finance 24 May 2026 Daily Monitor (Uganda)
Uganda's Debt Repayments Strain Budget, Experts Warn
Uganda's budget is facing severe strain as the government increasingly relies on new loans to service existing debts. This practice, often termed 'robbing Peter to pay Paul', is diverting funds from essential public services and development projects, according to financial analysts. Source: https://www.monitor.co.ug/uganda/business/finance/how-robbing-peter-to-pay-paul-derails-budget-plans-5470058
The Ugandan government’s strategy of taking out new loans to clear maturing debt is raising concerns among financial experts. This approach, known as “robbing Peter to pay Paul”, is reportedly hindering the effectiveness of national budget planning and execution.
This cycle of borrowing to repay debt is consuming a significant portion of government revenue, leaving less money available for crucial sectors such as health, education, infrastructure, and poverty reduction programs. The International Monetary Fund (IMF) has previously highlighted this as a fiscal risk for developing economies, including Uganda.
Analysts point out that consistently using new debt to manage old obligations suggests underlying issues with revenue generation or expenditure management. It can create a precarious financial situation, where the country becomes more vulnerable to external economic shocks and rising interest rates.
Furthermore, the high cost of servicing this debt limits the fiscal space available for government investment in long-term development goals. This can lead to a slowdown in economic growth and a diminished capacity to provide essential public services to citizens.
Experts are urging the government to prioritize sustainable revenue enhancement measures and robust expenditure control to break this cycle. A more transparent and sound fiscal policy is deemed necessary to ensure that public funds are directed towards productive investments rather than solely debt management.