Department of Economics and Energy

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Browsing Department of Economics and Energy by Author "Mande, Sharon"

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    The Determinants of Uganda's Debt Sustainability.
    (2023) Mande, Sharon
    The purpose of the study was to examine the determinants of debt sustainability in Uganda. The study was guided by the objectives which included; to examine the effect of Primary balance on debt sustainability in Uganda, to examine the effect of real effective interest rate on debt sustainability in Uganda, to examine the effect of real GDP on debt sustainability in Uganda, to examine the effect of real exchange rate on debt sustainability in Uganda and to examine the effect of Trade openness on debt sustainability in Uganda. This study used a time series research design. Time series data based multivariate regression analytical procedures was employed to estimate the empirical model. The study used secondary data published by World Bank, IMF and Bank of Uganda for the period 1988 to 2021 based on annual manner that will constitute the unit of observation for the study. This period was considered for the study because of data reliability, and in addition, it covered the shift in time when Uganda went established more development agendas and turbulence times. The data passed all the assumptions of parametric thus making the results unbiased. The findings indicated that primary balance, real effective exchange rate, current account balance and real interest rate were found to have a significant effect with debt sustainability in Uganda in long run. While in short run, all the independent variables had a significant effect on debt sustainability in Uganda. From the findings, the study recommends strategies like maintaining a fiscal surplus, managing interest rates, fostering economic growth, prudent foreign exchange management, and achieving current account surpluses. Prioritizing fiscal prudence involves controlling expenditures and boosting revenue. Monitoring and stabilizing interest rates prevent high borrowing costs. While GDP growth may not directly impact debt-to-GDP ratios, it aids development via business improvement and investment. To mitigate exchange rate impact, manage foreign exchange wisely and reduce reliance on foreign-currency debt. Encouraging export-led growth, domestic industries, and competitiveness ensures sustainable trade balances and debt levels.