May 6, 2020 / 6:13 AM / 24 days ago

Uganda calls on creditors to cancel Africa's debts as coronavirus wrecks economies

KAMPALA, May 6 (Reuters) - Uganda’s President Yoweri Museveni has called on international creditors to cancel all of Africa’s debts to ease the economic distress caused by the outbreak of the novel coronavirus.

“The external friends, if they are friends at all, should cancel all the multi-lateral and bilateral loans because this problem (coronavirus) has been created for Africa by Asia,” Museveni said in a speech seen by Reuters on Wednesday.

He did not mention any particular country by name, though Uganda’s debt has been growing largely as a result of loans from China to finance infrastructure projects.

Museveni delivered the speech on the economic impact of the coronavirus, that first emerged in China late last year, at a conference jointly hosted by a Ugandan private sector association and the United Nations.

As of Wednesday Uganda had recorded 98 cases of COVID-19 and no deaths.

Debt cancellation would allow African countries to conserve the resources they normally devote to loan repayment, Museveni said.

In recent years Uganda has accumulated one of sub-Saharan Africa’s largest debt loads, raising concerns at both the country’s central bank and the International Monetary Fund (IMF) about its ability to repay.

Uganda’s debt stands at an estimated 49.8 trillion Ugandan shillings ($13.11 billion), according to a Bank of Uganda (BoU) report released last month.

In the financial year to June, 20% of all Uganda’s public revenues were allocated to repayments of public debt, a level that has doubled over the last ten years, according to BoU data.

Uganda’s public debt is projected to jump to 46% of GDP in the financial year beginning in July, from 43% in the previous year, according to the BoU report. ($1 = 3,800.0000 Ugandan shillings) (Reporting by Elias Biryabarema, Editing by Ayenat Mersie & Simon Cameron-Moore)

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