Fitch drops Uganda outlook to negative

Fitch Ratings said it revised the outlook on Uganda to negative from stable and affirmed its long-term foreign-currency issuer default rating at B+.

“The revision of the outlook to negative reflects heightened fiscal and external financing and liquidity pressures, partly related to reduced availability of concessional external financing, tighter domestic and external financing conditions, and large twin budget and current account deficits (CAD). These pressures are evident in declining foreign-exchange reserves, a scheduled increase in debt-service payments, rising government interest costs, a less favorable public debt structure in some respects, and a rising net external debt/GDP ratio,” the agency said in a statement.

Fitch said it forecasts Uganda’s external debt servicing will amount to 2% of GDP in FY23 and FY24, up from 1.5% in FY22.

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