Growth And Foreign Debt: The Ugandan Experience
Date
1997-11
Authors
Mbire, Barbara
Atingi, Michael
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
This paper analyses Uganda’s external debt problem. Like many other countries in the
sub-Saharan Africa, Uganda is a severely indebted low-income country. Uganda’s total
debt stock at end June 1993 was estimated at US$2.64 billion, with a debt service ratio of nearly 80%. A look at Uganda’s debt profile since the 1970s reveals a composition of
debt mainly from multilateral creditors. The study particularly links debt to economic
growth. A major observation is the acute debt servicing obligation of the country, and
the fact that a large proportion of Uganda’s debt is not eligible for rescheduling. Debt
payments have been a fundamental cause of low economic growth. Of great concern is
whether the economy can sustain its current growth rate of 5% per annum and at the
same time maintain adequate domestic investment, given the heavy reliance on foreign
import capital flows. Debt relief is not enough; continued government commitment to
structural reforms and sound debt management are essential. The need to continue the
ongoing restructuring of the economy and promote further growth is apparent. But how
sustainable and possible is this challenging path without accumulating more debt?
Description
HJ 8833.3 B37 1997
Keywords
Debts, External - Uganda , Uganda - Economic conditions - 1979