Uganda plans to reduce its domestic debt issuance by 21.1% in the 2026/27 financial year. The Ministry of Finance revealed that it will issue Shs9 trillion ($2.53 billion) in Treasury bills and bonds, down from Shs11.4 trillion in the previous year. This Uganda domestic debt issuance reduction seeks to address the growing concerns over public debt.
By cutting back on debt issuance, Uganda hopes to avoid crowding out the private sector. The government also aims to reduce its rising debt-to-GDP ratio and manage the increasing burden of interest payments. According to projections, nearly one-third of Uganda’s domestic revenues in the 2026/27 fiscal year will go toward servicing this debt.
Uganda’s Domestic Debt Issuance Reduction and Economic Growth Forecast
Uganda’s public debt has grown significantly, reaching $32.3 billion in June 2025, marking a 26.2% increase from the previous year. The debt-to-GDP ratio now stands at 51%, up from 46.8% in the prior period. This increase has raised significant concerns regarding Uganda’s fiscal sustainability.
To address these issues, the Ministry of Finance has decided to implement the Uganda domestic debt issuance reduction. By scaling back on debt issuance, the government can free up fiscal space for critical growth sectors. In turn, this will help fund high-priority projects and reduce the financial strain from debt servicing. Despite these challenges, Uganda’s economy is expected to grow by 10.4% in the 2026/27 fiscal year. The growth will largely stem from the expected start of oil production in 2026.
Oil Production to Drive Uganda’s Economic Growth
The beginning of oil production in Uganda’s western fields is expected to be a key driver of the country’s economic recovery. As oil revenues start to flow, Uganda anticipates increased productivity across various sectors. This will, in turn, stimulate the economy and provide much-needed financial stability. Moreover, oil-driven growth will ease the fiscal pressures caused by rising debt service costs, ensuring a more sustainable fiscal trajectory for the country.
Uganda’s Export Earnings Surge: A Positive Economic Indicator
Uganda has experienced a significant boost in export earnings, offering a promising outlook for the economy. In October 2025, Uganda’s export earnings surged to $1.5 billion, nearly double the amount from the same month in 2024. This increase resulted from higher revenues from coffee, cocoa, and gold exports. As Africa’s largest coffee exporter, Uganda has benefited from global price hikes in coffee.
Gold exports also saw substantial growth, more than tripling to $964.6 million in October 2025. This surge was driven by the increase in global gold prices, spurred by safe-haven demand and a weaker U.S. dollar. The surge in export revenues will help ease the fiscal challenges posed by Uganda’s rising debt service obligations.
