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Dec 23rd, 2024

Parliament raises concerns over Uganda’s rising debt and undisbursed loans

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MPs are currently srcutinising the 2025/26 National Budget Framework Paper. The country has borrowed over UGX 43.252 trillion in the past 11 years, with UGX 16.405 trillion worth of loans remaining undisbursed
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PARLIAMENT — The Ministry of Finance has disclosed alarming figures on Uganda's debt burden, revealing that the country has borrowed over UGX 43.252 trillion in the past 11 years, with UGX 16.405 trillion worth of loans remaining undisbursed. The revelations were made in the 2025/26 National Budget Framework Paper, currently under parliamentary scrutiny. 
Key figures presented show that between 2013 and 2024, the government borrowed a total of US$11.855 billion (UGX 43.252 trillion). Of this, US$7.358 billion (UGX 26.847 trillion) has been disbursed, while US$4.497 billion (UGX 16.405 trillion) is yet to be accessed, despite accruing interest.


Ramathan Ggoobi 

Rising debt servicing costs
The Ministry also highlighted the burden of debt servicing, which is expected to consume UGX 12.72 trillion of the UGX 31.98 trillion in domestic revenue projected for the 2024/25 financial year. This marks a steep increase from the UGX 8.76 trillion spent on debt servicing in 2023/24. 
“Although public debt remains sustainable, the country is spending about one-third of its total domestic revenues on servicing debt,” the Ministry stated, emphasizing the need for improved revenue mobilization and prudent expenditure targeting.

Idle loans and infrastructure investments 
The Integrated Transport Infrastructure & Services program accounts for the largest share of borrowed funds, totaling US$3.471 billion (UGX 12.660 trillion). However, of this amount, US$1.324 billion (UGX 4.830 trillion) remains undisbursed. 
Despite the challenges posed by idle loans, the government defended its borrowing practices, citing significant achievements. Key developments include:

  • An increase in the share of paved national roads from 15% (3,121km) in FY 2012/13 to 29% (6,133km) in FY 2022/23.
  • Construction of Kabelega International Airport and expansion of Entebbe International Airport.
  • Rehabilitation of the Meter Gauge Railway, including the Malaba-Kampala and Tororo-Gulu sections.



    Uneven road allocation sparks debate
    The allocation of funds for specific road projects categorized as "tourism roads" and "security roads" raised concerns among MPs about equity.
    “Government says this money is for tourism roads, and another section is for security roads. What about other parts of the country? Everyone pays the loans, yet we are segregating roads into categories,” said Erute South MP Jonathan Odur. He further questioned the neglect of "coffee roads," "cotton roads," and "milk roads," which he argued are vital to Uganda’s agricultural and economic backbone.


    Jonathan Erute (Odur South MP)

As the debate continues, legislators have called for greater accountability, better debt management strategies, and a fair distribution of resources to ensure all regions benefit from government borrowing.

Looking ahead
With debt servicing projected to rise further, MPs and the Ministry are tasked with finding a delicate balance between financing development projects and maintaining fiscal sustainability. The discussion underscores the critical need for efficient utilization of borrowed funds to maximize economic and social returns for all Ugandans.

Torch Media Africa

Published By | Dickens Tiharihondijo

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