The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Minister of Finance Matia Kasaija has said Uganda’s debt remains sustainable with nominal debt to GDP of 41.5%.
He said the debt levels are comfortably below the international sustainability threshold of 50% debt to GDP ratio – beyond which debt starts getting unsustainable – and is significantly below the sub-Saharan average (45.4% debt to GDP).
“I would like to assure the country at large, that our debt is sustainable, and is projected to remain sustainable in the medium to long term,” he said in a statement. Kasaija was reacting to recent media reports highlighting the burden Uganda’s economy faces with increasing debt.
The minister of finance, planning and economic development stated that this performance includes the financing of the flagship projects like the power generation plants at Isimba and Karuma, the development of Kabaale International Airport and the construction of Entebbe Express High Way.
“We therefore compare very favorably with peer countries, because most of our debt has been contracted on concessional terms, unlike other countries in the continent who have contracted a lot of commercial debt like Eurobonds.
He boasted that with the investments that our debt is financing, the capacity of our economy to service its debt obligations will significantly increase. He added that in addition, the increase in revenue arising from implementation of the new Domestic Revenue Mobilization Strategy will reduce the country’s borrowing requirements in the future.
“In addition, all debt payments are programmed and prioritized to ensure that debt is paid as and when it falls due. The risk for government defaulting on debt repayment is nonexistent in our budgeting cycle and should not be of concern to anyone,” he stated.
He reiterated that government will however continue borrowing cautiously and selectively for infrastructure development. He noted that the intention in this was to grow the economy which in turn “boosts domestic revenues, promote exports to earn foreign exchange which the country uses to service our external debt thus enhancing our capacity for debt sustainability.”
FULL STATEMENT
Press Release – Public Debt of Uganda by The Independent Magazine on Scribd
