Uganda's Public Debt Surges to Shs130 Trillion Amid Rising Fiscal Pressures

Uganda’s public debt stock has ballooned to Shs130.8 trillion as of the end of 2025, according to the latest statistics from the Finance Ministry. This figure reflects a concerning upward trend, with domestic borrowing accounting for roughly Shs66 trillion (50-52 percent) and external debt making up the remaining Shs64 trillion (48-50 percent).

The debt-to-GDP ratio has increased from 48 percent in FY2021 to 52 percent in FY2025, surpassing the 50 percent benchmark set by the International Monetary Fund. This indicates that debt is expanding faster than the economy, straining fiscal capacity.

Against a national budget of Shs84 trillion for FY2026/27, the rising debt is squeezing government finances. Projections show debt servicing could absorb over 45 percent of revenues, leaving limited room for other priorities. Domestic revenues are expected to hit Shs44.4 trillion, a 19.3 percent rise from the prior year, but much of it will go toward repayments.

Experts like Jane Nalunga of SEATINI Uganda stress the need for prudent spending, as nearly half of collections are committed to debt obligations. Public finance analyst Hildah Tumuhe highlights the shift to commercial borrowing, which reduces liquidity for the private sector and prioritizes repayments over sectors like health and education.

While the IMF rates Uganda’s debt risk as moderate, breached thresholds and regional trends—such as debt distress in Zambia and Ghana—raise alarms about long-term stability.

Source: Daily Monitor (Uganda)