Uganda’s Public Debt Surges 18% in 2024 Amid Infrastructure Spending

Uganda’s public debt climbed sharply by 17.8% in 2024, driven by increased domestic borrowing to finance infrastructure projects and cover budget deficits, according to a new report from the finance ministry. The country’s total debt stock rose to $29.1 billion by December 2024, up from $24.7 billion the previous year.

The rising debt levels have drawn criticism from opposition parties, who argue that the growing repayment burden is straining national revenues. The Bank of Uganda has also warned that debt servicing costs are putting pressure on public finances. However, the government maintains that the borrowing is necessary to support economic expansion, with growth projected at 6%-6.5% for the current fiscal year—outpacing many African economies.

Nearly half of Uganda’s debt is external, with China emerging as the largest bilateral lender in recent years. The debt-to-GDP ratio also increased, reaching 52.1% compared to 49.9% in the previous period.

To address concerns over debt sustainability, President Yoweri Museveni has pledged to significantly reduce external borrowing starting July 2024. Meanwhile, the budget deficit is expected to widen to 5.7% of GDP in the 2024/25 fiscal year, up from 4.5% previously, as the government continues to prioritize infrastructure-driven growth.