Uganda says seeks to borrow 500 mln euros – finance ministry

PUBLISHED: Tue, 15 Nov 2022 14:02:53 GMT
Elias Biryabarema
Reuters
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eBills of 5, 10, 20, 50 euros. Illustration pictures of bills and coins in euro. Cours-la-Ville, July 21 2022. (Photo illustration by Adrien Fillon/NurPhoto via Getty Images)

KAMPALA, Nov 13 (Reuters) – Uganda is looking to borrow 500 million euros ($517.6 million)for budget spending through various credit options excluding a Eurobond issue, a finance ministry document shows.

The proposed borrowing is likely to stoke fresh concern over Uganda’s ability to repay its rapidly expanding debt.

As a percentage of gross domestic product, public debt is now just short of 50%, Finance Ministry data shows, and the World Bank warned in June that Uganda needed to rein in ballooning public debt.

The East African nation has previously considered Eurobonds for government funding but ultimately decided it would be more prudent to source credit from low-interest bilateral lenders such as China.

In a letter sent to potential lenders last week and seen by Reuters on Sunday, Finance Minister Matia Kasaija said the government wants to borrow 500 million euros to fund the 2022/23 budget.

“Government is therefore seeking financing partners to structure medium-term and long-term financing, using all available financing options excluding the Eurobond,” Kasaija said in the letter.

The credit proposals should have minimum 10-year terms and must be submitted by Nov. 18, the minister said.

($1 = 0.9660 euros)

(Reporting by Elias Biryabarema; Editing by George Obulutsa)

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