Uganda’s total national debt reached USD 32.33 billion (about UGX 116.21 trillion) at the close of the 2024/25 financial year, up from USD 25.63 billion (UGX 94.72 trillion) at the end of June 2024.
According to the Ministry of Finance, Planning, and Economic Development, the debt stands at 51.3 percent of the country’s GDP and is considered manageable despite concerns raised by Parliament and civil society.
Amid challenges in accessing external loans and rising global interest rates, the government in 2023 opted to increase domestic borrowing to manage indebtedness. This decision drew caution from experts, including the European Investment Bank, which expressed concern that domestic borrowing could crowd out the private sector, limiting their access to capital.
The Ministry noted that external loans were costing as high as 10 percent, compounded by a continued reduction in concessional financing. Consequently, domestic debt rose to USD 16.8 billion (UGX 69.34 trillion), accounting for 51.9 percent of the total debt stock by June 2025, up from 42.9 percent the previous year. Domestic debt mainly comes from Treasury Bills and Bonds issued to the public, with the government offering competitive returns to attract investors.
External debt increased to USD 16.8 billion (UGX 60.34 trillion). Although external debt temporarily decreased from USD 14.91 billion in September 2024 to USD 14.60 billion in December 2024, it remained slightly lower than domestic debt, representing 48.1 percent of total debt at the end of the year. At the launch of the 2026/27 National Budget Strategy, Finance Minister Matia Kasaija emphasized that Uganda’s debt level remains sustainable in the medium term, noting that most borrowing finances development expenditure, particularly infrastructure, rather than consumption.
The Debt Sustainability Report for 2023/24 projected that debt would peak this financial year at 53 percent of GDP before starting to decline, supported by reduced borrowing and anticipated domestic revenue from oil and gas proceeds. Minister Kasaija said the increase in public debt reflects higher external disbursements and expanded domestic borrowing to finance major infrastructure projects.
Julius Mukunda, CEO of the Civil Society Budget Advocacy Group (CSBAG), urged the government to reduce borrowing to avoid sliding into a high-risk debt category. He recommended focusing on agriculture and trade to increase domestic revenue. “As a country, we need to be strategic in debt management, considering restructuring and scheduling with institutions like the World Bank. Uganda is medium-risk, but we must prepare for shocks,” Mukunda said.
He advised prioritizing high-quality agricultural exports to compete globally and generate higher returns for the economy. During a recent parliamentary debate over a government loan request of USD 99.56 million, National Economy Committee Chair John Bosco Ikojo noted that Uganda remains in the moderate-risk category. However, he warned that any economic shock could push the country into high-risk territory.
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