Uganda fiscal policy and debt management

Uganda’s Finance Minister Henry Musasizi has focused on capital market reforms, debt management, and cost-reduction strategies for major infrastructure and utility obligations. Musasizi has urged the Capital Markets Authority to increase long-term capital mobilization through innovation and increased public participation to support the nation’s Ten-Fold Growth Strategy and Fourth National Development Plan.

To manage fiscal obligations, Musasizi reported successful renegotiations for road infrastructure financing, which reduced the required loan amount for the Jinja-Mbulamuti-Kamuli-Bukungu and Jinja City roads from Euro 230.45 million to Euro 207.77 million, saving approximately UGX 97 billion. Additionally, the Minister reported a reduction in government borrowing related to the buyout of electricity distributor Umeme Company Limited. Following an Auditor General assessment, the government borrowed approximately US$118.39 million, roughly 38 percent less than the US$190.99 million originally authorized by Parliament, though Umeme has reserved the right to seek reconciliation regarding the final payout.

Addressing Parliament, Musasizi defended the sustainability of the country’s rising public debt, which grew from USD 29.06 billion in December 2024 to USD 34.86 billion by December 2025. He noted the debt-to-GDP ratio rose to 50.90 percent in June 2025, attributing the increase to domestic borrowing for fiscal deficits and infrastructure. To manage this, the government is pursuing fiscal consolidation, expenditure rationalization, and the use of anticipated oil revenues. Furthermore, Musasizi has met with the Uganda Bankers’ Association to advocate for lower credit costs to support the ATMS agenda, noting that shilling-denominated lending rates have gradually declined since April 2026.