Uganda’s external debt decreases as the USD’s dominance decreases

According to Uganda’s Ministry of Finance, the country’s undisbursed debt decreased slightly from $3.85 billion in September 2022 to $3.83 billion (or roughly Sh14 trillion) in December 2022 during the second quarter of the country’s Financial Year (FY) 2022/23.

In addition, the government reports that information from the ministry’s most recent quarterly debt statistical bulletin and public debt portfolio analysis shows that the amount of bilateral creditors’ undisbursed debt decreased from $0.97 billion in September 2022 to $0.94 billion in December 2022.

However, commercial banks and multilateral creditors reported an increase in undisbursed debt of $0.01 billion during the same time period from the $2.86 billion reported in September 2022.

Increasing from 56.25% in September 2022 to 56.43% in December 2022, the greatest share of Uganda’s external debt stock is now constrained. According to official data, semi-concessional debt as a percentage of total debt decreased over this time from 18.62% to 18.55%.

The percentage of non-concessional debt also dramatically climbed from 4.19% to 5.9%, while commercial debt decreased from 20.94 to 19.11 percent in the second quarter.

The Ugandan government claims that the substantial decrease in the percentage of commercial debt was caused by payments made to Standard Bank and Standard Chartered Bank in principle totaling $43.07 million throughout the assessment period.

The government’s foreign stock is dominated by four currencies, namely the US dollar, EUR, JPY, and CNY, according to a comparison of the composition of the external debt by concessionality between the end of September 2022 and December 2022.

The April 20 bulletin notes that from 52.6% ($6.41 billion) in September 2022 to 51.25% ($6.59 billion) as of December 2022, the portion of the foreign debt stock that was denominated in US dollars decreased by 0.81 percentage point.

On the other hand, over the same time period, the proportion of external debt dominated by Euros climbed from 28.48 percent (3.51 billion) to 29.2 percent, or $3.73 billion.

The percentage of non-concessional debt also dramatically climbed from 4.19% to 5.9%, while commercial debt decreased from 20.94 to 19.11 percent in the second quarter.

The Ugandan government claims that the substantial decrease in the percentage of commercial debt was caused by payments made to Standard Bank and Standard Chartered Bank in principle totaling $43.07 million throughout the assessment period.

The government’s foreign stock is dominated by four currencies, namely the US dollar, EUR, JPY, and CNY, according to a comparison of the composition of the external debt by concessionality between the end of September 2022 and December 2022.

The April 20 bulletin notes that from 52.6% ($6.41 billion) in September 2022 to 51.25% ($6.59 billion) as of December 2022, the portion of the foreign debt stock that was denominated in US dollars decreased by 0.81 percentage point.

On the other hand, over the same time period, the proportion of external debt dominated by Euros climbed from 28.48 percent (3.51 billion) to 29.2 percent, or $3.73 billion.

“The currency composition of 5.56% ($0.52 billion) represented by others AED United Arab Emirate Dirham, KRW (Korea South Won), IQD Iraqi Dinar), SAR (Saudi Arabia Riyal, GBP British Pound Sterling and IDI (Islamic Dinar) increased from 0.51 percent (068 billion),” said the Ministry of Finance.

In the first quarter of the 2023 fiscal year, the composition of the JPY and the CNY grew by 0.09 and 013 percentage points, respectively.

Source: norvanreports.com