Payments on external debt increase by Shs864b in just one year  

Fees payments for external public debt increase due to an increase in disbursements. Photo / File  

What you need to know:

  • Payments for external debt servicing increased from $583.9m (Shs2.17 trillion) to $816.3m (Shs3 trillion) 

Finance Ministry has said there has been a significant increase in the amount of money spent on external debt servicing for the period ended June 2023. 

In details contained in the June debt statistical bulletin and public debt portfolio analysis, the Ministry of Finance indicated that payments for external debt servicing increased from $583.9m (Shs2.17 trillion) in the 2021/22 financial year to $816.3m (Shs3 trillion) in the 2022/23 fiscal year, representing a growth of $232.4m (Shs864.2b) . 

The increase, the analysis noted, was on account of a rise in principal, interest payments and fees for major projects, among which included Karuma and Nsimbe dams, Kabaale International Airport and debt service for Trade and Development Bank. 

Ministry of Finance also indicated that public debt had continued to rise with the stock increasing by $2.25b Shs8.3 trillion), from $20.97b (Shs77.9 trillion) as of June 2022 to $23.22b (Shs86.3 trillion) as of June 2023. 

Of this, at least $9.4b was domestic debt, which constitutes 41 percent of public debt portfolio compared to 59 percent of external debt. 

However, the analysis noted that the nominal value of public debt as a percentage of gross domestic product, had declined from 48.6 percent in June 2022 to 46.2 percent. 

Data indicates, external debt rose from $12.8b (Shs47.6 trillion) to $13.79b (Shs51.2 trillion) due to increase in disbursement for projects and budget support with significant disbursements of $545m (Shs2.02 trillion) coming from Standard Bank and $196m (Shs728.8b) from Standard Chartered Bank. 

Undisbursed debt reduced from $4.09b (Shs15.2 trillion) to $3.29b (Shs12.2 trillion) due to increase in disbursements towards deficit financing and development programmes. 

In particular, undisbursed debt from multilateral creditors reduced from $2.99b to $2.41b, while that of bilateral creditors decreased from $1.08b (Shs4 trillion) to $860m (Shs3.19 trillion).  

Multilateral lenders, among them International Development Association, International Monetary Fund and African Development Fund, are still the largest source of Uganda’s external debt with a shares of 60.55 percent.