By Elias Biryabarema, KAMPALA Uganda
Uganda
said it plans to borrow 6.9 trillion shillings ($1.89 billion) from external
lenders in the 2020/2021 (July-June) fiscal year to partly finance its budget,
which could come under pressure as veteran leader Yoweri Museveni (pictured) seeks
re-election.
A finance ministry budget paper seen by our reporter on
Monday showed the funds will be in “form of concessional and non-concessional”
credit.
The paper did not indicate how much was borrowed in
the previous financial year. It also did not indicate from whom the money would
be borrowed, but in recent years China has become one of Uganda’s top external
lenders.
Museveni, in power since 1986, is widely expected
to seek re-election early in 2021. He is expected to face a formidable
challenge from pop star-turned-lawmaker Bobi Wine, whose real name is Robert
Kyagulanyi.
Public spending typically surges in election
periods in Uganda, which has some times triggered pressure on consumer prices
and the local currency.
The paper said economic growth in 2020/2021 would
be 6.2%, driven by higher productivity in manufacturing and agriculture and
“public and private sector investment as well as regional and domestic trade.”
Uganda’s mounting public debt has been fuelling
concern. The International Monetary Fund has urged authorities to rein in
borrowing.
Some opposition critics have also accused
government of front-loading debt before an expected windfall from oil sales.
Uganda hopes to commence crude oil production in 2022.
This month, the government said it was planning to
borrow 600 million euros ($661 million) from international banks to plug a hole
in its 2019/2020 budget after domestic revenue collections fell short by 9%.
The shortfall was caused by delays in implementing
some planned tax-generating measures, according to the finance ministry. - Reuters
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