Parliament in session.

Overview:

Uganda's public debt nears UGX 106 trillion as Parliament greenlights UGX 5.6 trillion in loans. Critics warn of weak oversight and undisbursed funds attracting interest.

KAMPALA, Uganda — Uganda’s Parliament approved loans totaling 5.619 trillion Ugandan shillings (approximately $1.5 billion USD) between January and May 2025, even as the nation’s public debt reached 106.22 trillion shillings (approximately $28 billion USD) by December 2024. The approvals come despite concerns from experts regarding parliamentary oversight and a significant sum of 16.402 trillion shillings (approximately $4.3 billion USD) in undisbursed loans that continue to accrue interest.

Details extracted from the Hansard, the official report of parliamentary proceedings, reveal that the Ministry of Finance informed Parliament’s Budget Committee that from 2013 to 2024, the government borrowed $11.855 billion USD (43.252 trillion shillings). Of this, $7.358 billion USD (26.847 trillion shillings) has been disbursed, leaving $4.496 billion USD (16.405 trillion shillings) undisbursed.

Timothy Chemonges, executive director at the Centre for Policy Analysis (CEPA), criticized Parliament’s trend of approving loans amidst rising interest on unutilized funds.

“Parliament has increasingly become a rubber stamp, approving loans without demanding concrete implementation plans or reviewing past performance,” Chemonges said in an interview. “The Auditor General’s findings are routinely ignored, and accounting officers face no consequences for failing to utilize funds. Meanwhile, interest on idle loans continues to drain the public purse. We are accumulating debt without results.”

Oversight Under Scrutiny

Dr. Amos Sanday, a research fellow at the Economic Policy Research Centre (EPRC), expressed concern about the nature of parliamentary oversight during loan approvals. While acknowledging the government’s limited preparedness for projects, Sanday also placed blame on Parliament.

“They (MPs) are doing oversight but not enough,” Dr. Sanday noted. “Ideally, you cannot disburse if you are doing enough oversight. … Parliament is partly to blame, and the people in charge of the project at the Ministry of Finance are the people to blame for what is going on partly.”

Jane Nalunga, executive director of the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) – Uganda, suggested that continued loan approvals despite low absorption rates point to weak oversight, as all loans are approved by Parliament through budget or supplementary schedules.

“This highlights a loophole of failure to access information on whether public debt is being acquired for ready projects,” Nalunga said. “It is imperative for Parliament to ensure that they pass loans for only ready projects as guided by the public investment management policy.”

Breakdown of Approved Loans in 2025

The approved loans in 2025 include:

  • Jan. 9, 2025:
    • $106 million USD (381.588 billion shillings) from the Islamic Development Bank and $25 million USD (89.994 billion shillings) from the Abu Dhabi Fund for the 98-kilometer Kumi-Ngora-Serere-Kagwara Road upgrade. Total: 471.582 billion shillings.
  • Undated approvals: 
    • 270 million Euros (1.115 trillion shillings) from African Export-Import Bank and up to 230 million Euros (950.055 billion shillings) from Ecobank Uganda Limited and Development Bank of Southern Africa Limited to finance the fiscal year 2024/2025 budget. Total: 2.065 trillion shillings.
    • $15.222 million USD (54.799 billion shillings) from the African Development Bank and $73.15 million USD (263.297 billion shillings) from the African Development Fund for additional funding for the Laropi-MoyoAfoji and Katuna-Muko-Kamuganguzi road projects. Total: 318.096 billion shillings.
    • 45 million Euros (185.966 billion shillings) from the French Development Agency for the National Water and Sewerage Corporation to address water and sanitation challenges in the Greater Kampala Metropolitan Area. Robert Migadde (Buvuma Island), vice chairperson of the Committee on National Economy, raised concerns about the high cost of water, currently at 5,000 shillings per unit for domestic consumption.
    • 40 million Euros (165.233 billion shillings) as additional funding for an earlier loan for road construction around the Greater Kampala Metropolitan Area. Leader of Opposition Joel Ssenyonyi backed the loan but urged intensified government oversight.
    • 162,462,445.694 Euros (670.586 billion shillings) as an insurance premium of 7.06% on an earlier loan to finance the development of industrial parks from the Export-Import Bank of China.
  • March 5, 2025:
    • Up to $18.09 million USD (65.119 billion shillings) from the African Development Fund for additional financing to expand the Uganda Cancer Institute.
  • March 20, 2025: 
    • Up to $100 million USD (359.991 billion shillings) from the Arab Bank for Economic Development in Africa (BADEA) private window, $50 million USD (179.974 billion shillings) from BADEA public window, and $25 million USD (89.984 billion shillings) from the OPEC Fund for International Development (OFID) to capitalize Uganda Development Bank (UDB). Total: 629.950 billion shillings.
    • Parliament also approved a government guarantee for Uganda Development Bank Limited to borrow up to $40 million USD (144.033 billion shillings) from the Islamic Development Bank (IDB), $30 million USD (108.017 billion shillings) from the Islamic Corporation for Development of the Private Sector, and $30 million USD (108.017 billion shillings) from the International Islamic Trade Finance Corporation. Total guarantee: 360.067 billion shillings.