Uganda’s External Debt Dominated by US Dollar, Euro Emerges as Second Major Currency

Uganda's Foreign Debt Led by US Dollar, Euro Gains Ground
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US Dollars and Euros constitute the major currencies within the government’s external debt portfolio, according to the Finance Ministry’s annual debt report for June 2023. The report also reveals a significant increase in the country’s overall public debt.

Uganda’s Ministry of Finance has disclosed that the dominant currency within the government’s external debt is the US dollar, accounting for a substantial 48.42 percent, equivalent to approximately $6.68 billion. This marks the US dollar as the primary choice for financing Uganda’s external obligations.

The Euro stands as the second most influential currency in Uganda’s external debt, making up 32.88 percent, equivalent to Euros 4.53 billion. This significant presence of the Euro demonstrates its growing role in Uganda’s financial commitments.

According to the Ministry of Finance’s annual debt statistical bulletin for June 2023, Uganda’s public debt has been on a continuous upward trajectory. The total public debt stock has surged by 10 percent, translating to a $2.25 billion increase, from $20.97 billion in June 2022 to $23.22 billion by the end of June 2023. Furthermore, the domestic debt has grown by $1.27 billion, rising from $8.2 billion in June 2022 to $9.4 billion in June 2023, as indicated in the bulletin released in September.

In compiling its external debt, the Ugandan government mainly employs four major currencies: the US dollar, Euro, Chinese Yuan Renminbi, and Japanese Yen.

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The Finance Ministry’s analysis reveals that the Euro’s share in government external debt has increased by 3.32 percentage points during the FY2022-23. This growth can be attributed to a Euro 500 million disbursement from Standard Bank South Africa (SBSA) during the same fiscal year for budgetary support.

The Japanese Yen constitutes 5.51 percent of Uganda’s external debt, equivalent to 0.76 billion, while the Chinese Yuan Renminbi represents 5.39 percent, amounting to 0.74 billion. In the category of other currencies, their combined dominance stands at 7.8 percent, totaling 1.08 billion and is composed of various international legal tender.

The Finance Ministry’s acting director for debt and cash policy, Maris Wanyera, commented on the bulletin’s data, stating, “This 33rd edition of the Debt Statistical Bulletin (SSB) is a testament to our commitment towards transparency in debt management. It also embodies our dedication to providing the public with periodic and up-to-date information on our national debt.”

Uganda’s Permanent Secretary/Secretary to Treasury, Ramathan Ggoobi, emphasized the importance of reliable debt statistics, stating, “Reliable and up-to-date debt statistics are essential for informed decision-making by governments, investors, international financial institutions, and the general public.” He noted that the quarterly production of DSBs aligns with international best practices and demonstrates Uganda’s commitment to transparency in debt management.

Ggoobi further highlighted, “The DSB serves as a strategic tool that aids in fostering a deeper understanding of our national debt landscape.”

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