Uganda’s growing appetite to borrow both domestically and externally has seen the country’s public debt hit Shs43 trillion in record time.
According to the Report of Budget Committee on 2019/20 budget estimates released this week, the accumulating public debt points to increasing vulnerabilities to the country.
The report that was tabled on the floor of Parliament by Amos Lugoloobi, Chairperson Budget Committee highlighted that the total public debt stock increased by 12.5% to USD11.52bn (approximately Shs43.31 trillion) as at end December 2018 from USD10.24bn (approximately Shs38.5 trillion) at end December, 20l7.
The report further stated that the external debt stock increased by USD 0.78Bn to USD7.66Bn by end December 2018 from USD6.88Bn at end December 2017 with the increase mainly from China (25 percent) and World Bank (40 percent).
The Committee noted that the stock of undisbursed debt as at 31st December, 2018 amounted to USD4.05bn as compared to USD4.48bn as at end December 2017 and the decrease in undisbursed stock is attributed to the improved performance of projects.
“The Committee observes that Government has continued to contract public debt in order to finance infrastructure gaps especially in the energy and transport sectors,” Lugoloobi said.
He added: “Although the debt sustainability analyses indicate a low risk of debt distress for Uganda, the rate at which public debt stock is accumulating, points to increasing vulnerabilities to the country.”
Additionally, the report says that the multilateral Creditors dominate the undisbursed loan stock with 61 percent, bilateral creditors are 38 percent and Commercial Banks with 1 percent of the total undisbursed stock and the bulk of undisbursed loan projects is composed of large infrastructure projects like Kabaale International Airport, Busega-Mpigi Expressway, the Entebbe Airport and the various power grid extension projects.