Uganda halts almost all external financing to control its growing debt

11/14/2024 1:43:58 AM

(MENAFN) The Ugandan government is going to cute external borrowing by 98 percent to curb the nation’s surging debt, based on the Finance Ministry.

The ministry government further declared important reductions in government consuming and domestic borrowing for the financial year 2025-26. Total consuming is going to be slashed by over 20 percent, and lower domestic borrowing via Treasury bonds by 54 percent in the upcoming financial year to ease debt pressure and avoid problems.

The conclusion comes as the nation grapples with surging public debt, that increased to USD25.6 billion in June from USD23.7 billion in the past year, based on ministry data.

As of 2023, Uganda’s public debt had arrived an exceptional level, accounting for 52 percent of GDP.
The growing public debt has sparked widespread concerns about the risk of a severe debt crisis if urgent measures aren’t taken to shift the current trajectory.

Even though the government asserts borrowed funds were consumed to improve economic development, the rise in public debt has caused credit rating reduces.

Ramathan Ggoobi, the enduring assistant of the Ministry of Finance, who is also the Treasury secretary, informed a Turkish news agency that Uganda has faced quite a lot of crisis, such as surging inflations as well as loan rates.

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