KAMPALA – The Minister of State for Planning, David Bahati tabled documents before Parliament on Thursday, December 5 indicating that Uganda’s debt has further increased to a tune of UGX45.825T.
The details are contained in a motion tabled by Bahati seeking Parliamentary approval to borrow €600M from both Stanbic Bank and Trade Development Bank totaling to UGX2.4T to finance the 2019/2020 budget deficit.
Bahati’s motion read in part; “As at the end of June 2019, total public debt amounted to USD12.43Bn equivalent to UGX45.825T out of which external and domestic debt accounted for USD 8.27 billion (66.6%) and USD4.16 billion (33.4) respectively.”
The Minister further indicated that nominal Debt as a percentage of GDP stands at 35.9% using the rebased GDP of Shs128.49 Trillion for Fiscal year 20l8/2019.
He said that the impact of borrowing €600 Million on the debt position for FY 2019/2020 will add about 2% to Debt to GDP ratio but maintained that despite the impending borrowing, Uganda’s debt levels will remain sustainable.
“This number is important because it clearly highlights the proportion of the country’s debt to its income,” said Bahati who attributed source of the figures to the Directorate of Debt and Cash Policy, at the Ministry of Finance, Planning and Economic Development.
It should be recalled that in the 2018 Auditor-Generals’, it was revealed that Uganda’s public debt had increased by 22% from UGX33.99T as of June 2017 to UGX41.51T as of June 30, 2018.
The Auditors warned on the stringent terms that are laid out in most of the loan agreements, arguing that some of the conditions could have adverse effects on Uganda’s ability to sustain its debt.
These conditions according to the audit team include; waiver of sovereign immunity by government over all its properties and itself from enforcement of any form of judgment, adoption of foreign laws in any proceedings to enforce agreements, requiring government to pay all legal fees and insurance premiums on behalf of the creditor,” the report read in part.
Keto Nyapendi, Deputy Auditor General said: “We did a special audit on public debt and we are concerned about sustainability, it is currently sustainable but if we go at the rate at which we are going, we need to be a little bit more careful. We are taking in more commercial loans, we are taking in loans whose conditionality are probably not conducive for us as a developing country.”
Deputy Speaker, Jacob Oulanyah referred the motion to the Committee of National Economy for consideration before Parliament takes a final decision on the matter.