A general view shows the capital city of Kampala in Uganda, July 4, 2016. REUTERS
KAMPALA, Sept 24 (Reuters) – Uganda’s total public debt rose by 14.8% in the 12 months to June this year from the corresponding previous period as the government ramped up domestic debt issuance to fund a budget deficit, the finance ministry said.
The East African country’s total public debt stock surged to $37.1 billion in June, up from $32.3 billion in the corresponding month last year, the ministry said in a report provided to Reuters on Thursday.As a share of GDP, the debt load rose to 54.3%, up from 51.3% in the same period, while external debt accounts for 43.9%.
The increase in indebtedness stemmed mostly from higher domestic debt issuance to fund the budget deficit in the financial year that ended in June, the ministry said in its report.
The period saw increased domestic Treasury bond issuance, underscoring the government’s new strategy of prioritising long-term borrowing to finance development needs, it added.
“This strategy helps reduce refinancing and rollover risks,” the ministry said.
Last year the government introduced the 25-year Treasury bond, with the longest tenure of its domestic debt offerings, to help lengthen the maturity of the debt portfolio.The central bank has previously expressed concern over the rising debt. In August, ratings agency Fitch said Uganda’s rating, affirmed at “B” with a stable outlook, was constrained by rising public debt and a high interest burden.
Reporting by Elias Biryabarema; Editing by Clarence Fernandez
