Uganda’s growing debt burden is raising concerns among economists and financial experts.
The country’s public debt has now surpassed 50% of GDP, sparking fears about repayment costs and long-term economic stability.
In recent years, Uganda has borrowed heavily to fund infrastructure projects like roads, dams, and the East African Crude Oil Pipeline.
While these investments aim to boost growth, experts caution that without proper management, the debt could become unsustainable.
Public debt has risen sharply from around 30% of GDP in 2015 to over 50% today, and is likely to reach 52% in the next financial year.
Although this remains within manageable limits, the rapid pace of borrowing is alarming. The biggest concern, analysts say, is debt servicing—nearly 30% of Uganda’s revenue now goes toward repayments, leaving fewer funds for critical sectors like healthcare and education.
Adding to the pressure, a significant portion of Uganda’s debt is denominated in foreign currencies.
A weakening Ugandan shilling makes repayments even more expensive. The International Monetary Fund (IMF) has already classified Uganda as at "moderate risk of debt distress," warning that further unchecked borrowing could push the country into financial trouble.
This comes as the country reviews the budget for 2025-2026, with a 0.3% increase from 72.1 trillion on the current financial year to 72.37 trillion, driven largely by a modest rise in budget support, expected to increase from 1.39 trillion to 11.38 trillion.
Economists and experts under the civil society budget advocacy group urge the government to improve revenue collection, prioritise high-return investments, and seek favourable loan terms to ease repayment burdens. Transparency in debt management is also critical to ensure borrowed funds are used effectively.
While strategic borrowing can drive development, experts stress that Uganda must balance its debt levels with sustainable economic growth to avoid future fiscal crises.
