The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | The government has failed to disburse external debts amounting to 18 trillion shillings.
This is according to the report of the Parliamentary Committee on National Economy.
According to the Vice Chairperson of the committee Lawrence Bategeka, although loan disbursement performance has been improving over time, a significant amount of committed external debt was not disbursed as of June 2019.
Bategeka says that failure to disburse the debts is an indication of slow implementation of some of the projects especially in the energy, Works & Transport, Agriculture and Education sectors that are poorly executed.
Bategeka was on Tuesday presenting a report to Parliament on the state of indebtedness, grants and guarantees. The report comes at a time when Uganda has been borrowing hugely during the COVID-19 pandemic and for other infrastructural projects.
He adds that the delays in implementation and low absorption among external debt-financed projects do not only cause loss of public resources, but also leads to cost escalation such as increased future prices of goods and services due to inflation and extra administrative costs.
According to Bategeka, despite the improvements in contracting domestic debt of longer-term maturity, Uganda still has a very high percentage, 37% of its domestic debt maturing in one year, which exposes the country to significant refinancing risks.
The committee wants the Government to make use of fiscal policy which in turn means striking the right balance between growth, debt sustainability and social objectives.
The committee also says that the speed of Uganda’s new debt acquisition is worrying although Uganda’s debt is still sustainable and that the country is not under debt distress.
In their report, the committee recommends that the government should expedite the implementation of approved projects financed through external borrowing.
The committee notes that public debt will be manageable if infrastructure spending raises growth and domestic revenues improve further.
Uganda’s public debt as of February 2020 stands at 48.91 trillion shillings.
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