Uganda projects to borrow $2.6bln in 2023/24 FY

KAMPALA – The Ugandan government plans to borrow a total of almost 10 trillion Ugandan shillings ($3 billion) from domestic and international markets to help finance the next year’s budget, finance ministry documents show.

Uganda’s fiscal year starts in July and ends in June.

A ministry of finance 2023/24 budget document “Budget Framework Paper” seen by Reuters on Friday showed the government plans to draw around 80% of its borrowing from international credit markets while the rest will be contracted locally.

The Ugandan government typically borrows from the domestic market through the issuance of Treasury bills and bonds.

Loans from international markets will be tilted toward cheaper sources as the government focuses on limiting debt service costs, the document said.

“Government’s financing strategy is to reduce borrowing on commercial terms and focus more on concessional borrowing,” the document said.

In recent years China has been Uganda’s largest source of concessional loans.

Opposition critics have accused the government of reckless borrowing to fund profligate spending, while the central bank has said the rising cost of public debt repayments was putting undue pressure on public finances.

Economic growth in the next financial year was projected at 6%, up from this year’s forecast of 5.3%, boosted by “the pick-up in oil sector construction activities, growth in regional trade, and a rebound in agricultural production,” the ministry said. ($1 = 3,715.0000 Ugandan shillings)

(Reporting by Elias Biryabarema; Editing by Hereward Holland and Barbara Lewis)