13 July 2009

Uganda: Government's External Debt at $1.8 Billion

Kampala — UGANDA'S public external debt rose to $1.8b in 2008 from $1.62b in 2006, the Bank of Uganda has said. "The public external debt was at $1.6b in 2006, but by the end of 2008, it had risen to $1.82b," said Dr. David Kihangire, the bank's executive director for research.

"The private sector external debt has also risen from $626.7m in 2005 to $727m in 2006 and $814.7m in 2008," he added. He said this while presenting the preliminary results for the private sector investment survey for 2008 at the Imperial Royale Hotel in Kampala, recently.

Kihangire said the bulk of the private sector external debt was long-term, accounting for 87% of the total debt. "On average, the manufacturing sector had the bulk of debt amounting to 31.3% followed by the mining sector with 18.7%.

"Wholesale and retail trade had 14.3%, while the community had the least share of the debt," Kihangire said. He explained that the major sources of the external debt were Canada, recording 19% on average, followed by the UK at 16.5%, Kenya with 9%, Bermuda 7.3% and Switzerland with 6.4%.

He said the debt disbursements amounted to $136.5m during 2006 and rose by 33% to $182m in 2007. "The bulk of the debt disbursements were from Kenya, Mauritius, South Africa, Canary Islands, Pakistan, France, UK and international organisations," Kihangire said.

He noted that during the period under review, transport and communication were the highest recipients of debt disbursements followed by wholesale and retail trade, manufacturing, and the financial services sector.

"Debt repayments amounted to $60.7m in 2006 and rose by 75% to $106m in 2007. The bulk of these repayments went to the UK, South Africa, Canada and Switzerland.

They were mainly by manufacturers, wholesale and retail traders, mining, construction, transport and communication sectors," he said.

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