Uganda’s public debt has risen to Shs126.16 trillion, up from Shs105.17 trillion at the end of December 2024, representing a 19.96% increase, according to Finance Minister Henry Musasizi.
Musasizi said the increase was largely driven by increased domestic borrowing to finance the fiscal deficit and continued investment in strategic infrastructure projects.
Appearing before Parliament’s Committee on the National Economy alongside technical officials from the Ministry of Finance, Planning and Economic Development, Musasizi said the country’s debt remains sustainable despite the growing debt burden.
“Uganda’s public debt remains sustainable over the medium to long term,” Musasizi told the committee.
As of December 2025, Uganda’s total public debt stood at USD34.86 billion, equivalent to Shs126.16 trillion. External debt accounted for USD15.84 billion, while domestic debt stood at USD19.02 billion.
The Minister said debt sustainability should not be judged solely by the size of the debt stock, but also by the country’s ability to service its obligations.
“Debt sustainability should be assessed not only by the nominal debt stock, but also by the economy’s capacity to service the debt,” he said.
The debt-to-GDP ratio also increased from 46.86% in June 2024 to 50.90% in June 2025, reflecting the growing pressure on the economy.
Musasizi, however, said Government is implementing fiscal consolidation measures to contain the debt burden. These include increasing domestic revenue collection, rationalising public expenditure, improving spending efficiency, realising oil revenues and implementing the Ten-Fold Growth Strategy.
He acknowledged that the rising debt stock presents risks, particularly through the increasing cost of debt servicing.
“Government will continue to strengthen debt management, prioritize 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,” Musasizi said.
External financing
The Minister disclosed that commitments for ongoing externally financed projects and programmes stood at USD18.23 billion as of December 2025.
Of this amount, only USD8.59 billion, representing 47.16%, had been disbursed.
Government is working with implementing agencies and development partners to accelerate the implementation of externally funded projects and improve the rate of disbursement, while ensuring the projects deliver their intended economic and social benefits.
Contingent liabilities and arrears
Musasizi also revealed that Government’s contingent liabilities increased from Shs18.96 trillion in June 2024 to Shs20.57 trillion in June 2025, an increase of Shs1.61 trillion or 8.5%.
He attributed much of the increase to legal proceedings against Central Government, including land compensation disputes, contractual claims arising from infrastructure projects and other statutory obligations.
Meanwhile, Uganda’s audited domestic arrears stood at Shs8.68 trillion for the 2024/25 financial year.
Central Government accounted for Shs8.54 trillion, representing 98.45%, while Local Governments accounted for Shs134.83 billion, or 1.55%.
Musasizi said Government is strengthening commitment controls and expenditure management while enforcing the Public Finance Management framework to prevent the accumulation of new arrears.
He said Government will progressively clear verified and approved obligations as it continues to pursue responsible borrowing and prudent debt management.
The Minister maintained that borrowed funds must be channelled into productive investments capable of supporting economic growth and generating returns to facilitate repayment.
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