Uganda Parliament Approves Shs 11 Trillion Loan

Kampala – The Parliament of Uganda has approved a record Shs10.5 trillion in new loans within 72 hours, a move that could push Uganda’s total public debt to Shs126.7 trillion, equivalent to 56% of the national GDP (Shs226.3 trillion) — far above the 50% debt-to-GDP threshold recommended for low-income countries.

The approvals, granted between Tuesday, October 28 and Wednesday, October 30, 2025, came just before Parliament adjourned sine die. The wave of approvals marks one of the largest single-week borrowing authorizations in Uganda’s recent fiscal history.

Breakdown of Approved Loans

USD 200 million from the World Bank’s IDA for the Public Investment and Asset Management for Growth and Resilience Program (PIMPLUS).

EUR 188.18 million from the African Development Bank and EUR 28.31 million from the African Development Fund for Busega–Mpigi Expressway construction.

EUR 9.4 million from Unicredit Bank Austria for the Mbale Oncology Centre.

USD 336.5 million from the Islamic Development Bank (IsDB) for Arua Oncology Centre and Mbale Radiotherapy Equipment.

USD 20 million from the Arab Bank for Development in Africa (BADEA) for the Nebbi–Goli Road (16km).

EUR 115.9 million from Standard Chartered Bank for the Critical Oil Roads Package 6B including Karugutu–Ntoroko Road (68km).

USD 121.9 million from the African Development Fund for the South Sudan–Uganda Power Interconnection Project.

EUR 192.9 million from Citibank for Enhancing Agricultural Production, Quality and Standards for Market Access (Phase I).

USD 1.34 billion from the World Bank, plus USD 328.3 million in grants, for NUSAF IV, ULEARN, and UCMID programs.

EUR 230.4 million from Citibank for Jinja–Mbulamuti–Kamuli–Bukungu Road (127km) and Jinja City Roads (10km).

EUR 342.5 million from Standard Chartered Bank for the Karuma–Tororo 400kV Transmission Line and Ntinda Substation Project.

In total, the Shs10.5 trillion represents about 14.6% of the 2025/26 national budget of Shs72.1 trillion, signaling the government’s continued dependence on borrowing to fund infrastructure and close fiscal gaps.

Rising Debt Burden

As of June 2025, Uganda’s public debt stood at Shs116.2 trillion (51.3% of GDP) — a sharp 26.2% increase from Shs89.5 trillion in 2024. The new borrowing pushes external debt to around Shs66 trillion, while domestic debt stands at Shs60.3 trillion.

Economists have raised concerns about debt sustainability, noting that debt servicing already consumes over 30% of recurrent expenditure, crowding out vital spending on healthcare, education, and social services.

The IMF and other fiscal observers have repeatedly cautioned that Uganda’s growing reliance on external loans could strain future budgets and limit fiscal flexibility.

With this latest borrowing spree, Uganda’s debt trajectory continues to rise steeply — highlighting the government’s challenge of balancing infrastructure ambitions with sustainable financing.