Bank of Uganda(BoU) has said that it only borrowed government Shs2.1Tn not Shs11Tn as reported in the media.
In the September 17 article run by the Daily Monitor titled “Govt fails to pay Shs11t BoU debt.”, the newspaper reported that the government has excessively borrowed from the BOU to the extent of failing to pay it back.
BoU in a press statement on Tuesday said that it’s mandated under Section 4 of the Bank of Uganda Act, 2000 to perform the functions of Banker to Government and Agent of Government in financial matters.
“As a Banker to Government, BoU can grant advances to Government in accordance with the Bank of Uganda Act, 2000 and the Public Finance Management Act, 2015 (as amended). In line with these laws,” reads part of the statement
Government, BoU said obtained an advance of Shs2.1 trillion in FY 2020/21, which was subsequently repaid in full.
“Since then, no such borrowing has taken place,” it added
“Therefore, Government has not borrowed Shs8 trillion and there is no such outstanding loan to BoU as purported in the article,”
As an Agent of Government in financial matters, BoU said it manages the issuance and redemption of domestic debt securities on the government’s behalf.
“This entails prompt repayment of matured government securities to investors,”
“The current outstanding amounts from Government to Bo relate to reimbursable attributed to this role.
According to BoU, as of June 30, 2021, the outstanding reimbursable to BoU stood at Shs3.033 trillion. During the FY2021/22.
“BoU made repayments of matured securities to investors worth Shs11.940 trillion and received reimbursements from Government worth Shs11.602 trillion,” the statement says.
“Therefore, the government’s outstanding reimbursable to BoU as of 30 June 2022 stood at Shs3.371 trillion.
In the current financial year (FY 2022/23), BoU said in the statement that it has made further repayments of matured securities worth Shs2.510 trillion and received reimbursements from the government worth Shs1.871 trillion; resulting in an outstanding reimbursable of Shs4.010 trillion as at 15 September 2022.
“Detailed plans for Government to fully reimburse BoU, on account of this role, are in place,” they said
