This archive report was first published on 6 December 2019.
On December 6, 2019, Uganda announced plans to borrow 600 million euros (approximately Sh67.7 billion) from international banks to address a budget deficit in its 2019/2020 financial year.
The move comes after domestic revenue collections fell short by nine percent, with the Finance Ministry attributing the shortfall to delayed payment of $100 million in licence fees from a unit of South Africa's MTN group.
According to the Finance Ministry, the government is facing a total shortfall of 2.5 trillion Ugandan shillings ($680 million), and the borrowing will be used to finance part of the budget deficit.
Uganda's financial year starts in July, and the new borrowing is expected to add two percentage points to the country's public debt to GDP ratio, which currently stands at 43 percent, according to the central bank.
The International Monetary Fund has warned that Uganda's debt pile is likely to surpass 50 percent of gross domestic product in 2021/2022, heightening concerns about the country's financial stability.
