The Uganda Parliament borrowing plan has stirred debate as lawmakers prepare to authorize Shs8.2 trillion in new loans—an amount that underscores the country’s growing debt burden. Uganda’s total public debt has reached Shs116.2 trillion, accounting for 51.3% of GDP, sparking concern among economists about long-term fiscal sustainability.
According to the Order Paper, eight out of ten agenda items involve motions to approve borrowing from major lenders. The government plans to secure USD 200 million from the World Bank’s International Development Association to fund the Public Investment and Asset Management for Growth and Resilience Program. An additional USD 1.34 billion and grants worth USD 328.3 million will finance various infrastructure and development projects.
Loans to Fund Infrastructure and Development
The government also seeks EUR 188.18 million from the African Development Bank and EUR 28.31 million from the African Development Fund to complete the Busega–Mpigi Expressway. The total Shs8.2 trillion represents 11.3% of Uganda’s 2025/2026 national budget of Shs72.1 trillion, highlighting the administration’s reliance on external and domestic borrowing.
As of June 2025, Uganda’s external debt stood at Shs55.9 trillion, while domestic debt reached Shs60.3 trillion. Despite these figures, the Ministry of Finance insists that borrowing is essential to fund infrastructure, energy, and social projects under Vision 2040.
Economists Warn of Debt Sustainability Risks
Critics, however, warn that overreliance on borrowing could crowd out private investment and inflate debt-servicing costs. In the previous financial year, debt repayments consumed more than 30% of recurrent expenditure, limiting funds for vital services like healthcare and education.
Timothy Chemonges, Executive Director at the Center for Policy Analysis (CEPA), cautioned that crossing the 50% GDP threshold is “problematic.” He emphasized that poor utilization of borrowed funds remains a major issue, with over Shs11.8 trillion in undisbursed loans still idle.
Uganda’s leaders now face a critical challenge: maintaining growth momentum without plunging into a debt trap. The Uganda Parliament borrowing debate will test whether the country can balance ambition with fiscal discipline in the years ahead.
