Budget: Uganda's debt burden hits $8.7b

The country's external and domestic debt has hit $8.7 billion (sh28 trillion), finance Minister, Matia Kasaija, has revealed.

According to Kasaija, the debt burden, which is equivalent to this year's country's budget, accounts for 33.8% of the country's Gross Domestic Product (GDP).

"Madam Speaker, Uganda's external and domestic Public debt amounted to $8.7 billion as of 31st December 2016. In nominal terms this is equivalent to 33.8% of our GDP. However, when future debt payment obligations are discounted to today's value, our Public Debt to GDP ratio," he said on Tuesday in his budget speech at Serena Hotel conference centre in Kampala.

Kasaija said the economic growth of 3.9% is higher than the average Sub-Saharan Africa growth rate this year, which is estimated to be only 1.4%.

Growth in agricultural output, the minister added, slowed to 1.3% this year compared to 2.8% in the previous year.

The main reason for the low agriculture growth, Kasaija said, was the unusually prolonged droughts. According to his budget speech, industrial sector growth also dropped to 3.4% this year as against 4.7% last year.

"This is because of contraction in mining and quarrying activities. The Construction sector also slowed down.  Growth in Services also slowed to 5.1% compared to 5.9% last year as a result of marginal growth in trade and transportation, and contraction in financial services.  But on a positive note, aggregate demand, while subdued, has grown at 2.7% this year, compared to 1.0% last year," he said.