Finance Officials before Parliament.
The Ministry of Finance has revealed that within 11 years, Uganda has borrowed over Shs 43.252 trillion and further admitted to being stuck with loans worth Shs 16.405 trillion that remain undisbursed.
The details are contained in the 2025/26 National Budget Framework Paper, where the ministry also raised concern over the Shs 12.72 trillion to be spent in servicing debt, which will be obtained from the Shs 31.98 trillion in taxes to be collected in 2024/25.
“Although public debt remains sustainable, the country is spending about one-third of its total domestic revenues towards servicing debt, which was equivalent to Shs8.76 trillion in FY 2023/24. Debt service is projected to rise to Shs12.72 trillion out of total domestic revenue of Shs31.98 trillion this financial year. This reinforces the need to increase domestic revenue mobilization, target public expenditure to areas that have high economic and social returns, and practice prudent debt management,” read in part the document.
However, despite the huge chunk of idle loans lying with the government and accumulating interest, the government has defended its huge appetite for loans by some of the achievements arising from government external borrowing since 2013, citing the increment of the share of the paved national road network that it claims has nearly doubled from 15% (3,121 km) in FY 2012/13 to 29% (6,133 km) in FY 2022/23.
The government also cited the construction of a second international airport (Kabelega International Airport) and the Entebbe International Airport expansion as part of the achievements from the borrowing and further boosted about the meter gauge railway that is undergoing rehabilitation (Malaba-Kampala and Tororo-Gulu).
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