Uganda borrows Sh67.7b to plug budget deficit

Uganda plans to borrow 600 million euros (Sh67.7 billion) from international banks to plug a hole in its 2019/2020 budget after domestic revenue collections fell short by nine per cent, amid delays in implementation of some planned tax-generating measures.

The move could heighten concerns about the East African country’s growing debt pile, which the International Monetary Fund has warned would likely surpass 50 per cent of gross domestic product in 2021/2022. Uganda’s financial year starts in July. The Finance Ministry said in documents posted on parliament’s website that the government planned to borrow the money from a local unit of South Africa’s Standard Bank and regional Trade Development Bank. The documents said the government was facing a total shortfall of 2.5 trillion Ugandan shillings ($680 million) and the borrowing would be “to finance part of the budget deficit”.