Stakeholder Meeting on Debt Relief, Restructuring and Domestic Resource Mobilisation
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The spread of COVID-19 realities have far-reaching implications. In the case of Uganda, Covid 19 infections currently stand at just above 40,000 out of a population of 44 million people – but its economic aftermath will be long-lasting. The country has already projected a revenue shortfall of 3 trillion Ugandan shillings
[1]. Most shocking is that 97 per cent of the country’s domestic revenues for the next financial year 2021/22 will be spent on debt servicing.
[2] This is according to the budget framework paper that has been approved by the parliament for the next financial year. With public debt projected to increase in the next few years, debt levels and the subsequent costs to service them are becoming worrying. Worth noting is that debt servicing has remained a key challenge amidst the current crisis. The Government of Uganda has had to forego the much needed domestic resources to fight the pandemic, finance social sector priorities and invest in economic growth and development to repay loans. A case in point for the current FY 2020/21, the Government has projected to spend 12.3 trillion UGX (3.37 billion USD) on debt servicing. This accounts for 65 percent of domestic revenues to be raised within the financial year.