Business 19 June 2026 Daily Monitor (Uganda)
Uganda's Undisbursed External Debt Climbs to Shs20 Trillion
Uganda's stock of undisbursed external loans surged by over 44% in the first quarter of 2026, reaching Shs20.3 trillion ($5.39 billion). This significant increase raises concerns about potential project delays and the accumulation of commitment charges on unused funds. Source: https://www.monitor.co.ug/uganda/business/finance/undisbursed-external-debt-increases-to-shs20-trillion-5501864
The first quarter of 2026 saw a dramatic rise in Uganda’s undisbursed external debt, climbing to Shs20.3 trillion ($5.39 billion) by the end of March. This represents a substantial increase of more than 44 percent from the Shs14.1 trillion ($3.74 billion) recorded at the close of December 2025, according to the Ministry of Finance.
Undisbursed debt refers to funds that have been approved and committed by lenders but have not yet been drawn down by the borrower. While these loans are earmarked for crucial development projects, delays in their utilization can lead to a financial burden for the government in the form of commitment fees charged on the unutilized portions.
The Ministry of Finance attributes this surge primarily to the signing of several new loan agreements during the January-to-March period. Projects contributing to this increase include initiatives focused on enhancing agricultural productivity, the Karuma-Tororo Transmission Line, water supply and sanitation, the Laropi-Moyo-Katuna Road, and the Development Response to Displacement Impacts Project II.
This rise in undisbursed funds was observed across all lender categories. Commitments from private creditors swelled from $140 million to $960 million, while loans from multilateral institutions grew from $2.99 billion to $3.58 billion. Bilateral lenders also saw an increase, with commitments rising from $610 million to $850 million.
Despite the increase in undisbursed debt, overall public debt saw a marginal rise to $34.98 billion. Multilateral institutions, including the World Bank and African Development Bank, remain Uganda’s principal creditors, accounting for a significant portion of the external debt. Concessional loans continue to form the backbone of Uganda’s external borrowing strategy, offering more favorable interest rates and repayment terms.
While the government asserts that debt risks remain manageable, particularly due to a high proportion of fixed-interest debt, analysts caution that slow project execution could undermine the intended economic benefits of these borrowed funds. Improved project implementation is highlighted as critical to ensuring that Uganda derives maximum value from its external borrowing and delivers tangible progress to its citizens.