Finance assures parliament Uganda’s rising public debt remains sustainable
Debt stock jumped nearly 20% in a year, pushing the debt-to-GDP ratio past 50%
Finance Minister Henry Musasizi has told Parliament that Uganda’s public debt remains sustainable over the medium to long term, even as the country’s debt stock recorded a sharp jump over the past year.
Musasizi, appearing with technical officials from the Ministry of Finance, Planning and Economic Development before the Parliamentary Committee on the National Economy, briefed MPs on Uganda’s debt position, debt sustainability, external financing, contingent liabilities and domestic arrears.
He said total public debt rose 19.96 percent, from USD 29.06 billion (Shs105.17 trillion) at the end of December 2024 to USD 34.86 billion (Shs126.16 trillion) by December 2025. Of the total, USD 15.84 billion was external debt and USD 19.02 billion domestic.
The Minister attributed the rise mainly to increased domestic borrowing to plug the fiscal deficit and to continued financing of strategic infrastructure projects meant to support economic transformation.
Debt sustainability, he argued, should be judged not by the nominal debt figure alone but by the economy’s capacity to service it.
As a share of GDP, nominal public debt climbed from 46.86 percent in June 2024 to 50.90 percent in June 2025. Musasizi maintained the debt remains sustainable, pointing to fiscal consolidation measures including stronger domestic revenue mobilisation, expenditure rationalisation, improved spending efficiency, incoming oil revenues and the Ten-Fold Growth Strategy.
He acknowledged the risks tied to the growing debt stock, particularly the rising cost of servicing it, and said government would keep strengthening debt management, prioritise concessional and cost-effective financing, boost domestic revenue collection, and ensure borrowed funds go into productive investments capable of generating returns for repayment.
Disbursement lags on external projects
On external financing, Musasizi reported that commitments for ongoing externally funded projects and programmes stood at USD 18.23 billion as of December 2025, of which only USD 8.59 billion, or 47.16 percent, had been disbursed.
Government is working with implementing agencies and development partners to speed up implementation and disbursement while safeguarding the intended economic and social benefits of the projects.
Contingent liabilities and arrears tick up
Contingent liabilities rose from Shs18.96 trillion in June 2024 to Shs20.57 trillion in June 2025, an increase of Shs1.61 trillion, or 8.5 percent, driven largely by legal proceedings against Central Government, including land compensation disputes, contractual claims from infrastructure projects and other statutory obligations.
On domestic arrears, the audited stock for FY2024/25 stood at Shs8.68 trillion, with Shs8.54 trillion, or 98.45 percent, attributed to Central Government and Shs134.83 billion, or 1.55 percent, to Local Governments. Musasizi said government is tightening commitment controls and expenditure management, and enforcing the Public Finance Management framework, to prevent new arrears while clearing verified and approved obligations.
The Minister reaffirmed government’s commitment to responsible borrowing and prudent debt management, with continued emphasis on productive investment, fiscal sustainability and value for money.
