Uganda Budget Gap Expected to Narrow to 6%

(Bloomberg) -- Uganda’s budget deficit may narrow to 6 percent of gross domestic product in 2019-20 as the country concludes investments in two big hydropower projects, the finance ministry said.

The financing gap in the 12 months through June 2020 may drop from 6.6 percent of GDP this fiscal year as the government completes the 600-megawatt Karuma and 183-megawatt Isimba plants, according to the National Budget Framework Paper on the ministry’s website.

The fiscal shortfall in East Africa’s third-biggest economy is expected to gradually narrow to 2.6 percent of GDP in 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 34.3 trillion shillings ($9.27 billion) from 32.7 trillion shillings in 2018-19, according to the document. Africa’s biggest coffee exporter will allocate 2.9 trillion shillings for interest payments in the next fiscal year, of which 402.4 billion shillings will be for external loans, the ministry said.

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Helen Nyambura, Jacqueline Mackenzie

©2019 Bloomberg L.P.