East African countries have borrowed nearly $2.3 billion new loans in less than three months since reporting the first Covid-19 positive case, adding to the region’s mounting debts at a time of shrinking tax revenue.
President John Magufuli has called for cancellation of Tanzania’s foreign debts, but Dar es Salaam together with Burundi and South Sudan is yet to announce any new loans during this period.
Rwanda has borrowed $109.4 million from the IMF to smoothen foreign exchange pressures, $14.25 million from the International Development Association (IDA) for its Covid-19 emergency response kitty and $100 million from the World Bank for budget support.
The Bank of Uganda (BoU) says there’s a risk of the country sliding into debt repayment crisis due to mounting expenditure pressures linked to the Covid-19 pandemic against the backdrop of a weakening economy and falling revenue collections.
EA governments were already running record high debt levels before the Covid-19 outbreak, with Kenya’s total debt soaring above the Ksh6 trillion ($60 billion) mark (over 60 per cent of GDP) while Uganda’s provisional total public debt stock as at January 31 2020 stood at Ush49.75 trillion ($13 billion), which is about 36.5 per cent of GDP.
