Overview:
According to Finance Ministry documents, the largest portion, USD 1.34 billion, would come from the World Bank’s IDA, alongside USD 328.3 million in grants. Other key requests include:
KAMPALA: The Ministry of Finance has asked Parliament to approve over UGX 8.6 trillion (USD 2.3 billion) in new borrowing from international lenders to fund major infrastructure, energy, agriculture, and health projects across Uganda.
The request was tabled on Tuesday by David Bahati, Acting Government Chief Whip and Minister of State for Trade, Industry, and Cooperatives, on behalf of Finance Minister Matia Kasaija, who was absent. The debate, chaired by Deputy Speaker Thomas Tayebwa, quickly turned heated, reflecting growing concerns over Uganda’s escalating public debt.
Bahati told MPs that the government plans to borrow USD 200 million from the International Development Association (IDA) of the World Bank to finance the Public Investment and Asset Management for Growth and Resilience Program (PIMPLUS). The broader borrowing package also includes funds from the African Development Bank (AfDB), Islamic Development Bank (IsDB), UniCredit Bank Austria, Citi Bank, and Standard Chartered Bank, earmarked for projects such as the Busega–Mpigi Expressway, the Mbale and Arua Oncology Centres, and critical oil roads.
However, legislators expressed frustration at the absence of senior Finance Ministry officials during the plenary debate. Ibrahim Ssemujju Nganda (Kira Municipality, Shadow Minister for Finance) described the situation as “unacceptable,” while Muwanga Kivumbi (Butambala County) accused the Ministry of laxity in handling national finances.
Despite the criticism, the Parliamentary Committee on National Economy, chaired by John Bosco Ikojo, recommended approval, noting the loans align with the strategic objectives of Uganda’s Fourth National Development Plan (NDP IV). The funds would also support programs such as NUSAF IV, DRDIP II, ULEARN, and the Uganda Cities and Municipalities Infrastructure Development Program (USMID).
According to Finance Ministry documents, the largest portion, USD 1.34 billion, would come from the World Bank’s IDA, alongside USD 328.3 million in grants. Other key requests include:
- EUR 188.18 million from AfDB and EUR 28.31 million from the African Development Fund for the Busega–Mpigi Expressway.
- USD 36.5 million from IsDB and EUR 9.4 million from UniCredit for the Mbale and Arua Oncology Centres.
- EUR 192.9 million from Citibank to enhance agriculture and market standards.
The borrowing request comes as Uganda’s public debt soars to UGX 116.2 trillion ($32.3 billion), up 26.2% from June 2024, with external debt at UGX 55.9 trillion and domestic debt at UGX 60.3 trillion. Economists warn that the debt-to-GDP ratio is approaching 50%, raising concerns over sustainability.
The government maintains that the loans are strategic for Vision 2040 and the UGX 72.3 trillion 2025/26 national budget, of which 44.3% will be financed through borrowing. Officials insist the funds will support projects that stimulate productivity, create jobs, and improve public infrastructure.
Whether Parliament will approve the full borrowing package remains uncertain, but the debate underscores growing scrutiny over Uganda’s fiscal trajectory.