INTERNATIONAL – Uganda said on Tuesday its ballooning public debt was sustainable and it would borrow with care in the future, dismissing concerns from the central bank and the government’s auditor that growing indebtedness posed risks to the economy.
The East African nation’s appetite for credit has accelerated over the last decade, fuelled by leader Yoweri Museveni’s plans to expand transport and energy infrastructure.
But critics say the escalating borrowing could spark a crisis along the lines of those the country experienced in the 1990s and early 2000s before the World Bank forgave loans.
“The risk for government defaulting on debt repayment is non-existent,” Finance Minister Matia Kasaija told a news conference in the capital Kampala. However, future borrowing would be done “cautiously and selectively” to avoid potential risks.
As of June, Uganda’s total public debt stood at 41.5 percent of GDP, Kasaija said. The Central Bank of Uganda (BoU), however, said last year the debt stock including credit agreed but not yet disbursed topped 50 percent of GDP.