KAMPALA – As at December 2020, total debt stock was USD 17.96 billion (UGX 65.83 trillion) indicating an increase from USD 13.3 billion (UGX 49.0 trillion) as at end of December 2019.
Out of the total public debt stock, external constituted a share of 64.98% equivalent to USD 11.67 billion (UGX 42.6 trillion) whereas domestic debt constituted 35.02% equivalent to USD 6.29 billion (UGX 22.9 trillion).
According to the Finance Ministry, the rise in total public debt is on account of increased external and domestic borrowing to address the socio-economic impact of Covid-19 and mitigate the negative effects of the economy.
“A look at Debt to GDP (nominal) ratio for other countries (2020) show Kenya at 69%, Rwanda at 60%, Burundi at 69%, Tanzania at 38%, Ethiopia at 55%, South Africa at 77%, United Kingdom at 85% and United States of America at 98%,” consoled the ministry.
Uganda’s flagship projects that account for increase in debt according to the ministry include: Karuma hydropower project, Isimba dam, Oil roads, expansion of Entebbe international airport, Meter and Standard guage railway, Development of Kampala industrial park etc.
“Public debt which stood at 47.2% of GDP at end of December 2020 is projected to remain sustainable.”
Public debt is projected to rise to 51.9% to GDP in FY 2021/22 on account of borrowing to finance key infrastructure projects espcially in transport, oil and gas sectors.
“Debt is projected to decline thereafter on account of increased domestic revenue as government implements the domestic revenue mobilisation strategy which targets to increase domestic revenue to GDP by 0.5% points per annum.”