Following a story carried by a local daily on Saturday last week showing how the auditor general of Uganda is worried with the growing debt burden, the finance minister, Matia Kasaija stresses that govt is in full control of all the borrowing as required by the law.
Addressing a news conference today in Kampala, Kasaija says, the borrowing is geared at meeting the financing requirement at a minimum cost subject to prudent degree of risk as well as ensuring the sustainability of public debt over mid and long term period and promote the development of domestic financial markets.
He further says that the govt is committed to financing its activities in a cost effective manner, with multilateral creditors like the world bank are providing the largest part of government financing with the most favorable financing terms.
In FY2016/17 multilaterals accounted for 68% of total outstanding debt while bilateral creditors accounted for only 31% and commercial banks 1% of the external debt stock.
The minister confirms that at the end of June 2018, Uganda’s total public debt stock amounted t USD. 10.7Bn, equivalent to UGX.41.3Trn. With external debt accounting for UGX.27.9BN while domestic debt is equivalent to UGX.3.5BN.
However, civil society budget advocacy groups also warns that with this huge debt burden, it very dangerous for a poor country like Uganda to continue borrowing at the current rate.
They further advise that Uganda should fast settle her current debt burden before going in for more borrowing.
The finance minister further challenges Ugandans not to live in fear that the Chines will at one time take over Uganda following the loans Uganda is getting from them. Kasaija notes that government is strongly controlling its borrowing rates from China with a strong about the future of this nation.