The Ministry of Finance in Uganda has recently shared some worrying figures about the country’s borrowing over the past eleven years. According to the 2025/26 National Budget Framework Paper, Uganda has borrowed a huge amount of UGX 43.252 trillion (around US$11.86 billion) since 2013. UGX 16.405 trillion of this money has not yet been used, meaning it remains undisbursed.

The report reveals that although Uganda has borrowed a lot, only about UGX 26.847 trillion (US$7.36 billion) has actually been made available for various projects. This leaves a significant amount—UGX 16.405 trillion (US$4.5 billion)—sitting idle, which is concerning because these loans are still accumulating interest.

The government expects to spend UGX 12.72 trillion on servicing loans in the upcoming financial year. This is a large portion of the total domestic revenue projected at UGX 31.98 trillion for 2024/25. This situation raises important questions about whether Uganda can sustainably manage its finances, as nearly one-third of its domestic revenue is going towards paying off debts.

A major focus of Uganda’s borrowing has been the Integrated Transport Infrastructure & Services programme, which accounts for a large share of the loans. The total amount committed to this programme is US$3.47 billion (UGX 12.66 trillion), with US$2.15 billion (UGX 7.83 trillion) already disbursed and US$1.32 billion (UGX 4.83 trillion) still undisbursed.

Despite these challenges, the government defends its borrowing by highlighting several infrastructure achievements:

- The share of paved national roads has nearly doubled from 15% (3,121 km) in the fiscal year 2012/13 to 29% (6,133 km) in FY 2022/23.

- The construction of Kabelega International Airport and the expansion of Entebbe International Airport are major projects funded through these loans.

- Additionally, efforts are underway to improve the Meter Gauge Railway lines connecting Malaba to Kampala and Tororo to Gulu.

While the government claims that public debt is still manageable, the rising costs of servicing this debt highlight the need for better domestic revenue collection and careful management of public spending. The Ministry stresses the importance of focusing on investments that provide high economic and social returns to ensure that borrowed funds are used effectively for national development.

In conclusion, Uganda's borrowing strategy shows a complex balance between funding important infrastructure projects and managing a growing debt burden. As the country faces these challenges, careful planning and execution will be crucial for achieving long-term economic stability and growth.

What are your thoughts on this matter? Please feel free to share your opinions in the comment box and visit the following links for more information. Don't forget to follow me for more interesting updates.