KAMPALA, June 11 (Xinhua) -- Uganda is negotiating with bilateral creditors for debt relief after the COVID-19 pandemic affected its economic growth, a top official said here on Thursday.
Matia Kasaija, minister of finance, while presenting the budget estimates for 2020/21 financial year, which starts on July 1, said the move will free resources to finance interventions in the fight against the pandemic."
Kasaija said to ensure that public debt remains sustainable, government will implement the Domestic Revenue Mobilization Strategy to increase the capacity to finance programs with less reliance on domestic and external borrowing.
Ministry of finance figures show that total debt stock as of December 2019 was 13.3 billion U.S. dollars. External debt was 8.59 billion dollars while domestic debt was 4.74 billion dollars.
The world's 20 largest economies widely referred to as G20 on April 15 in Washington DC agreed to temporally freeze bilateral loan repayment for low-income countries.
The International Monetary Fund resident representative in Uganda Clara Mira told Xinhua in a recent interview that the Ugandan authorities have expressed interest in benefiting from the G-20 Debt Service Suspension Initiative, which would help them deal with the impact of the COVID-19 pandemic.
"The G20 and Paris Club have approved an initiative for official bilateral debt payment suspension; the initiative, called the G20 Debt Service Suspension Initiative, includes a temporary suspension of the debt service payments due to them from May to December 2020 from low-income countries," Mira said.
"This would include the delay in repayments of both interest and principal due to these official creditors over 8 months. Repayment will be later done over three years, following a one-year grace period. The suspension is net present value-neutral, which means that it does not imply any reduction in the total debt payments," she added. Enditem
