KACITA worried about growing debt burden

By Daudi Zirimala

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.

Kenya agrees to pay former Uchumi workers and suppliers

The governments of Uganda and Kenya have formed a committee to spearhead the clearance of debts left behind by Uchumi Supermarket.

Trade and Industry Minister, Amelia Kyambadde, says the ten-man committee is led by Julius Onen, the Trade Ministry, Permanent Secretary and Kenya’s Principle Secretary of Foreign Affairs and International Trade, Dr. Monica Juma.

According to Kyambadde, the committee will develop a framework for settling financial claims left behind by Uchumi. Uchumi closed its operations in Uganda in October 2015 due to financial constraints leaving hundreds of its employees unpaid and suppliers demanding over Shillings 8 billion in arrears.

Kyambadde told the media in Kampala today that the inter-governmental committee has been tasked to negotiate with the suppliers and workers to withdraw their suits against Uchumi to allow for the settlement of their arrears.

In December, Zebu Emporium and Trinity Textiles Uganda dragged Uchumi to court over failure to honour payment agreements for supplies made between 2012 and 2015.

Kyambadde says though some of the suppliers still want to pursue the court cases, the government of Kenya has given assurance that it will recover all monies owed to the Uganda suppliers. She says though the debt figures are estimated at 8 billion Shillings, some suppliers have not made claims.

Fred Ahimbisibwe, the Principle Commercial Officer at the Ministry of Trade says the ministry is working with the Private Sector Foundation Unit (PSFU) to compile a list of all suppliers and what is owed. The committee is expected to start work on February 12.