KAMPALA, August 12,2026 – The Finance Minister Henry Musaisizi, has comforted Parliament that Uganda’s public debt remains sustainable over the medium to long term, despite a significant increase in the country’s debt stock.
Musasizi, together with technical officials from the Ministry of Finance, Planning and Economic Development, appeared before the Parliamentary Committee on the National Economy to discuss Uganda’s public debt position, debt sustainability, external financing, contingent liabilities and domestic arrears.
He said that Uganda’s total public debt stock increased by 19.96 percent, from US$ 29.06 billion [Shs 105.17 trillion] at the end of December 2024 to US$ 34.86 billion [Shs 126.16 trillion] at the end of December 2025. Of this, US$ 15.84 billion was external debt and US$ 19.02 billion domestic debt.
Musasizi attributed the increase largely to increased domestic borrowing to finance the fiscal deficit and continued financing of strategic infrastructure investments aimed at supporting economic transformation and long-term growth.
He noted that debt sustainability should be assessed not only by the nominal debt stock, but also by the economy’s capacity to service the debt. As a percentage of gross domestic product [GDP], nominal public debt rose from 46.86 percent in June 2024 to 50.90 percent in June 2025.
Despite this increase, Musasizi said the debt remains sustainable, supported by government’s fiscal consolidation measures, including strengthening domestic revenue mobilisation, rationalising public expenditure, improving spending efficiency, realising oil revenues and implementing the Ten-Fold Growth Strategy which aims to grow the country’s economy to US$ 500 billion by 2040.
He however, acknowledged the risks associated with the rising debt stock, particularly the increasing cost of debt servicing.
Government, he said, will continue to strengthen debt management, prioritise concessional and cost-effective financing, enhance domestic revenue mobilization and ensure borrowed funds are directed towards productive investments that generate sufficient returns to support repayment.
On external financing, Musasizi reported that commitments for ongoing externally financed projects and programmes stood at US$ 18.23 billion at December 2025, of which US$ 8.59 billion had been disbursed, representing 47.16 percent.
“Government is working with implementing agencies and development partners to accelerate implementation and disbursement while ensuring projects deliver the intended economic and social benefits,” he said.
The Minister also said that contingent liabilities increased from Shs 18.96 trillion in June 2024 to Shs 20.57 trillion in June 2025, an increase of Shs 1.61 trillion. The increase was largely linked to legal proceedings against Central Government, including land compensation disputes, contractual claims arising from infrastructure projects and other statutory obligations.
On domestic arrears, the audited stock for 2024/25 financial year [FY] stood at Shs 8.68 trillion, with Shs 8.54 trillion [98.45 percent] attributed to Central Government and Shs134.83 billion [1.55 percent] to Local Governments.
He noted government is strengthening commitment controls and expenditure management, and enforcing the Public Finance Management framework to prevent new arrears while progressively clearing verified and approved obligations.
Musasizi reaffirmed government’s commitment to responsible borrowing and prudent debt management, with emphasis on productive investment, fiscal sustainability and value for money.
https://thecooperator.news/ugandas-public-debt-hits-shs-131-trillion-in-december-2025/
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