Reuters reports that Uganda plans to borrow $660 million (KSh67 billion) to bridge the budget deficit in the 2019/2020 fiscal year.
The finance ministry says that the move was informed by a 9 per cent drop in domestic revenue collections.
Furthermore, documents from the finance ministry table in parliament show the Ugandan government’s total shortfall at $680 million (KSh69 billion).
The ministry intends to borrow from Standard Bank and Trade Development Bank.
The new borrowing will add 2 percentage points to Uganda’s public debt to GDP ratio, currently at 43 per cent. Borrowing in the last decade has been channelled to infrastructural projects such as transport and energy.
The International Monetary Fund has warned that Uganda’s debt is likely to surpass 50 per cent of GDP in 2021/2022. The Bretton Woods Institution has urged the Ugandan government to rein on deteriorating debt status.