KAMPALA (Reuters) – Uganda said on Thursday it expects its mountainous public debt to enter a “declining trend” helped by strong economic growth, which is projected to hit 7% when the country expects to begin oil production in 2025.
The east African country’s ministry of finance has previously said it is concerned about the growing public debt load and surging debt-servicing costs, and similar worries have been expressed by the central bank and others.
To help ease its debt problems, the ministry said it will not conduct any external borrowing in the new financial year starting in July.
“We expect public debt as a share of GDP to be on a declining trend, on the back of robust economic growth,” Ramathan Ggoobi, Uganda finance ministry’s top Treasury official, said in a statement sent out by the Media Centre, the government’s communications department.
“In the medium term, economic growth will be driven primarily by activities in the oil and gas sector… We project that real GDP growth will increase to over 7 percent at the start of commercial oil production.”
Uganda plans to start pumping crude oil in 2025 from fields in the country’s west near the border with Democratic Republic of Congo.
In January, China’s CNOOC launched the drilling programme for the first production well in the fields which it co-owns with France’s TotalEnergies and Uganda’s national oil company.
According to the central bank, the country’s total public debt stood at about $21 billion in October, slightly less than 50% of the country’s GDP.
(Reporting by Elias Biryabarema; Editing by Hugh Lawson)
