The Ministry of Finance, Planning and Economic Development has revealed that loans to a tune of Shs12Trn haven’t been disbursed as at June 2023 yet they are attracting interest.
Government made the revelation in the Debt Statistical Bulletin and Public Debt Portfolio Analysis for June 2023 published by the Directorate of Debt and Cash Policy of the Ministry of Finance, which indicated that although there has been a reduction in undisbursed loans, the figure of idle loans remains unacceptably high.
“Undisbursed debt reduced from US$4.09Bn (Shs15.315Trn) as at June 2022 to US$3.29Bn (Shs12.320Trn) by end June 2023. This was due to the increased disbursements registered during the year for financing government deficit and development programmes. In particular, the undisbursed debt from multilateral creditors reduced from US$2.99Bn in June 2022 to US$2.41Bn in June 2023. While that from the bilateral creditors also decreased from US$1.08Bn to US$0.86Bn during the same period under review,” read in part the report.
The report also indicated that there were 12 active loans that Government had guaranteed on behalf of both the private and public sector, with the report revealing that as at end June 2023, the total guaranteed portfolio is US$120,076,564 (Shs449.607Bn) and the loan portfolio is comprised of two entities Uganda Development Bank Limited holding 9 of the 12 guaranteed loans and Islamic University in Uganda holding 3 guaranteed loans.
According to the Ministry of Finance, as at June 2023, Islamic Development Bank was the top guaranteed creditor with a guaranteed amount of US$29.01Mn, constituting 22.44% of the portfolio, while the Arab Bank for Economic Development in Africa was guaranteed to a tune of US$26Mn, while the African Development Bank and European Investment Bank were guaranteed by US$15Mn each. The international Islamic Trade Finance Corporation guaranteed by US$10Mn and India Exim Bank with US$5Mn.
As at June 2023, the gross exposure of the Government to the disbursed and outstanding guaranteed debt stood at US$62.62Mn up from US$24.89Mn a year ago, indicating an increase of 152% from last year’s risk exposure. The heightened risk can be attributed to disbursements made on the various newly guaranteed loans amounting to US$50Mn. However, these disbursements were also offset by some repayments made within the year amounting to US$12.3Mn on the various loans.
