Uganda’s external debt has increased by 2.2 percent, rising from Ugx 53.19 trillion to Ugx 54.37 trillion, according to the latest audit report by the Auditor General, Edward Akol.
The report highlights that the rise in debt is largely due to borrowing from multilateral creditors, which grew from Ugx 33.06 trillion to Ugx 35.15 trillion.
Akol presented the report for the 2023/2024 financial year to the Deputy Speaker of Parliament, Thomas Tayebwa, on Wednesday.
While some positive trends were noted, such as a 9.9 percent reduction in commercial bank debt (from Ugx 7.15 trillion to Ugx 6.44 trillion) and a modest decrease in bilateral debt (from Ugx 12.98 trillion to Ugx 12.77 trillion), Akol cautioned that these figures do not eliminate concerns about the country’s fiscal sustainability.
He emphasised that continued borrowing could limit the government’s capacity to fund essential domestic programs.
As Uganda prepares to implement its National Development Plan (NDP IV), the Auditor General recommended a review and strengthening of the medium-term debt management strategy to ensure more sustainable debt practices.
Akol also raised concerns about the government’s payment of high commitment fees on undisbursed loans.
The report revealed an increase in undisbursed loans amounting to Ugx 1.89 trillion, representing a 12.95 percent rise from the previous year.
This has resulted in the government paying Ugx 73.9 billion in commitment fees, a cost that reflects inefficiencies in project implementation.
In response, the Ministry of Finance has introduced a Project Implementation Management System (PIMS) aimed at improving the absorption of funds.
However, Akol urged the government to identify and resolve bottlenecks that are hindering project implementation to increase the effective use of borrowed funds and reduce the costs of servicing debt.
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