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No country can develop without acquiring debts – Prof. Augustus Nuwagaba

By Davis Mugabi

Veteran economist and an international consultant on economic transformation, Prof. Augustus Nuwagaba, has said that debt is not as bad as it is thought to be.

He was Tursday morning delivering a keynote address at the 3rd African Conference on Debt and Development focusing on prudent development financing options for Uganda through reimagining, reorganising, and remobilising the Global Financing Architecture, an event organised by Uganda Debt Network at Hotel Africana in Kampala.

In his address, he emphasized that debt is not as bad as it is thought to be.

“All of us have debts. What should be thought about when acquiring debt is why am I borrowing? From where? Do I have the capacity to pay it back?” he wondered.
According to Prof. Nuwagaba, “No country can develop without acquiring debts, the world over it is only Qatar without a debt.”

“Countries like the United States, the biggest economy in the world, have a debt of $ 30.9Trillion, which translates to 118.0 ratio to its GDP, China (286%), Japan (1987%), etc. So, this indicates that it’s not about debt acquisition but how efficiently and effectively borrowed funds are used to achieve the desired growth,” he added.

In terms of alternative financing opinions, he gave an example of the Renaissance Dam in Ethiopia which he says was constructed with about $4b, “funds that were mobilized through publicly listing and it generates 6000 MW.”

As a result, he says “at $6 cents, Ethiopia has the cheapest electricity in the World beating Canada and USA.”

“Why need to investigate these INNOVATIONS in our public investments?” Other options that I emphasized include local content development in debt modeling, technological skills transfer, seeking loans from non-traditional sources, and the use of social security facilities.”

Prof. Nuwagaba says that “growth is IGNITED from within, but can only be PROPELLED FROM outside; As the RUKIGA- RUNYANKOLE adage asserts; “water that is begged cannot be enough to wash someone’s hands clean”.

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