Finance Minister Henry Musasizi has defended Government’s new Charter for Fiscal Responsibility, insisting it will enforce discipline in borrowing, spending and use of oil money over the next five years.Musasizi appeared before Parliament’s Budget Committee on Tuesday to respond to queries on the Charter for FY2026/27 to FY2030/31, which sets hard fiscal rules to guide the budget.At the centre of the debate was why the Ministry of Finance projects public debt at 54.7% of non-oil GDP for FY2026/27, while the Bank of Uganda puts it at 57.7%.Musasizi said the difference is being harmonised, noting that the Ministry remains the mandated authority for debt reporting through the annual Debt Sustainability Analysis (DSA) done jointly with Bank of Uganda and UBOS after final GDP figures are released.“One reason could be that they included the stock of domestic arrears, which we do not include in the DSA in line with international practice,” Musasizi told MPs.He clarified that public debt covers central government only, with external debt measured at nominal value and domestic debt at cost. Domestic arrears and temporary BoU advances are excluded from debt under international definition, but their risks are captured in the annual Fiscal Risk Statement.Under the new Charter, public debt is projected to peak at 55.1% in FY2027/28 before dropping to 50% by FY2030/31.On Oil MoneyOn petroleum revenues, Musasizi said the Charter does not replace the Public Finance Management Act but sets a cap on how much oil money can be spent annually.He said transfers from the Petroleum Fund to the Consolidated Fund cannot exceed 0.8% of the previous year’s non-oil GDP outturn from UBOS, with the balance saved in the Petroleum Revenue Investment Reserve.Deficit to Drop to 1.5%The Charter targets cutting the fiscal deficit excluding oil from 6.6% of non-oil GDP in FY2026/27 to 1.5% by FY2030/31.Musasizi said consolidation is backloaded because revenue gains from the Domestic Revenue Mobilisation Strategy will build over time, while first-oil related spending is heavy in the early years.If revenue assumptions fail, he said Government will cut non-priority recurrent spending and reprioritise projects rather than borrow more.The Charter also seeks to cut commercial borrowing as a share of domestic non-oil revenue from 33.7% to 19.3%, and interest payments from 32.5% to 20% over the period.Musasizi said performance against the Charter will be reported to Parliament through the Half-year Fiscal Performance Report by end of February and the Annual Report by end of October each year.The post Musasizi Defends New Fiscal Charter, Explains Why Govt Debt Figures Differ from BoU’s appeared first on Business Focus.