Uganda’s debt sustainability: Is it a cause of concern?

Abstract

This article analyses the debt sustainability exercise undertaken by Uganda in determining whether it provides solutions to Ugandan authorities in the management analysis, it does not seem to guide public debt management; instead, it is used to justify additional public borrowing by use of established public debt thresholds. If Uganda was to use the debt sustainability tool for public debt management, the challenges the country associated risks; poor costing of projects; slow economic growth; low domestic revenue performance in the projection period could be overstated, as the Debt Sustainability Analysis (DSA) tool does not take into account policy/programme implementation; although public institutional strength is taken into account by use of the Country Policy and Institutional Assessment (CPIA) rating. Therefore, the more general lesson from the DSA results is that new borrowing even on concessional terms should be pursued with caution, based on prudent economic projections and in recognition of the country