Uganda’s Ministry of Finance announced a significant decrease in external borrowing, cutting it by 98% for the 2025-2026 financial year.
In response to the escalating public debt, which rose from $23.7 billion to $25.6 billion between last year and June 2024, the government has initiated this measure, according to official ministry statistics.
The increasing debt burden has prompted criticism from opposition lawmakers and resulted in multiple credit rating downgrades. Nonetheless, the Ugandan government maintains that its borrowing strategies have stimulated economic expansion, which has surpassed that of many African countries since the COVID-19 pandemic, as reported by Reuters.
The Ministry of Finance projects a significant decline in external borrowing, from 1.394 trillion Ugandan shillings (approximately $380 million) to 29.9 billion shillings ($8.15 million).
Uganda’s credit rating was downgraded by Fitch Ratings in August, driven by its heavy dependence on domestic debt markets.
The government’s new debt strategy includes borrowing 4.01 trillion shillings ($1.09 billion) from the domestic market through Treasury bonds in the next fiscal year, representing a 54% decrease in debt issuance from the previous period.
