As Uganda’s public debt surpasses Shs 100 trillion, concerns are growing over the country’s ability to manage its borrowing sustainably without jeopardizing future growth. By the end of June 2025, the total public debt stock is projected to reach USD 31.5 billion (Shs 116 trillion), comprising USD 15.49 billion (Shs 56.3 trillion) in external debt and USD 16 billion (Shs 59.77 trillion) in domestic debt. This represents a debt-to-GDP ratio of 51.26 percent, which Finance Minister Matia Kasaija asserts remains consistent with the Charter of Fiscal Responsibility. He maintains that Uganda’s debt is sustainable and supports private sector growth through strategic infrastructure investments.
However, rising interest payments, limited revenue mobilization, and increased reliance on non-concessional borrowing continue to raise red flags. Over the past decade, public debt has financed key sectors including integrated transport infrastructure (29.3%), electricity generation and transmission (27.6%), water for production and consumption (11.5%), agro-industrialisation (5.1%), education and health (5%), housing and urban development (3%), and industrial park development (2%).
To preserve debt sustainability, the government is pursuing domestic revenue mobilization, concessional financing from institutions such as the World Bank, IMF, African Development Bank, Islamic Development Bank, and BADEA, and implementing the Okusevinga initiative to encourage Ugandans to invest in government securities via mobile money.
Meanwhile, Uganda has transitioned from a low-income to a middle-income country, with strong economic fundamentals including GDP growth, price and currency stability, job creation, exports, and foreign direct investment. According to Kasaija, poverty and inequality have significantly declined, and the number of households engaged solely in subsistence farming has dropped to three in ten.
The government remains committed to accelerating full monetisation of the economy and channeling resources into agro-industrialisation, tourism, mineral beneficiation, manufacturing, scientific innovation, and digital transformation. Uganda’s long-term vision is to evolve into a USD 500 billion economy, driven by value addition to its agricultural and natural resources, industrial expansion, tourism, and the knowledge economy.
