We are delighted to announce the release of Agusto & Co.’s 2022 Sovereign Rating Report on the Republic of Uganda.
In this report, Agusto & Co. assigned a “B” rating with a stable outlook to the Republic of Uganda.
Below are excerpts from the 2022 Uganda Sovereign Rating Report:
“Agusto & Co. estimates a 5% growth in Uganda’s real Gross Domestic Product in FY’2022 with a gradual uptick in the next two fiscal years, premised on the potential increase in aggregate domestic demand as the economy fully reopens. The Ugandan economy has seen the full resumption of educational activities and an increase in travel and tourism in 2022 and we expect this to bolster services sector growth in addition to the potential rise in construction and mining activities to drive near-term industrial growth, particularly with the recent oil and gas and other industrial developmental projects spearheaded by the Government of Uganda.”
“We expect steady growth in Uganda’s tax revenue in the near term, premised on the anticipated increase in consumption and business activities following the reopening of the economy. We estimate an uptick in tax revenue to GDP ratio to 13% in FY2022 (2021: 12%) and this is expected to reach approximately 15% over the medium term. This growth expectation is however hinged on the absence of further shocks that may stall economic activities and the successful operation of Uganda’s tax revenue mobilization initiatives to minimise income leakages.”
“With the anticipated increase in government spending in line with the post-COVID-19 economic recovery needs, we expect Uganda’s fiscal deficit to widen in the near term with an estimated budget deficit to GDP ratio of 10% in FY’2022. Although we anticipate a significant rise in public debt stock to bridge the financing gap and an uptick in debt service burden, we expect the overall debt levels to remain sustainable over the near to medium term given Uganda’s relatively low debt metrics when compared to its peers, its adequate foreign exchange reserves, the concessional rates it enjoys from bilateral and multilateral creditors and the strong financial support from the IMF and the World Bank”