Busega-Mpigi Expressway cost overrun puts Uganda’s infrastructure borrowing under fresh scrutiny

Uganda’s flagship Busega-Mpigi Expressway has become a test case for how cost overruns and alleged corruption on major infrastructure projects could affect the country’s ability to raise financing for future road, rail and energy projects, after President Yoweri Museveni ordered the suspension of three senior engineers and a top ministry official over the project’s ballooning price tag.

The numbers

The 23.6km expressway and its 20km of access roads were originally contracted in 2019 at roughly Shs547.5 billion, financed largely through a Shs600 billion loan from the African Development Bank (AfDB). The project’s cost has since climbed to approximately Shs1.3 trillion — more than double the original estimate — even though only about 40% of the physical works had been completed as of Museveni’s June 26 directive, despite the full loan amount having already been disbursed.

To keep the project alive, the government returned to the AfDB for an additional Shs900 billion in financing, approved late last year. Parliament had separately sanctioned further AfDB borrowing of roughly Shs781 billion and Shs117.46 billion in October 2025 to cover funding gaps created by an expanded project scope. Even with this additional capital, industry sources estimate a further Shs280 billion is still required to settle outstanding compensation claims, largely tied to a swamp section of the route.

The project, initially due for completion in May 2024, is now not expected to be finished until 2030 — a six-year slip that extends the timeline for Uganda to realise the economic returns the road was meant to deliver, including reduced congestion on the Kampala–Masaka corridor and improved trade flow within the East African Community.

Financing and debt implications

The expressway’s overrun adds to a broader pattern of cost escalation across Uganda’s road sector. In March, Parliament’s Committee on Physical Infrastructure flagged similar concerns, noting that the project’s price had already surged past Shs1.2 trillion and warning that unresolved accountability gaps could set a precedent affecting how future infrastructure loans are structured and scrutinised.

The timing is notable for Uganda’s broader borrowing strategy. The country is concurrently seeking financing for other large projects, including the Standard Gauge Railway, for which the Islamic Development Bank approved a Shs2.73 trillion package last month. The AfDB currently backs 19 active public operations in Uganda worth about $2.2 billion, spanning roads, rural electrification and other infrastructure. Analysts tracking Uganda’s debt pipeline suggest that a visible anti-corruption response on a project as high-profile as Busega-Mpigi — including the suspension of implicated technocrats — is partly intended to reassure lenders as Kampala seeks additional external financing in the years ahead.

Compensation costs as a hidden budget driver

A significant share of the cost overrun traces back to land compensation rather than construction itself. When the original route was altered, the number of project-affected persons (PAPs) rose from 2,885 to 4,222, with total compensation liability valued at more than Shs167.7 billion. As of the most recent parliamentary reporting, over Shs5 billion remained unpaid to roughly 1,637 affected persons.

Museveni’s directive alleges that some of this expanded compensation bill was avoidable: that engineers shifted the route away from land that had already been surveyed and compensated, onto land in which they held personal interests, generating fresh — and costly — compensation obligations. If substantiated, the allegation would mean a material share of the additional Shs700 billion-plus in cost growth was driven not by engineering necessity but by alleged self-dealing, a distinction likely to matter to lenders assessing the credibility of cost estimates on future projects.

The Inspectorate of Government has also flagged a related risk to project economics: renewed encroachment on expressway land that has already been compensated, with officials warning in May that some individuals were re-occupying gazetted sections after payment — raising the prospect of yet further compensation costs before the corridor is fully secured and fenced.

President Museveni has given investigators a 100-day window to complete their probe, led by the Inspectorate of Government alongside a State House auditor. Works minister Fred Byamukama has said the ministry is treating the timeline as a firm deadline for addressing corruption more broadly, following earlier disclosures to Cabinet that officials had frustrated contractor payments for nearly two years while soliciting kickbacks on ministry projects.

For now, the expressway stands as a live example of the gap between headline project costs and eventual delivered costs on Uganda’s infrastructure books — a gap that matters not just for taxpayers, but for the terms on which the country’s next generation of AfDB- and IsDB-backed projects gets priced and approved.