Uganda Debt Network (UDN), a civil society organisation, has embarked on a drive to have Uganda’s public debt cancelled by the various donors.
This follows a World Bank and G-20 gesture to suspend the repayment of interest on loans for six months.
According to figures from the ministry of Finance, Planning and Economic Development, Uganda’s external debt stock increased by 14 percent from $7.66 billion as of December 31, 2018 to $8.75 billion as of December 31, 2019.
Domestic debt stock increased by 21 percent from $3.86 billion to $4.74 billion for the same period.
According to UDN, the huge repayment burden could prove unbearable as the economy struggles to recover from the COVID-19 pandemic.
Julius Kapwepwe,the director programmes at UDN said writing off the debt Uganda owes foreign countries will enable the East African nation to focus on recovering its economy, which has been heavily hit by the Covid-19 pandemic.
He noted that the country has over the years borrowed billions of dollars from economic giants like China, Germany, and U.K. and organisations like the African Development Bank, World Bank and Islamic Development Bank to help with the financing of projects in different sectors.
But repaying these loans is becoming a challenge due to the fact that some of these funds have been misused and the country is also recovering from recent calamities like desert locusts, Covid-19, floods, etc.
Speaking to the media in Ntinda, Kampala at the weekend, Kapwepwe said Low-Income Countries(LICs) of which Uganda is among, are facing a myriad of challenges in the social protection strategies and economic outlook due to the downturn from Covid-19.
He recommended that all debts lent to low income countries be canceled and that these countries be given a 10-year action of no-interest on new debts.
“The two-fold approaches would consign the LICs into more public expenditure investments tagged to protecting the rights and social protection of the citizens, economic recovery, improved healthcare and others,” he said.
Between January and August 2020, Uganda acquired about 16 loans to counter the effects of the pandemic and for other interventions in the economy and those loans exclude the grants and supplementary budgets at end of Financial Year 2019/20.