The Ministry of Finance has announced in its annual debt statistical bulletin that Uganda’s debt stock increased from Shs 34.5 trillion in June 2023 to Shs 40.6 trillion a year later.
Due to the government’s resource mobilisation plan, domestic public debt rose from 13% to 18% over the past fiscal year.
According to the Ugandan newspaper The Monitor, the government’s debt from treasury bills climbed to Shs 6 trillion, up from Shs 4.9 trillion, while bond debt increased from Shs 29.6 trillion to Shs 34.6 trillion.
During this period, domestic debt issuance surged to Shs 15.2 trillion from Shs 11.3 trillion, reflecting a 34% rise compared to the previous year. Of this, Shs 7.4 trillion came from treasury bills, while bonds accounted for Shs 7.8 trillion.
The yield curve dropped during the fiscal year, following a reduction in the Central Bank Rate from 10% to 9.5% in July 2023.
Banks hold the largest share of government debt at 40%, followed by pension and provident funds, which account for 30%.
Additionally, the report shows that domestic debt servicing increased by Shs 3.8 trillion, rising from Shs 12 trillion to Shs 15.885 trillion. This growth in debt servicing reflects a steady rise in the net domestic finance objective over the years.
Uganda’s earlier plans to borrow
The Ugandan government indicated in February that it was considering borrowing Shs13 trillion ($3 billion) from both local and international markets.
This funding was aimed at supporting projects from 2024 to 2025, and it represents a slight increase from the original borrowing plan.
Initially, the government had planned to borrow Shs11.5 trillion by the end of the fiscal year, as reported by The Monitor.
According to the Budget Framework Paper, the majority of the adjusted loan would be sourced externally, with around Shs8.9 trillion coming from international lenders and Shs4.1 trillion from domestic financiers.
The increase in the new amount is due to the adjusted domestic loans, which have been set at Shs3.2 trillion.