Ismail Musa Ladu
24 June 2009
Uganda's foreign debt has been doubling immediately after waivers, a new report by Parliament's budget committee has revealed.
Entitled, Performance of the National Economy for the third quarter of fiscal year 2008/9, the report warns that the "external debt situation has quickly deteriorated."
It notes that the country has carried on a syndrome of whetting its appetite to borrow more when its debts are forgiven.
Just three years ago, the World Bank, the International Monetary Fund and the African Development Bank wrote off 100 percent of Uganda's debts under the Multi Lateral Debt Relief Initiative (MDRI), the report discloses.
"The MDRI had dramatically lowered Uganda's debt stock of external debt from about $4.5 billion at the end of 2005/06 to $1.8 billion at the end of 2007/8," the report notes.
It added: "Surprisingly, the total external stock of debt surged again and as at the end of the third quarter of 2008/09 financial year, the debt stood at $1.9 billion."
MPs on the committee on National Economy, who are charged with the country's economic performance, have now slapped a ban on all government borrowing until a status of current loans is well accounted for by the Executive.
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Incredible! All of a sudden the debt is going to become unsustainable again. Both parliament and the executive are responsible for this mess. It is not enough therefore for the MPs show surprise rather they explain why they authorized the borrowing.