According to the Vice-chairperson of the committee Lawrence Bategeka, although loan disbursement performance has been improving over time, a significant amount of committed external debt amounting to 18 trillion shillings remains undisbursed.
The government has failed to disburse external debts amounting to
18 trillion shillings.
This is according to the report of the
Parliamentary Committee on National Economy.
According to the Vice Chairperson of the committee Lawrence Bategeka, although
loan disbursement performance has been improving over time, a significant
amount of committed external debt was not disbursed as of June 2019.
Bategeka says that failure to disburse the debts is an indication of slow
implementation of some of the projects especially in the energy, Works &
Transport, Agriculture and Education sectors that are poorly executed.
Bategeka was on Tuesday presenting a report to Parliament on the
state of indebtedness, grants and guarantees. The report comes at a time when
Uganda has been borrowing hugely during the COVID-19 pandemic and for other infrastructural projects.
He adds that the delays in implementation and low absorption among external debt-financed
projects do not only cause loss of public resources, but also leads to cost escalation
such as increased future prices of goods and services due to inflation and
extra administrative costs.
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According to Bategeka, despite the improvements in contracting
domestic debt of longer-term maturity, Uganda still has a very high percentage,
37% of its domestic debt maturing in one year, which exposes the country to significant
The committee wants the Government to make use of fiscal policy
which in turn means striking the right balance between growth, debt
sustainability and social objectives.
The committee also says that the speed of Uganda’s new debt acquisition
is worrying although Uganda’s debt is still sustainable and that the country is
not under debt distress.
In their report, the committee recommends that the government
should expedite the implementation of approved projects financed through
The committee notes that public debt will be manageable if
infrastructure spending raises growth and domestic revenues improve further.
Uganda's public debt as of February 2020 stands at 48.91 trillion