There has not been a single country where the newly-appeared coronavirus has not left its devastating trace. From the economic lockdown until the loss of jobs the coronavirus was damaging for every citizen of the world.
Africa also suffered greatly and it is one of the main reasons why Uganda’s public debt surged so greatly. Uganda’s total public debt rose by 20.5% in recent months according to the central bank and all these were caused because of the coronavirus pandemic.
The Ministry of Finance, Planning and Economic Development of Uganda clarified that the debt to external creditors rose to 40.8% of GDP.
According to Ajera, based on a recent 2019 Debt Sustainability Analysis (DSA) report, nominal total government debt is projected to rise to 40.9% of GDP in fiscal 2019/20 and then reach 49.5% in the 2023/24 financial year.
However, Uganda is at a low risk of debt-related problems, and public debt is considered sustainable over the medium to long term.
It should be noted that a rise in debt will definitely cause inflation in the long term and Forex trading companies in Uganda predict massive drops in the local economy and depreciation of the Shilling. This will, of course, devastate the already battered Ugandan citizens.
How is the COVID situation in Uganda?
7/218 cases of coronavirus infection have been identified in Uganda as of September 25, according to Worldometers, which is officially publishing the statistics.
Over the past day, 185 cases out of 2,414 tests conducted per day have been confirmed, the total number of tests reached over 200,000.
A total of 3,611 people (Ugandans and foreigners) have been cured of COVID-19 in Uganda. So far, there have been 71 deaths of this disease in the country.
How will the surge in debt affect Uganda?
It is not a piece of good news for any country when the public debt in raising especially when we are talking about African countries which are still in the developing phase. Even though we have seen huge progress from Uganda, where the number of people involved in financial jobs is rising still it is very far from the ideal condition.
We should also note that because of the pandemic Uganda locked down almost all businesses, prohibited vehicle movement, and public gatherings as part of its sweeping anti-coronavirus lockdown. This in turn had a negative impact on the country’s economy.