Uganda set to sell $103m debt to fund defence ministry

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Uganda’s Ministry of Finance has announced the country plans to sell $103 million (380 billion shillings) of debt to help fund the Ministry of Defense.

The reason for the funding remains classified, according to a statement released on Uganda’s parliamentary website, but the money is needed immediately and can’t be raised through tax collections or foreign bond sales, the ministry says.

Uganda selling debt to finance defence

With the government planning to sell more than $100 million of debt to help fund the Ministry of Defense, Uganda’s net domestic financing is set to rise to 2.16 trillion shillings from the 1.78 trillion that was approved in the budget, the Ministry of Finance has revealed.

In March, Uganda’s central bank warned the risk of default is increasing with national debt almost trebling over the past three years to more than 50 percent of gross domestic product.

At the time, The Bank of Uganda said almost two-thirds of the country’s borrowing is external although the government’s plan to sell debt for funding defence will increase the country’s internal debt. Internal borrowing poses less of a risk to the economy but refinancing with debt will add further to the country’s deficit, which is becoming an increasing problem for many African nations.

Uganda’s economy has been struggling over the past few years due to poor agricultural output, weak exports and corruption.

Featured image: By Ahandrich – Own work, CC0, https://commons.wikimedia.org/w/index.php?curid=60597417

About Aaron Brooks

Aaron Brooks is a UK journalist who wants to cut out the international agendas in news. Spending his early years in both England and Northern Ireland he saw the difference between reality and media coverage at an early age. After graduating from the University of Chester with a BA in journalism, his travels revealed just how large the gap between news and the real world can be. As Editor-in-Chief at East Africa Monitor, it’s his job to provide a balanced view of what’s going on in the region for English-speaking audiences.