Uganda’s Cabinet has approved the proposal to borrow up to USD 166 Million (609.8bn) and Euro 200m (Shs884.5bn) from the African Export Import Bank (AFREXIM); andd Euro 200m (884.5bn)from Trade & Development Bank, to finance the development and infrastructure budget for the FY 2020/21.
The loans will total to Shs2.37 trillion.
It should be noted that Uganda’s total public debt increased by 21.7 percent in FY2019/20, the Bank of Uganda (BoU) Monetary Policy Report for December 2020 revealed.
According to the report, external debt increased from US$ 8.35 to US$ 10.45 billion, while domestic debt increased from Shs16.2 trillion to Shs19.1 trillion.
“As a percentage of GDP, nominal public debt increased from 35.3 percent in June 2019 to 41.0 percent in June 2020. In Present Value terms, public debt to GDP increased from 27.0 percent to 31.8 percent,” the report reads in part.
It adds: “The provisional total public debt stock as at end October 2020 stood at Shs63.35 trillion, corresponding to an increase of 13.8 percent from June 2020 compared to an increase of 3.9 percent over the same period the previous year.”
According to the report, Public external debt continued to maintain the dominant share of 67.5 percent of the total public debt
As a percentage of GDP, the report says, nominal public debt increased from 35.3 percent in June 2019 to 41.0 percent in June 2020.
There are worries that Uganda could soon hit the debt ceiling given the rate at which it is borrowing.
Credit: businessfocus.co.ug
