The Burden of debt service payments under structural adjustment: the case of Uganda.

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University of Dar es Salaam
Like many other countries in Sub-Saharan Africa, Uganda is a severely indebted low income country. The country is facing an acute debt servicing obligation and the fact that a large proportion of Uganda's debt is not eligible for rescheduling is discouraging. Of great concern is whether the economy can sustain a rapid growth and at the same time maintain adequate domestic investments, given the heavy reliance on foreign capital inflows. It is in this context that this study attempts to provide a better understanding of Uganda's debt problem and to explore empirically the extent to which debt servicing impacts on the economy. The study is motivated by the burden of debt servicing under structural adjustment. This study adopts a growth-cum model to analyze the above effect. It employs OLS technique to estimate the model. The results indicate that debt servicing is one factor that constrains rapid growth and suggest a strong negative relationship between economic growth and debt servicing. Shrinking foreign resources combined with a poor domestic resource base produce both direct and indirect effects on real growth. External debt represents a major constraint to Uganda's economic performance. The current debt situation requires that Uganda undertake steps to increase its ability to service foreign debt by vigorously pursuing export expansion. The need to continue the ongoing restructuring of the economy and promote further growth is apparent.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HJ8826.T34G94)
External debts, Structural Adjustment Programme, Uganda
Guloba, A. (2000). The Burden of debt service payments under structural adjustment: the case of Uganda. Master dissertation, University of Dar es Salaam.