Financing Fiscal Deficits in Uganda: Options and Strategy

Uganda is in a transitional period in terms of both financing needs and opportunities. Since Fiscal Year 2009/10 net financing requirements have consistently exceeded available net concessional lending – and this trend looks set to continue into the medium term. At the same time an increasing range of alternative, non-concessional financing options have begun to open up, both domestic and external. This expansion of Uganda’s deficit financing policy space brings both opportunities and risks – and presents the authorities with new challenges, to determine the appropriate recourse to and mix between the various financing options. This paper aims to assist the authorities’ consideration of these issues.