Uganda’s debt projected to hit Shs130 trillion, CSOs raise alarm

ParrotsugJune 10, 2026Read original

Civil Society Organisations (CSOs) have called for responsible borrowing, transparency and accountability in public debt management as Uganda’s debt burden continues to rise.

The call was made on Wednesday during the launch of the Freedom from Debt Campaign in Uganda at the Civil Society Budget Advocacy Group (CSBAG) offices in Ntinda, Kampala.

The organisations said Uganda’s public debt stood at Shs94.9 trillion as of December 2025 and is projected to rise to Shs130 trillion in the financial year 2026/27.

They warned that increasing debt servicing obligations could limit the government’s ability to respond to development priorities and economic shocks.

“Uganda’s debt-to-GDP ratio has increased from approximately 46.6% in FY2023/24 to above 50%, approaching levels that require careful management to preserve fiscal sustainability and macroeconomic stability,” the CSOs said.

They added that rising debt obligations expose the country to exchange rate fluctuations, interest rate shocks, refinancing risks and revenue uncertainties.

According to the CSOs, the growing cost of servicing debt is competing with funding for key public services.

In the next financial year, government is projected to spend Shs33.6 trillion on debt servicing compared to Shs13.5 trillion for human capital development, Shs2.26 trillion for agro-industrialisation and about Shs2.5 trillion for wealth creation programmes.

Julius Mukunda, the executive director of CSBAG, said Uganda needs fair borrowing terms and should reduce dependence on debt.

“If you are borrowing externally at 8%, and the same market is providing loans to other countries at less than 3%, that is already unfair for a country like Uganda,” Mukunda said.

He said borrowed money should be used for productive investments such as roads, schools and other projects that improve citizens’ welfare.

“We can reduce debt dependence by ensuring that the current debt we have acquired delivers the things we want,” he said.

Henry Magala, the country director of AHF Uganda Cares, said the campaign is not against borrowing but is aimed at promoting prudent debt management.

“The campaign is not against borrowing. It is a call for social justice, equity, responsible borrowing, transparency, accountability and prudent debt management,” Magala said.

He said borrowed funds must generate meaningful development outcomes in sectors such as healthcare, education, agriculture, social protection and employment creation.

Hilda Tumuhe, a representative from SEATINI Uganda  said Uganda’s debt is not by accident, but called for innovative financing approaches to strengthen public debt management.

She said Uganda can reduce debt dependence by addressing inefficiencies in government spending.

“Some expenses like unnecessary travel, memberships and other costs can be reduced. We can reduce debt dependence by being efficient,” Naigaga said.

The CSOs also called for reforms in the global borrowing system, arguing that developing countries should access loans under fairer terms.

They said the current sovereign debt system places a heavier burden on developing countries while benefiting private creditors and wealthy nations.

“We want a better market where if Uganda goes to borrow, it can borrow under almost the same terms as other countries. That is very critical,” Mukunda said.