Uganda struggles to absorb US$ 5.51bln in concessional financing as projects fall behind schedule
The low absorption of financing has raised concerns about the implementation of public investment projects, with the government considering restructuring or cancelling projects that continue to underperform
KAMPALA, September 21, 2026 — Uganda is struggling to utilise billions of dollars in concessional financing, with US$ 5.51 billion [about Shs 21.450 trillion] in approved funds remaining undisbursed at the end of 2025, according to the recent released by the Ministry of Finance, Planning and Economic Development [MOFPED].
The low absorption of financing has raised concerns about the implementation of public investment projects, with the government considering restructuring or cancelling projects that continue to underperform.
The financing was secured to support public investments, including infrastructure and other development projects, but widespread delays have slowed implementation and prevented the country from fully benefiting from the available funds.
Majority of projects behind schedule
A review conducted by the Ministry of Finance in June 2026 found that 87 percent of 107 public investment projects were behind schedule, while 14 projects had stalled completely.
The review showed that delays affected both externally and domestically financed projects. Of the 62 externally financed projects assessed, 80 percent were behind schedule, compared with 94 percent of the 45 domestically financed projects.
The ministry attributed the delays to several factors, including difficulties in acquiring land, lengthy procurement processes, inadequate project preparation and delays in the release of government counterpart funding.
Unused loans come at a cost
Uganda’s inability to draw down the committed financing is also creating a significant financial burden.
The country has spent approximately US$ 130 million over six years on commitment and related fees associated with loans that had been contracted but not fully utilised within the agreed periods.
Such charges increase the cost of borrowing without delivering corresponding development benefits. Delays in implementing projects also postpone the economic and social benefits expected from investments in infrastructure and other public services.
Government moves to improve project execution
In response to the implementation challenges, the government has established a Project Execution Unit to strengthen the management and monitoring of loan-funded investments and address bottlenecks affecting project delivery.
The Ministry of Finance is also considering introducing stricter project-readiness requirements before new financing is committed. The move is intended to ensure that projects have key requirements, such as land, designs, procurement plans and counterpart funding, in place before financing is secured.
With Uganda’s public debt standing at approximately US$ 34.9 billion, ensuring that borrowed funds are effectively utilised has become increasingly important for economic growth and infrastructure development.
Delays threaten development gains
The difficulties in absorbing concessional financing highlight broader challenges in the implementation of public investment projects.
Efficient use of available financing is critical to reducing transport costs, expanding electricity access and supporting private-sector investment. Persistent delays, however, can increase project costs, prolong delivery timelines and reduce the economic impact of public investment.
For Uganda, improving project preparation, procurement, funding and execution will be critical to ensuring that secured financing translates into completed infrastructure and other development outcomes.
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