While Uganda's Debt Sustainability Analysis (MoFPED, Oct 2012) indicated that the country is not suffering any debt stress, Government has since signed commitments of an additional US$2.8bn (about Shs 7trillion) of external public debt, equivalent to 13.2% of GDP according to the Governor Bank of Uganda in the New vision dated Monday October 7th 2013, pg 28 .
In March 2013, external debt stood at US$5.8bn up from US$5.7bn by March 2012. This borrowing appetite increases by the day which is worrying. We need to make a forward step in reducing dependence on borrowing since it is not the only alternative for economic growth, transformation and development.
In 1996, Uganda Debt Network was formed to campaign for Uganda's debt relief under the Heavily Indebted Poor Countries (HIPC) Initiatives of the World Bank and the International Monetary Fund.
As a result, debt stressed Uganda was the first country to qualify for debt relief from the multilateral organizations under the original HIPC Initiative in 1998 (estimated at US$650 million in nominal terms) and the Enhanced HIPC Initiative in 2000 (approximately US$1300 million), a total of US$ 1950 million.
Although the International Agency Fitch records a B+ credit rating for Uganda signifying a low cost of borrowing with decreasing risk of default, the loan amortization has registered negative performance (i.e. making insufficient loan payments on both interest and principle of loan) for several years now.