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Reply to Mwenda on Uganda’s debt

Defaulting on Debt

It is, therefore, obvious that a country, pursuing prudent policies aimed at macroeconomic stability and related development goals, can actually default on its domestic and/or foreign debt. Resorting to money printing or use of Y or K are, in practice, not available policy options since they are not only irrational but also imprudent, naive, myopic, and utopian.

I didn’t Intend to Demonstrate That Uganda’s Debt Is Unsustainable

Mwenda correctly states that I did “not bother to state the debt stock, its tax revenues …”.  As noted earlier, my objective was not “to demonstrate that Uganda’s debt is unsustainable”. Being a well-trained, professional and practising statistician and econometrician, if that had been my aim, I would have used my proven expertise and experience to present a superior analysis of issues than Mwenda does. Note that my first book (Chapter 6) and second one (Chapters 2, 4 and 5) contain analyses of some of these issues.

Irrelevancies in Mwenda’s Latest Article

As expected, there are additional irrelevancies in this article, including:

  1. Length of my article: Does length matter? What matters is the work’s contribution to knowledge plus the powers of argumentation and analysis.
  2. Theoretical abstractions about debt: As pointed out by Kitto, Mugabira and others, I used common sense and simple analyses to present my ideas; no theories on debt. Mwenda is maybe frightened by inequalities like I > (D+R+C), which are common sense statements, not theories—and, hence, he thinks they are theories!
  3. Copied notes … to show off: Does it matter whether I used lecture notes? What matters is the correctness and relevance of the narrative contents. Besides, I didn’t write the article so as to show off. Show off to who? Genuine economists and other people should follow this simple analysis; and, indeed, I continue to receive positive feedback from various people.
  4. Discontent with the Museveni Regime: As many readers know, I have published various works on, inter alia, education and economics issues in Uganda, not because I am discontented with President Museveni but because I believe in objective (scientific) analysis and telling the truth. If President Museveni or anybody else says something that I believe is not right, I will say it is wrong, whether or not I am (politically or otherwise) opposed to the person who said it. At a 2011 KIU graduation ceremony, Hajji Basajjabalaba made a correct statement that “Hyuha is a person who will say in your face that you’re wrong when you are wrong”. Mwenda:  that is me. In any case, is it President Museveni who stated that the debt is sustainable?

Most likely, Mwenda is very economical with the truth. However, I also believe that he uses arrogance and derogatory statements against dissenters to his views, employs superfluous political overtones, and tosses around unnecessary raw data, rates and ratios, other statistics, etc. to ward off or repel dissenters, and as a cover-up for apparent deficiencies in his stock of knowledge.

Concluding Remarks

In my article, I expressed my opinion that “Uganda definitely needs to worry a lot about her growing public debt”. This was and is the considered view of the writer. It is the resultant, common sense evidence deduced from the analysis. This is a hypothesis worth investigating econometrically or using other data analytical techniques.

Finally, it is gratifying to note that this hypothesis appears to tally with an IMF analysis (Press Release No. 19/148, May 7, 2019) that shows that due to ever-rising borrowing for infrastructure, Uganda’s debt/GDP ratio is to rise from 41% to 45.7%, 49.0% and 50.7% in financial years 2018/19 to 2021/22, respectively, thereby gradually increasing the risk of distress. Further, it should be worrisome to everybody that 20% of URA’s collections in 2019/20 will be consumed by just interest payments—more than what is planned to be spent on health or education.

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Mukwanason A. Hyuha is a Professor of Economics based at the Centre for Critical Thinking and Alternative Analysis

hyuhama@gmail.com

2 comments

  1. You will immediately get too usse cheats also.

  2. Wow!

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