Government is expected to borrow Shs13 trillion both from the external and domestic markets to fund budget and project financing in the 2024/25 financial year.
The Shs13 trillion is at least Shs1.5 trillion higher than the Shs11.5 trillion, which the government would have borrowed by the end of this financial year.
In details contained in the Budget Framework Paper for the 2024/2025 financial year, the Ministry of Finance noted that out of the Shs13 trillion, at least Shs8.9 trillion will be borrowed externally, while Shs4.1 trillion will be sourced domestically.
The amounts are relatively higher from the Shs8.3 trillion and Shs3.2 trillion earmarked to be borrowed from both the external and domestic markets, respectively in the current financial years.
In its Budget Framework Paper, the Ministry of Finance indicated that over the medium term, external debt payments were projected to increase due to an upsurge in commercial loans over the last few years, noting that interest payments will amount to Shs7.6 trillion, which is equivalent to 3.5 percent of gross domestic product.
Of the Shs7.6 trillion, Shs5.6 trillion will go towards domestic debt interest payments, while Shs1.9 trillion will cater for foreign interest payments and commitment fees.
