Uganda’s Public Debt Rises to KSh4.75 Trillion Amid Increased Borrowing

Uganda’s public debt stock rose to approximately KSh4.75 trillion by the end of June 2026, up from KSh4.13 trillion a year earlier, according to the Ministry of Finance, Planning and Economic Development.

The increase, equivalent to approximately KSh616.44 billion, was recorded during the 2025/2026 Financial Year, with domestic borrowing accounting for the largest share of the growth.

The ministry’s annual debt statistical bulletin and public debt portfolio analysis show that Uganda’s debt-to-GDP ratio increased from 51.3 per cent in June 2025 to 54.3 per cent by June 2026, reflecting the growing burden of government borrowing.

Domestic debt rose to approximately KSh2.66 trillion, accounting for 56.1 per cent of the country’s total public debt, compared with approximately KSh1.99 trillion recorded at the end of June 2025.

As a share of GDP, domestic debt increased from 26.7 per cent to 30.5 per cent during the period under review.

Meanwhile, external debt declined as a proportion of GDP, falling from 24.7 per cent to 23.9 per cent, largely due to economic growth outpacing the accumulation of external debt and slower disbursements.

The Ministry of Finance said the increased borrowing helped finance part of the government’s budget deficit for the 2025/2026 financial year.

Despite the rise in overall public debt, the stock of Treasury bills slightly declined during the period, falling from approximately KSh254.73 billion to KSh247.76 billion.

Public borrowing remains an important source of funding for infrastructure and essential services, including roads, schools and hospitals.

However, the ministry’s debt analysis highlights the potential risks of excessive borrowing, which can place pressure on government spending, limit investment in social services and infrastructure, and constrain the ability to respond to economic downturns through countercyclical fiscal policies.

The country now faces the challenge of balancing the need to finance development priorities with maintaining debt sustainability and protecting funding for essential public services.