Do HIPC debt Initiatives really achieve the debt sustainability objective? Uganda’s experience
Source: Economic Policy Research Centre
The paper begins by examining why debt is a problem, and presents several reasons against over borrowing. Next, the paper investigates the status of Uganda’s external stock of debt including the current stock and disaggregation of debt by creditor category. The different strategies undertaken by the country to reduce its burden of debt servicing are addressed. These strategies include negotiations with the Paris Club, a debt buy-back plan and restructuring of unsecured commercial debt, debt conversion, multilateral debt fund and HIPC Debt relief initiatives. Finally, the paper analyses the sustainability of Uganda’s debt. The paper concludes that debt relief itself doesn’t necessarily bring about long-term debt sustainability. Sound policy and institutional frameworks, adequate debt management capacity and a diversified export base are also required.
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