A report by civil society has revealed that government owes the public 4.5 trillion shillings accumulated from continued domestic borrowing within the last three years.

BOU Deputy Governor Dr-Louis-Kasekende (right) and his boss Emmanuel Mutebile

Research conducted between 2002/2003 and 2011/2012 by Uganda Debt Network shows that government borrowing from the public through commercial bank increased citing examples of 514.7 billion shillings in 2011/2012 up from 348.1 billion shillings in 2010/2011.

The factors leading to continuous accumulation of domestic arrears include, failure by government to stick within the programmed budget, under budgeting for fixed expenses, diversion of resources to non-budget expenditures among others.

However Bank of Uganda dismisses the report saying that stringent policies have been implemented by the Central Bank to control government borrowing.

Speaking at the launch of the report, the Deputy Governor Bank of Uganda Louis Kasekende said that there some economic reasons that justify government borrowing like public welfare as he explains