Our debt is manageable – Kasaija

The Finance Minister, Matia Kasaija says that Uganda’s Shs 41.3 trillion public debt is sustainable and is projected to remain sustainable in the medium to long term.

Addressing journalists at the Uganda Media Centre over reports in the media quoting the Auditor General’s report for the financial year that ended on June 30, 2018, Kasaija said, the debt levels are comfortably below the International Monetary Fund (IMF) threshold.

“The debt levels are comfortably below the international sustainability threshold (for instance below 50% debt to Gross Domestic Product-GDP ratio) beyond which debt starts getting unsustainable and significantly below the sub-Saharan average (45% debt to GDP)” Kasaija said.

The media last week was awash with reports that Uganda’s public debt had reached worrying levels after the Auditor General reported that the debt had moved within 9 percentage points of the IMF threshold.

This would result into the country losing property in a bid to finance the debt due to uncontrolled borrowing, a report that Kasaija disputed on grounds that the government’s borrowing is controlled and guided by the Public Debt Management Framework (PDMF-2013).

The objectives of the framework are; to meet government financing requirements at the minimum cost, subject to a prudent degree of risk, ensure that the level of public debt remains sustainable over the medium-term and long term horizon while being mindful of the future generations and promote the development of the domestic financial market.

Kasaija further told journalists that during the financial year 2017/2018, multilateral creditors accounted for 68% of the total outstanding debt while bilateral creditors accounted for 31% and commercial banks only accounted for 1% of the external debt stock

“The government of Uganda aims to finance its activities and projects in the most cost effective manner. Multilateral creditors, like the World Bank and African Development Bank (ADB) have provided the largest part of government’s financing with the most favorable financing term” Kasaija said.