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Uganda is seeking to borrow up to EUR 207.7 million, or about USD 242.55 million, from Citibank to help finance the construction of a major road in the eastern part of the country. The project is expected to improve connectivity and provide an alternative transport route between northern and southern Uganda. The proposed borrowing comes as the country faces rising public debt and a growing interest burden. The IMF expects Uganda’s debt-to-GDP ratio to increase to 55.5% in the current fiscal year and approach 60% by 2030/31.
Uganda is looking to borrow up to EUR 207.7 million, equivalent to about USD 242.55 million, from Citibank to help finance the construction of a key road in the eastern part of the country, according to its finance ministry.
Finance Minister Henry Musasizi told lawmakers that the road is expected to improve connectivity and provide an alternative transport link between northern and southern Uganda.
The proposed borrowing comes as Uganda's public debt continues to rise. The country's central bank has previously warned that increasing debt costs are putting pressure on resources that could otherwise be used for essential sectors such as education and healthcare.
In its latest Article IV consultation report, the International Monetary Fund (IMF) projected Uganda's debt-to-GDP ratio to rise to 55.5% in the fiscal year that began in July and increase to nearly 60% by 2030/31. The IMF also flagged a high debt service burden for the country.
Fitch Ratings has also highlighted the pressure from rising public debt and high interest costs. The agency recently affirmed Uganda's sovereign rating at B with a stable outlook, while noting that the country's debt and interest burden remained constraints on its rating.
Source Reuters
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