Uganda's public debt rises 15% on surge in domestic issuance

KAMPALA, Sept 24 (Reuters) - Uganda's total public debt rose by 14.8% in the 12 months to June this year from the corresponding previous period as the government ramped up domestic debt issuance to fund a budget deficit, the finance ministry said.

The East African country's total public debt stock surged to $37.1 billion in June, up from $32.3 billion in the corresponding month last year, the ministry ⁠said in a report provided to Reuters on Thursday.

As a share of GDP, the debt load rose to 54.3%, up from 51.3% in the same period, while external debt accounts for 43.9%.

The increase in indebtedness stemmed mostly from higher domestic debt issuance to fund the budget deficit in the financial year that ended in June, the ministry said in ⁠its report.

The period saw increased domestic Treasury bond issuance, underscoring the government's new strategy of prioritising long-term borrowing to finance development needs, it added.

"This strategy helps reduce refinancing and rollover risks," the ⁠ministry said.

Last year the government introduced the 25-year Treasury bond, with the longest tenure of its domestic debt offerings, to help lengthen ⁠the maturity of the debt portfolio.

The central bank has previously expressed concern over the rising debt. In August, ratings ⁠agency Fitch said Uganda's rating, affirmed at "B" with a stable outlook, was constrained by rising public debt and a high interest burden.

Reporting by Elias Biryabarema; Editing by Clarence Fernandez

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