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The State Minister for Finance, in charge of General Duties, Henry Musasizi has raised concerns over the country’s high fiscal deficit saying it’s worrying.
Parliament in May this year passed a budget, of 48.1 trillion shillings for the financial year 2022/23.
However, out of the total budget, only 25.55 trillion shillings will be pre-dominantly funded using domestic sources.
The rest of the budget, for instance, 4.97 trillion shillings will be funded through domestic borrowing, 2.61 trillion shillings using Budget Support, and 6.72 shillings through External Financing. Meanwhile, 8.01 trillion shillings will be funded through Domestic Debt Refinancing.
It’s against this background that Musasizi concludes that, the situation isn’t good news for the economy since the government is spending far more than its total income.
A fiscal deficit is a situation when the government's expenditure exceeds its revenue in a given year.