Uganda’s foreign exchange reserves climbed sharply by 69.7% year-on-year to $5.6 billion in January, up from $3.3 billion the previous year. According to a Bank of Uganda report, the surge was largely driven by aggressive foreign direct investment into the burgeoning oil sector. Major energy firms, including France’s Total and China’s CNOOC, have increased spending on infrastructure such as pipelines and drilling in anticipation of Uganda’s commercial crude production launch this year. However, the report also carried a sobering counterpoint: public debt ballooned 21.2% to approximately $34.77 billion over the same period, with rising debt servicing costs reducing fiscal flexibility. Officials warn that any adverse economic shock could push Uganda toward debt distress, raising questions about whether oil revenues will arrive in time to offset mounting financial pressures on the government.
CNBC Africa
