Uganda's external debt jumps fourfold in 3 yrs: report

By Elias Biryabarema

KAMPALA (Reuters) - Uganda's external debt has risen nearly fourfold in three years to $4 billion, or 24 percent of gross domestic product, and is expected to rise to 31 percent of GDP by 2015, a government report said on Friday.

Uganda has enjoyed a decade of strong growth fuelled by political stability and liberal reforms and is set to benefit furthere from the discovery of oil in its western region.

The government report showed that Uganda's external debt stood at $1.1 billion in June 2006.

A paper prepared by shadow Finance Minister Oduman Okello and presented to parliament last week denounced what he called the government's "excessive appetite to borrow."

"This unprecedented speed of borrowing will only mortgage the future generation and crush this country ... into another debt overhang," he said in the report.

Keith Muhakanizi, deputy secretary of treasury, dismissed the disquiet, saying Uganda's debt burden as a proportion of total exports and GDP was still within healthy proportions.

"Uganda's economy is having one of the fastest growth rates and our debt carrying capacity has no doubt expanded enormously, so I don't see why anyone would worry," he told Reuters.

He added that almost of Uganda's loans were from multilateral lenders like the World Bank and African Development Bank and carry concessionary terms.