S&P turns Uganda view to negative

S&P said it revised its outlook on Uganda to negative from stable and affirmed the B long-term foreign- and local-currency sovereign credit ratings.

“The Covid-19 pandemic and the Russia-Ukraine war have contributed to slower fiscal consolidation than targeted, despite the IMF's support program for Uganda. The result has been persistent and elevated twin deficits, which pose a risk to the government's creditworthiness.

“We project that debt to GDP will continue rising through 2025, while tighter domestic and external financing conditions put upward pressure on interest expenditure, in turn worsening the outlook for public finances. At the same time, slowing global growth and an Ebola outbreak are hindering a more substantial post-Covid-19 recovery,” the agency said in a press release.

On the positive side, S&P said it forecasts the general government deficit will narrow to 6% of GDP in fiscal 2023 from 7.3% in fiscal 2022.

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