Uganda plans to borrow $1.89b from external lenders to finance its 2020/2021 budget which stands at $10.8 billion. Details seen by Reuters indicate that the government will seek both concessional and non-concessional credit lines.
While there are yet no details on the exact sources of the funds, China has, in the recent past been the main external creditor.
Earlier, Uganda planned to borrow $661 million from international banks to plug in a 9% shortfall in the 2019 budget.
Uganda’s debt has been a source of concern public spending, with both local and international bodies raising concerns. As of June 2019, the country’s public debt stood at $12.55 billion. About $8.35 billion came from external sources while $4.2 billion came from domestic debt.
Finance Minister Matia Kasaija has several plans to curb the growing debt. First, he says the government will increase domestic revenues, setting the new tax revenue target to $5.87b up from $ 5.56b. Second, the country will prioritize the timely execution of projects, looking for the timely realization of their returns. Other efforts to rein the growing debt include prioritizing concessional debt and improving the country’s export earnings.