At a High-Level Dialogue on the Budget at Serena, Kampala; veteran economist, Prof. Augustus Nuwagaba addressed the issue of debt which he described as the “the elephant in the room.”

However, he emphasized on three areas:

“Three questions must be answered where debt sustainability is concerned: 1. Why do you borrow? 2. Where do you borrow from? 3. Do you have the capacity to pay back? It is inevitable that not only the Government but all of us occasionally borrow. However, there is a need for innovative ways of borrowing. All Governments acquire debts but manage the fiscal deficit that needs careful consideration,” Prof. Nuwagaba, an international consultant on economic transformation said.

On the second element, Prof. Nuwagaba said that there is a need to seek alternative financing means.

“Ethiopia’s Renaissance Dam was constructed using Domestically mobilised resources from citizens through listing the Dam on Stock Exchange and shareholding. As a result of cheap capital, Ethiopia constructed this 6000 MW dam which supplies one of the cheapest electricity tariffs in the World. It is this factor that has attracted FDI in the likes of Dangote Cement,” he said.

He added: “Investing in people is the key to unlocking any country’s transformation. The gov’t has invested 18% of the FY23/24 budget in Human Capital Development, which is commendable.”

However, he said: the education system needs to be radicalised to ensure that graduates at whatever level have adequate skills to enable them to engage in productive economic activities.

“We need to invest but focus on the content that will inculcate human capabilities that enhance productivity and accelerate productivity. An example is China where there is a duo-qualification framework that has greatly enhanced employment and created the premise for attracting Foreign Direct Investment,” Prof. Nuwagaba noted.