Uganda budget deficit could to narrow to 6 percent in 2019/20

By George Mangula

Uganda’s budget deficit may narrow to six percent of gross domestic product (GDP) in the financial year 2019-20, as the country winds up investments in two big hydropower projects, the Ministry of Finance, Planning and Economic Development has said.

The financing gap in the 12 months through June 2020 may drop from 6.6 per cent of GDP this fiscal year as the government completes the 600MW Karuma and 183MW Isimba hydropower dams, according to the latest National Budget Framework Paper.

The fiscal shortfall is expected to gradually narrow to 2.6 per cent of GDP in financial year 2023/24 on the phased reduction in big public investment projects, according to the pre-budget document.

Uganda sees resources in the coming fiscal year rising to Shs34.3 trillion (US$9.2 billion) from Shs32.7 trillion (US$8.78 billion) in 2018-19, according to the document.

The Government will allocate Ush2.9 trillion (US$778.9 million) for interest payments in the next fiscal year, of which Shs402.4 billion (US$107.9 million) will be for external loans, the ministry said.