Uganda public debt surged 26.2% in the 2024/2025 financial year as the government increased domestic borrowing to fund its financing needs. The total debt rose to $32.3 billion by June, up from $25.6 billion in the previous period.
The rapid growth reflects the government’s push for large infrastructure projects across energy, transportation, and other sectors. However, the central bank and analysts warn that rising repayments are consuming resources needed for critical areas such as education and health.
Most of the increase came from domestic borrowing, which jumped 52.7%, while external debt grew only 6.2%. Consequently, the tilt toward domestic financing drove both the nominal debt stock and higher debt service costs, as local markets demand higher yields.
As a share of GDP, Uganda public debt rose to 51.3% in 2024/25, up from 46.9% in the prior year. The finance ministry’s annual report highlights that this shift toward domestic borrowing has significantly increased the cost of debt management.
The rising debt underscores the challenges Uganda faces in balancing ambitious infrastructure spending with fiscal sustainability. Analysts caution that continued reliance on domestic markets could strain public resources further unless borrowing is carefully managed.
Ultimately, Uganda public debt growth reflects both the country’s development ambitions and the need for disciplined financial planning to maintain macroeconomic stability.
