Uganda’s debt stock on the rise

Uganda is taking center stage in Africa's economic landscape as its public debt rises to US$25.6 billion, largely driven by increased domestic borrowing. This debt surge, reported in June 2024, signals a growing economic activity in the country. CNBC Africa's recent interview with Carol Nampurira, Corporate Sales Manager, Energy and Infrastructure at Stanbic Bank Uganda, shed light on the market movements in East Africa and the factors shaping them. Nampurira highlighted the resilience of East African currencies like the Kenyan shilling, which has stabilized due to various factors, including diaspora flows and increased tourism and agricultural exports. She mentioned that Kenya remains an attractive destination for offshore investors seeking higher yields. Additionally, she discussed Uganda's stable currency supported by commodity and remittance flows. Nampurira also delved into Tanzania's market dynamics, emphasizing the central bank's efforts to regulate bid spread offers in the market. Looking ahead, Uganda's monetary policy committee meeting is expected to announce a rate cut to stimulate economic growth amidst positive GDP performance and low inflation rates. Moreover, Uganda's mineral wealth, particularly its oil reserves, is set to transform the country's economic landscape significantly. With the peak oil production expected by 2025, Uganda anticipates revenue flows of $17 to $20 billion, which will contribute to GDP growth and address energy challenges. The completion of the export pipeline, shared with Tanzania, is a crucial milestone in this journey. This development also signals a shift in trade dynamics within East Africa, with Uganda poised to be a key regional energy supplier, reducing its reliance on petroleum imports from neighboring countries like Kenya. The emerging trade ties with Tanzania are likely to reshape the energy landscape in the region, positioning Uganda as a major player in meeting the region's energy demands. Overall, Uganda's evolving economic prospects and strategic investments are set to reshape the economic landscape of East Africa, offering growth opportunities for the region.