SOGEI website background

Uganda’s Experience with Debt and Economic Growth 'An Empirical Analysis of the Effects of Public Debt on Economic Growth - 1980-2016'

The results have revealed that public debt has a significant negative impact on economic growth in short-run whereas in long-run debt has a mixed impact on Uganda’s economy, which is; Total debt service has a negative impact whereas Gross debt as a share of GDP has a positive impact on the economy. The findings reveal that Public debt has a negative effect on Uganda’s economic growth in the short run. The impact is however found to be positive in the long run. This result is in line with the study expectations and some findings by earlier researchers who found a negative impact of public debt on GDP and investment. The results suggest that the current trend of Uganda’s borrowing is to continue constraining the resources in the short run.