IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Restructuring Uganda's debt : the commercial debt buy - back operation

  • Kapoor, Kapil
Registered author(s):

    Uganda's commercial debt buy-back operation was financed by the International Development Association's Debt Reduction Facility (IDA Facility), with cofinancing from the governments of Germany, the Netherlands, and Switzerland and the European Union. Commercial debt service is a serious burden to many low-income economies. Yet, although the IDA Facility has existed since 1989, only a handful of countries have been able to avail themselves of its resources. That is not altogether surprising: commercial debt buy-backs can be extremely complex, requiring substantial preparation for a well-articulated external debt strategy based on comprehensive data. One objective in describing Uganda's operation is to discuss the requirements of the IDA Facility and to shed light on how Uganda satisfied them and on which areas needed special attention. Uganda's offer to buy back its uninsured commercial debt at a discout of 88 percent of facevalue was extremely successful. Of the total eligible debt of US $188 million, Uganda bought back debt worth US $153 million, reflecting a participation rate by creditors of 80 percent. As a result, most of Uganda's commercial debt has been eliminated. The remaining commercial obligations accrue to creditors that either have work in progress or that hold some form of security or collateral for their claims. Uganda's debt problems are far from resolved. Much of the country's Paris Club debt is ineligible for rescheduling because it was contracted after the cutoff date. Arrears owed to non-OECD bilateral creditors have continued to mount, as these creditors have resisted restructuring Uganda's obligations to them. And servicing that part of multilateral debt that is nonconcessional or less concessional also is a burden. Resolving Uganda's external debt problem will require concerted action on several fronts: 1) continued economic reform; 2) vigorous pursuit of export diversification and growth; and 3) no letup in seeking creative ways to restructure the debt portfolio. Uganda must find grant funding wherever possible, or contract only the most concessional debt.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1409.

    in new window

    Date of creation: 31 Jan 1995
    Date of revision:
    Handle: RePEc:wbk:wbrwps:1409
    Contact details of provider: Postal: 1818 H Street, N.W., Washington, DC 20433
    Phone: (202) 477-1234
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1409. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.