumbi on May 27, 2024, the government’s borrowing from domestic banks will affect the local businessmen, which will lead to inadequate funds that will result in the collapse of several businesses, hence unemployment.

“Knowing that the government has issues with foreign lenders, it has resorted to domestic borrowing, which will edge out the local businessmen who are competing with it. With the tax burden, many struggling businesses are going to compete with the government to get loans from commercial banks, which will lead to their closure, and the rate of unemployment is also going to increase,” Centenary said.

Centenary criticized the government’s decision to increase fuel taxes, which he said is suicidal since fuel is the facilitator of businesses in Uganda. He noted that the increase in taxes in Uganda has increased inflation, thus destabilizing the economy.

The FDC party vice chairperson was concerned about the 2024/25 budget, which he said has allocated a significant portion of resources to non-priority areas that may not align with the needs and concerns of the average Ugandan.

“If you look at the amount of money that is going toward domestic and foreign debt, you will be astonished. As I speak today, Uganda is indebted to 19 financial lending institutions with different amounts of money to the tune of UGX 97 trillion. Knowing that the government has issues with foreign lenders, they have resorted to domestic borrowing, which will edge out the local businessmen who are competing with the government,” he said.

He also tasked the Members of Parliament to put emphasis on the oversight role, strengthen the role of parliament in reviewing and approving the supplementary budgets, promote physical discipline, and encourage responsible spending habits and adherence to the original budget.

Centenary asked the government to stop spending on non-productive sectors if its goal is to achieve middle-income status.

“Enhance the accuracy and reliability of budget projects to minimize the need for supplementary budgets. Parliament should enhance transparency and accountability and ensure that supplementary budgets are justified and subject to vigorous scrutiny as stipulated in the Public Finance Management Act,” he noted.

Many political parties and economists are concerned about the 2024/2025 budget because the government has presented a UGX 72.1 trillion budget for the upcoming fiscal year, which represents a significant increase from the previous year’s budget of UGX 52.7 trillion.