US ambassador to Uganda, Ms Deborah Malac. FILE PHOTO
KAMPALA (DAILY MONITOR) – The government must begin to rein on her “overzealous” appetite to borrow before it is too late, the US ambassador to Uganda, Ms Deborah Malac, has said.
Speaking to journalists yesterday at the US Embassy in Kampala, Ms Malac said the level at which the government is borrowing, if not controlled, could impact the quality of service delivery.
“We are concerned about the rising debt levels because we have been through that experience. With high debt level, you end up using so much to service the debts and that takes away what you would have used to deliver services,” she said.
A decade after global debt movements campaigned for debt cancellation, many African countries, including Uganda, are either in debt difficulties or quickly degenerating into debt.
Currently, 30 per cent of the National Budget is servicing interest on Uganda’s rising debt.
By the end of 2016, Uganda’s external and domestic public debt amounted to $ 8.7 b (about Shs32 trillion).
Although government says this is below a 50 per cent threshold beyond which public debt becomes unsustainable, the concern is the rate at which the debt is incurred.
According to Uganda Debt Network Research, the Total Public Debt for Uganda by June 2017 (end of FY 2016/17) was in excess of $13 billion (about 47.5 trillion).
Speaking about African Growth and Opportunity Act (Agoa), Ms Malac said Uganda has not properly taken advantage of the deal, adding that it will be sad if the pact comes to an end.Agoa was renewed in 2015 for 10 years.
The ambassador said the US was willing to help Uganda improve in areas that will see her take full advantage of Agoa.
On the agreement the government signed with a consortium of American and Italian firms to finance and construct a $4-billion refinery in Hoima District, Ms Malac said it was timely and that they will keep their part of the bargain.