Share of Uganda’s debt from commercial banks growing   

Multilateral lenders remain Uganda’s largest source of credit according to data from Status of Uganda’s Debt report. 

However, the share of debt sourced from multilateral lenders, the report shows, has been reducing while other sources such as China and commercial banks have increased their share.  

During the period ended June 2022, data from Ministry of Finance shows the share of multilateral credit stood at 61.7 percent, which was an 8.9 percent reduction in the seven years from June 2016 when it was 70.6 percent.

Other sources, data indicates, included World Bank, which contributed a share of 34.5 percent while bilateral lenders contributed 27.9 percent. 

The report also lists China and commercial banks as some of the other largest sources of Uganda’s external credit. 

Data shows that the share of Uganda’s credit sourced from both China and commercial banks has been increasing. 

For instance, in the seven years to June 2022, the share of credit from China has grown from 17.8 percent to 20.7 percent while that of commercial banks has grown from zero to 10.4 percent. 

Analysts have previously indicated that Uganda has been reducing its share of credit from more secure sources such as multilateral and bilateral lenders while increasing drawing more loans from expensive credit sources such as commercial banks. 

However, the increasing credit share from China has also been criticised given that in some cases government has been had to use sovereign assets as collateral for the loans.  

During the seven years to June 2022, the share of commercial bank loans, data indicates, grew rapidly, increasing from $1.33b, which represented a 10.39 percent rise by June 2022.

The Ministry of Finance yesterday said there has been an increase in expensive external commercial and domestic debt, but government was taking steps to address it. 

Earlier, the Ministry of Planning, in its quarterly debt statistical bulletin and public debt portfolio analysis, noted that as of September 2022, the stock of public debt had slightly reduced to $20.33b (Shs76.5 trillion) from $20.96b (Shs78.9 trillion) as of June last year.  

Of the $20.33b (Shs76.5 trillion), external debt constituted 60.6 percent or $12.32b (Shs47.75 trillion) while domestic debt constituted 39.4 percent or $8.01b (Shs31.06 trillion). 

Multilateral creditors include International Development Association, International Monetary Fund and African Development Fund, among others while bilateral creditors are categorised under the Paris Club and Non-Paris Club.  

Uganda’s multilateral debt is dominated by International Development Association ($4.22b) and African Development Fund ($1.42b) while bilateral debt is dominated by Exim Bank of China ($2.6b) and UK ($0.29b). 

Source of Uganda's external debt 

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