Uganda Public Debt Rises To $37.1 Billion

Uganda’s total public debt rose by 14.8 percent in the 12 months to June, reaching $37.1 billion as the government increased domestic borrowing to finance a budget deficit, the finance ministry said.

The debt stock increased from $32.3 billion in June last year, according to a ministry report provided to Reuters.

As a share of gross domestic product, Uganda’s public debt rose to 54.3 percent from 51.3 percent over the same period. External debt accounted for 43.9 percent of the total.

The finance ministry said the increase was mainly driven by higher domestic debt issuance to fund the budget deficit in the financial year that ended in June.

The period also saw increased issuance of domestic Treasury bonds as the government prioritised longer-term borrowing to finance development needs.

“This strategy helps reduce refinancing and rollover risks,” the ministry said.

Uganda introduced a 25-year Treasury bond last year, the longest maturity among its domestic debt offerings, as part of efforts to extend the maturity of its debt portfolio.

The country’s central bank has previously raised concerns about rising public debt.

In August, ratings agency Fitch affirmed Uganda’s credit rating at “B” with a stable outlook, saying the rating was constrained by rising public debt and a high interest burden.

SOURCE: Reuters