Uganda’s public debt has reached Shs116.2 trillion (US$32.3 billion) as of June 2025, accounting for 51.3% of the country’s Gross Domestic Product (GDP), according to the Ministry of Finance. This marks a significant increase from Shs94.7 trillion in the previous year, with domestic debt rising to Shs60.3 trillion and external debt at Shs55.9 trillion. While government borrowing has funded infrastructure projects such as roads, dams, and energy initiatives, concerns persist about whether these investments generate sufficient economic returns to justify the debt burden. The Ministry emphasized that borrowing remains essential for development but stressed the need for projects that create measurable value, warning that poorly managed initiatives risk leaving future generations with unsustainable financial obligations.
The Ministry of Finance highlighted that interest payments on public debt consumed 26.2% of domestic revenue in the 2024/25 financial year, with projections indicating this could rise to 30.2% by FY2026/27. This growing repayment burden is exacerbated by increased reliance on domestic borrowing, which now exceeds external debt. The June 2025 debt bulletin attributed this shift to greater use of Treasury bonds and bills to meet financing needs, diverting funds from critical sectors like healthcare, education, and agriculture. Analysts warn that underfunded public services and delayed projects reflect the fiscal strain of prioritizing debt servicing over social and economic development.
Critics argue that Uganda’s debt trajectory demands stronger oversight and accountability mechanisms. The Ministry of Finance has identified domestic revenue mobilization as a key strategy for ensuring debt sustainability, urging the government to prioritize projects with clear economic returns. Civil society and parliamentary oversight bodies are also called upon to ensure transparency in borrowing processes. Without rigorous scrutiny, the nation risks locking itself into a cycle where debt servicing stifles progress, undermining efforts to achieve inclusive growth. The Ministry reiterated that fiscal responsibility, not fear, should guide policy, emphasizing that Uganda’s development should be measured by the outcomes of its investments, not the scale of its borrowing.
The public debt crisis underscores a broader challenge: balancing immediate development needs with long-term fiscal health. As Uganda navigates this delicate equation, the onus lies on policymakers, citizens, and institutions to demand accountability and ensure that every shilling borrowed contributes meaningfully to national progress. Failure to address these issues risks leaving future generations with a legacy of financial strain, limiting the country’s capacity to realize its developmental potential.