By Enyichukwu Enemanna
Despite the June warning from the World Bank against further borrowing to checkmate public debt, Uganda is seeking a 500 million euros ($517.6 million) to finance its budget through various credit options excluding Eurobond, a finance ministry document shows.
The proposed borrowing is likely to increase concerns over the country’s ability to repay its rising debt profile.
Finance Ministry data shows, as a percentage of gross domestic product, public debt is now less than of 50%.
Earlier, the East African country had considered Eurobonds for government funding but ultimately decided it would be more prudent to source credit from low-interest bilateral lenders such as China.
In a letter addressed to potential lenders last week, Finance Minister Matia Kasaija said the government wants to borrow 500 million euros to fund the 2022/23 budget.
“Government is therefore seeking financing partners to structure medium-term and long-term financing, using all available financing options excluding the Eurobond,” Kasaija said in the letter.
The credit proposals should have minimum 10-year terms and must be submitted by Nov. 18, the minister said.
