Uganda says it planned to borrow 1.89 billion dollars (6.9
trillion shillings) from external lenders in the 2020/2021 (July-June) fiscal
year to partly finance its budget.
This could come under pressure as veteran leader Yoweri
Museveni seeks re-election.
A finance ministry budget paper on Monday showed that the
funds would be in the “form of concessional and non-concessional” credit.
The paper did not indicate how much was borrowed in the
previous financial year.
It also did not indicate from whom the money would be
borrowed, but in recent years China has become one of Uganda’s top external
lenders.
Museveni, in power since 1986, is widely expected to seek
re-election early in 2021.
He is expected to face a formidable challenge from pop
star-turned-lawmaker Bobi Wine, whose real name is Robert Kyagulanyi.
Public spending typically surges in election periods in
Uganda, which has some times triggered pressure on consumer prices and the
local currency.
The paper said economic growth in 2020/2021 would be 6.2 per
cent, driven by higher productivity in manufacturing and agriculture and
“public and private sector investment as well as regional and domestic trade.”
Uganda’s mounting public debt has been fuelling concern.
The International Monetary Fund has urged authorities to
rein in borrowing.
Some opposition critics have also accused government of
front-loading debt before an expected windfall from oil sales.
Uganda hopes to commence crude oil production in 2022.
This month, the government said it was planning to borrow
600 million euros (661 million dollars) from international banks to plug a hole
in its 2019/2020 budget after domestic revenue collections fell short by 9 per
cent.
The shortfall was caused by delays in implementing some
planned tax-generating measures, according to the finance ministry.
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