Government says Uganda’s debt is equivalent to 49.8% of GDP. COURTESY PHOTO

The government has announced measures it will undertake to keep the country’s debt within sustainable levels.

As at end December 2020, total debt stock was $17.96 billion (equivalent to Shs65.83 trillion) indicating an increase from $13.3 billion (equivalent to Shs49.0 trillion) at the end of December 2019.

Of the total public debt stock, external debt constituted a share of 64.98 per cent, equivalent to $11.67 billion (Shs42.6 trillion) whereas domestic debt constituted 35.02 per cent, equivalent to $6.29 Billion (Shs22.9 trillion)

Amos Lugoloobi, the newly appointed State minister for finance in charge of Planning, who presented the 2021/2022 financial year budget, said Uganda’s debt is equivalent to 49.8% of GDP.

“Mr. Speaker, Uganda’s debt amounted to US$ 17.96 billion as at 31st December 2020, equivalent to 49.8% of GDP. Borrowed funds have been used to finance mainly infrastructure projects such as the Karuma and Isimba hydropower plants, oil roads, development of airports industrial parks, transmission lines, water and irrigation projects,” he said.

Nevertheless, the minister said Uganda public debt remains sustainable in the short, medium and long term.

“I reaffirm Government’s unwavering commitment that Uganda shall continue to honour its debt obligations as they fall due. Uganda will not default on repayment of its debt. All contractual debt obligations will be fully honoured,” he said.

Mr Lugoloobi said Government, to keep the debt within sustainable levels, will ensure that projects are well appraised to allow only those that are viable and aligned to the national development plan.

He added that government will prioritise borrowing for only projects that enhance socio-economic transformation, and enhance project implementation, prioritize borrowing from concessional sources; and increase the maturity profile of the domestic debt.