The Auditor General has warned the government over acquiring non-concessional loans for items that do not attract returns.
While the government has its window for concessional loans closing in, state actors and economists argue the government ought to slash its expenditures by reducing its public expenditures.
But how did the government draw itself to borrowing more than 2.7tn to pay salaries?
In the Financial Year 2022/23, the government acquired non-concessional loans from lenders - including Stanbic Bank where it borrowed $545,450,180 and from Standard Chartered Bank $194,361,998.
In the same practice termed to be a budget indiscipline, the government borrowed 4.493bn.
These total to more than Shs2.7tn without calculation of interest levied. Interest on such loans range from 12 percent to 16 percent and sometimes more
To the surprise of many, these highly risky loans were procured for budget support informing of salaries, wages and other administrative expenditures.
Paul Omara, a senior banker and legislator, says the action of government will burden the economy the more.
"This puts us in a tough situation because it means we are too bulky to afford our salaries," says Omara.
"And if we borrow for salaries, we get limited on how much we can borrow for projects. These being non-concessional becomes more worrying because they come with high interest yet they are just consumptive."
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Senior economist Fred Muhumuza said the country is moving in a wrong trajectory.
"The citizens start feeling this when they see doctors but no medicines available in hospitals," Dr Muhumuza said.
Omara and Muhumuza explain that by the government drawing its self-closer to these highly risky loans its moving to a tough corner questioning why the government burdened as such continues to raise its budget ceiling.
But this has more implications for service.
"Why do we give false hopes. We keep increasing a budget ceiling yet we are borrowing to pay debts. This must stop."
According to the public debt management framework, governments non-compliance to the terms of borrowing exposes a government liquidity shortfall since they take a short time to mature but with high interests and contracting fees.
But how does the government carry itself out of the crocodile tongue?
"Let government downsize itself. Cut down cabinet, legislature. Stop recruitment and cutdown the agencies instead of creating tens overnight.
With government continuously collecting low revenues as its expenditure burden increases amidst huge borrowing, former commissioner for URA Dickson Kateshumbwa says this brings a financial risk of government drawing monies from other development areas to pay off debt of consumptive expenditure.
The Chairperson for the parliamentary Public Accounts Committee, Mr Muwanga Kivumbi, says government is likely to borrow more non-concessional loans for the closing window.
"This government is bankrupt. It will in fact borrow more non-concessional loans in this financial year 2024/25," Kivumbi sai
