Uganda’s Parliament approved loans worth UShs5.619Trn in the period between January and May 2025 amidst concerns of the increasing Public Debt recorded at UShs106.22Trn as at December 2024. There’s also UShs16.402Trn in undisbursed loans that are attracting interest payment.
These details were extracted from the Hansard, the Official Report of the Proceedings of Parliament of Uganda, which prompted various experts to raise concerns over the oversight Parliament is carrying out before approving the loans, given the delays in execution of various public projects.
The Ministry of Finance recently informed Parliament’s Budget Committee that between 2013 to 2024, Government borrowed US$11.855 Trillion (UShs43.252Trn), but of this amount, US$7,358,600,000 (UShs26.847Trn) has been disbursed while US$4,496,510,000 (UShs16.405Trn) remains undisbursed.
Timothy Chemonges, the Executive Director at Centre for Policy Analysis (CEPA), says the trend by Parliament to continue approving loans amid the increasing interest charged on undisbursed loans shows a dangerous disconnect between borrowing and development.
“Parliament has increasingly become a rubber stamp, approving loans without demanding concrete implementation plans or reviewing past performance. The Auditor General’s findings are routinely ignored, and accounting officers face no consequences for failing to utilize funds,” Chemonges says in an interview, adding: “Meanwhile, interest on idle loans continues to drain the public purse. We are accumulating debt without results. For Parliament to fulfil its constitutional role, it must move beyond approval and take responsibility for enforcing accountability, demanding absorption capacity assessments, and following up on project execution.”
Dr. Amos Sanday, a Research Fellow at the Economic Policy Research Centre (EPRC), is concerned about the nature of oversight Parliament is carrying out before approving loans.
Although he blames the delayed completion of loan funded projects on Government’s limited preparedness before borrowing of funds is initiated., he says Parliament has also not done enough in carrying out its oversight mandate.
“They (MPs) are doing oversight but not enough. Ideally, you cannot disburse if you are doing enough oversight. Now, given the current public investment management laws that the same Parliament passed, they are very much aware that for you to even borrow, you must be cleared for any project up to the borrowing stage. So, Parliament is partly to blame, and the people in charge of the project at the Ministry of Finance are the people to blame for what is going on partly,” noted Dr. Sanday.
Jane Nalunga, Executive Director, Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) – Uganda, notes that the decision by Parliament to continue approving loans despite low absorption could signal weak oversight in the sense that all these loans either come through the budget or supplementary schedules which are approved by Parliament.
“This highlights a loophole of failure to access information on whether public debt is being acquired for ready projects – in a sense that they have gone through the public investment management system- it is the role of Parliament to scrutinize the readiness of these projects before the loans are acquired. This is largely due to acquisition of debt for projects that aren’t ready to kick off…It is imperative for Parliament to ensure that they pass loans for only ready projects as guided by the public investment management policy,” says Nalunga.
Inside the Approved Loans in 2025
The first loan was approved on 9th January 2025, where Government borrowed US$106Million (UShs381.588Bn) from the Islamic Development Bank and US$25Million (UShs89.994Bn) from the Abu Dhabi Fund for the development of the upgrading of the 98 kilometres Kumi-Ngora-Serere-Kagwara Road, thus bringing the total loans borrowed on Parliament’s first sitting in 2025 to UShs471.582Bn.
Parliament also approved Government’s request to borrow Euro270Million (UShs1.115Trn) from African Export-Import Bank, and up to Euro230Million (UShs950.055Bn) from Ecobank Uganda Limited and Development Bank of Southern Africa Limited to finance the budget for Financial Year 2024/2025, thus bringing the total loans amount borrowed that day to UShs2.065Trn.
Parliament further approved the borrowing of US$15.222Million (UShs54.799Bn) from the African Development Bank, and US$73.15Million (UShs263.297Bn) from the African Development Fund, as additional funding, for the construction of Laropi-MoyoAfoji and Katuna-Muko-Kamuganguzi road project, thus totaling to UShs318.096Bn.
Another loan approved was the Euro45Million (UShs185.966Bn) from the French Development Agency for National Water and Sewerage Corporation intended to resolve the water and sanitation challenges in Greater Kampala Metropolitan Area.
Although this loan received overwhelming support in Parliament, Robert Migadde (Buvuma Island), who is also Vice Chairperson, Committee on National Economy, raised concerns over the cost of water per unit that is currently at UShs5,000 at the level of domestic consumption.
“It was also noted that whereas National Water and Sewerage Corporation charges UShs25 per 20 litre jerrycan for community/kiosks, some vendors charge the end user up to UShs200 thus, further making water unaffordable for the ordinary person, limiting consumption, which in turn affects revenues of the agency. Water tariffs should be reduced so that it can be easily made affordable by all, regardless of socio-economic categories,” Migadde argued.
Parliament also approved the borrowing of Euros 40Million (UShs165.233Bn) as additional funding for an earlier loan passed for Government to borrow up to US$518Million and receive a grant of US$48Million) from World Bank Group, and borrow up to Euro40Million from AFD to finance the construction of roads around the Greater Kampala Metropolitan Area.
Despite the Leader of Opposition, Joel Ssenyonyi backing the loan, he called on Government to intensify oversight over this project noting, “I am a Member of Parliament from Kampala, which should excite me, but I would be more interested in seeing the Government having its hands on these projects. We have a lot of project delays. Yes, we can get excited; we are getting this money to construct these roads. However, regarding the scope, timeliness, and cost of these roads, I am hoping that we can have a good appraisal at the end of the day and that we shall be ticking all those boxes as a caution.”
Parliament also approved Government’s proposal to borrow Euros162,462,445.694 (UShs670.586Bn) as insurance premium of 7.06 percent on an earlier loan borrowed to finance the development of industrial parks from the Export Import Bank of China.
On 5th March 2025, Parliament approved the proposal by the Government to borrow up to US$18.09Million (UShs65.119Bn) as additional financing from the African Development Fund, to finance the expansion of the Uganda Cancer Institute.
In the same month on 20th March 2025, Parliament authorised Government to borrow up to US$100Million (UShs359.991Bn) from the Arab Bank for Economic Development in Africa (BADEA) private window, US$50Million (UGX179.974Bn) from Arab Bank for Economic Development in Africa (BADEA) public window, and US$25Million (UShs89.984Bn) from OPEC Fund for International Development (OFID), to capitalise Uganda Development Bank (UDB) thus totaling to UShs629.950Bn.
Parliament also approved the proposal for Government to guarantee Uganda Development Bank Limited to borrow up to US$40Million (UShs144.033Bn) from the Islamic Development Bank (IDB), US$30Million (UShs108.017Bn) from the Islamic Corporation for Development of the Private Sector, and US$30Million (UShs108.017Bn) from the International Islamic Trade Finance Corporation thus bringing total guarantee to UShs360.067Bn.