The Kampala City Traders Association, Kacita is concerned about the high debt burden Uganda is having saying this has affected their businesses and exchange rate Volatility.
According to KACITA Spokesperson Issa Ssekitto, the indebtedness of the country has forced commercial banks to increase borrowing terms for traders which later affect their businesses.
Ssekitto says the only way the government can reduce on the debt burden is by reducing on the administrative costs because this alone has consumed a lot of money borrowed from different banks.
Uganda’s public debt has been sporadically rising from only $1.9b in the 2008/09 financial year to over $11b currently.
Taking the rate at which Uganda is paying off its debt, it will take 94 years to repay the existing stock of debt. This is according to a report by the Parliament’s Committee on National Economy for the 2016/17 financial year.
The report puts the stock of external debt for both the public and private sector at 41.4 per cent of gross domestic product (GDP), up from 40.2 per cent in the preceding financial year.
It warns that the risk of Uganda rolling over external debt is increasing, just like the cost of attracting debt as the government continues to source for external debt on less concessional terms.