Kampala: The Ugandan government has announced a drastic reduction in external borrowing, aiming to cut it by 98% in response to the country's escalating public debt. This decision, unveiled by the Finance Ministry, is part of broader efforts to manage the financial strain resulting from rising debt levels. According to Anadolu Agency, the Finance Ministry has also declared significant cutbacks in government expenditure and domestic borrowing for the fiscal year 2025-26. The overall government spending is set to decrease by more than 20%, with a 54% reduction in domestic borrowing through Treasury bonds planned for the upcoming financial year. These measures are intended to ease the debt burden and avert a potential crisis. The urgency of these actions is underscored by the rise in Uganda's public debt, which climbed to $25.6 billion in June, up from $23.7 billion the previous year, as reported by ministry data. This mounting debt now represents 52% of the nation's GDP, sparking concerns over a looming debt crisis if corrective steps are not taken promptly. While government officials assert that past borrowing has contributed to economic growth, the increased debt levels have led to credit rating downgrades. Ramathan Ggoobi, the permanent secretary of the Ministry of Finance and also the Treasury secretary, emphasized Uganda's resilience in facing economic challenges, such as high inflation and interest rates. He assured that fiscal and monetary authorities are diligently working to mitigate any adverse effects of the debt on the economy. Ggoobi highlighted the country's economic growth, stating, "The size of the economy has expanded to about $53 billion, and foreign direct investments have grown impressively because of good economic management. Among our priorities is to ensure that the huge public debt doesn't affect economic growth." He further mentioned that fiscal consolidation efforts are underway, with a focus on sustaining debt without hindering economic progress. The World Bank's International Debt R eport has recently warned that record debt levels, coupled with high interest rates, are pushing many nations toward a financial crisis. The report emphasized the difficult choices developing countries face between servicing debts and investing in critical sectors like public health, education, and infrastructure.