Government paid Shs1.34 trillion ($360.8m) to service undisbursed public debt for the six months to December 2022, the Public Debt, Grants, Guarantees and other Financial Liabilities report for 2022/23, indicates.
The Finance Ministry report, released a month to the end of the 2022/23 financial year, indicates that Shs17.9 trillion ($4.81b) worth of public debt remained undisbursed, for which, government paid commitment, upfront and management fees, amounting to Shs1.34 trillion ($360.8m).
However, the report does not indicate why the loans remained undisbursed. Experts say such delays are due to low absorption capacity by user entities, which sometimes fail to implement projects within agreed timelines.
No status of the affected loans was provided, but the report indicated that the Shs17.9 trillion ($4.81b) was a 13.3 percent drop from Shs20.5 trillion ($5.55b) in the same period last year.
The drop, the report noted, was due to increased disbursements following re-opening of the economy, which allowed a pickup in project implementation and enhanced field visits and portfolio reviews by the Ministry of Finance.
Multilateral lenders, among them International Development Association (IDA), the World Bank lending arm, International Monetary Fund and African Development Bank, held the largest stock of Shs5.01 trillion ($1.34b) , of which 29 percent was held by IDA, while IMF and AfDB held 16 percent and 14 percent, respectively.
At least 10 percent or Shs1.73 trillion ($465.4m) was held by the Islamic Development Bank (IDB), while another 10 percent was held by China and related financial institution, of which Exim held the largest stock of Shs1.5 trillion ($403.4m).
Other lenders included Exim Bank of India, Exim Bank of South Korea and Jica, which, together held a combined sum of Shs905.3b ($242.5m)
The report also indicates that commercial lenders held a large chunk of undisbursed debt at a combined sum of Shs675.4b ($180.9m).
Standard Chartered Bank held the largest amount with a stock of Shs582.3b ($156m), the report indicates.
Others include Bank Austria and CommerzBank, which held a stock of Shs17.3b ($4.6m) and 74.7b ($20m), respectively.
During the period, the report noted, government paid Shs1.34 trillion ($360.8m) to service undisbursed debt, with IDB, which was paid Shs22.9b ($6.15m) being the largest beneficiary under multilateral lenders, while Exim Bank of China received Shs3.6b ($973,639), the largest under bilateral lenders.
Bank Austria and CommerzBank, which were paid Shs157.5m ($42,199) and Shs354.3m ($94,920), respectively, were the biggest beneficiaries among commercial lenders.
