Uganda’s public debt hits Shs48.91 trillion

The stock of Uganda’s total public debt grew from $12.55 billion (Shs46.36 trillion) at end June 2019 to $13.33 billion by end December 2019, which is equivalent to Shs48.91 trillion, due to increased borrowing by the government in the recent past.

The Ministry of Finance, Planning and Economic Development says of this, external debt was $ 8.59 billion, which translates into Shs31.53 trillion), while domestic debt was $ 4.73 billion, which is about Shs17.38 trillion.

Addressing a news conference at Uganda Media Centre today, ahead of the three -day regional debt conference on public debt management and sustainable economic growth in sub-Saharan Africa 26-28th February 2020, state minister of finance general duties Dr Ajedra Gabriel Gadison Aridru said this represents an increase in nominal debt to GDP from 36.1 per cent in June 2019 to36.97 per cent in December 2019.

“Measured in present value terms, the total stock of debt as at end December 2019 amounted to 28.54 per cent of GDP up from 27.3 per cent as at end June 2019,” he said.

Dr Ajedra said based on the recent Debt Sustainability Analysis (DSA) report 2019, the nominal total public debt is projected to increase to 40.9 per cent of GDP in FY2019/20, before peaking at 49.5 per cent in FY2023/24.

He explained that in present value terms, total public debt will follow a similar trend, increasing to 31.1 per cent of GDP in FY2019/20. Uganda continues to be at low risk of debt distress, with public debt found to be sustainable over the medium to long term.

Giving the government position on borrowing externally and domestically, Dr Ajedra said Government will continue borrowing cautiously with priority being given to those projects that are growth drivers and are identified in the National Development Plan strategic direction as key/flagship projects.

This the conference is a unique opportunity to bring together senior government officials from across Sub-Saharan Africa and a wide range of experts and stakeholders, including bilateral and multilateral creditors; representatives from civil society organizations; academia; think tanks and private sector actors.

The aim of the conference is to explore ways to elucidate on the complexities facing sovereign borrowers in Sub-Saharan Africa.

Dr Ajedra said it will also focus on best practices and new strategies for getting the best deal for financing national development plans, including the sustainable development goals.

“As you know, over and above our revenue collection, debt financing is a vital source for funding our national budget specifically committing this financing to development of key infrastructure projects and for the provision of social services,” he said. 

Adding: “However, there has been major changes in the composition of external public debt over the past decade, which has given sovereign borrowers more choices but has as well-made prudent debt management more challenging.”

Over the last few years, Uganda government increased external borrowing on a non-concessional basis, which expensive as opposed to the concessional loans, which relatively cheaper.

Dr Ajedra said the shift from concessional loans provided by bilateral and multilateral agencies towards market-based loans to private lenders and less concessional loans from bilateral official creditors have led to more expensive and riskier debt portfolios in several countries.

“We intend to share our experience on how; we have managed to ensure this sustainable stance with our regional partners,” he said.

The three-day conference is scheduled to take place on 26-28 February 2020, at Speke Resort Munyonyo and is targeting most of the Sub-Saharan African Countries to have discussions on sustainable public debt management and strengthened economic growth.

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