By Our Reporter
15th June 2023
Uganda’s public debt to GDP will reduce by the end of this financial year as the government tries to ensure economic stability and future growth.
According to Finance Minister, Matia Kasaija, Uganda’s public debt stood at 80.2 trillion shillings or over twenty-one billion dollars as of the end of December 2022.
More than half of the public debt or 47.9 trillion shillings or 12.9 Billion dollars was in external debt.
Kasaija said domestic debt stood at about 33.4 trillion shillings or 8.9 billion dollars.
The stock of public debt will stand at 88.9 trillion shillings or 23.7 billion dollars by the end of this financial year.
Kasaija while reading the 2023/2024 budget to Parliament however said the public debt to the Gross Domestic Product (GDP) is projected to drop to 48.2% from 48.6% at the end of June 2022.
The government has been under pressure to reduce the amount of public debt.
Civil Society Budget Advocacy Group (CSBAG) and other analysts have in the past indicated that debt servicing was taking a huge chunk of the budget.
They have indicated that the rising cost of debt servicing and the costly domestic debts, as well as external commercial loans, were negatively affecting the economy.
At the end of the financial year 2021/2022, the Ministry of Finance projected that debt servicing as a percentage of revenue increased by 30%.
It projected that at the end of the financial year, debt servicing would increase due to heightened domestic interest rates, higher inflation as well as the increasing cost of external debt amidst tightening global financing conditions.
Kasaija confirmed that by the end of the financial year, the cost of servicing domestic and external debts will stand at 34.1%.
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