Uganda’s government is seeking parliamentary approval to borrow $608 million from international lenders to fund infrastructure development, amid growing concerns over the country’s rising public debt.
A document tabled in parliament Tuesday shows the East African nation plans to obtain $448 million from South Africa’s Rand Merchant Bank and $160 million from the Korea Export-Import Bank. Lawmakers are expected to debate and vote on the proposal in the coming days, though the government has not disclosed which specific projects the funds will support.
The new borrowing comes as Uganda’s public debt has climbed sharply. Finance ministry figures show total public debt reached $32.3 billion by the end of June, a 26.2% increase from the previous year.
Critics, including opposition politicians and economic analysts, have voiced alarm over the debt trajectory. The Bank of Uganda has warned that high debt-servicing costs are crowding out spending on critical social services such as health and education. Domestic borrowing now accounts for roughly half the debt stock, driving up interest payments.
Despite the warnings, President Yoweri Museveni’s administration continues to prioritize infrastructure as essential for economic growth in the landlocked country. Poor roads, unreliable electricity and limited transport links remain major obstacles to trade and investment.
Uganda has made strides in recent years with upgraded highways, new bridges, hydropower plants and airport improvements. The proposed loans fit into established financing partnerships. The Korea Export-Import Bank, for example, signed a $500 million framework agreement with Uganda in 2024 running through 2028 to support infrastructure initiatives. Rand Merchant Bank has also expanded its lending across Africa for energy, transport and industrial projects.
Analysts say the fresh credit could go toward further road modernization, electricity expansion or logistics improvements.
The borrowing needs are tied in part to Uganda’s delayed entry into oil production. Discoveries in the Albertine Graben region hold an estimated 6.5 billion barrels of recoverable reserves. Major projects, including the East African Crude Oil Pipeline, require substantial supporting infrastructure.
Commercial oil production, originally planned earlier, is now slated for 2026. Officials hope exports will eventually generate significant revenue to boost growth and ease debt pressures. The timeline has faced repeated setbacks, however, due to financing challenges, environmental opposition and shifting global energy demand.
As parliament prepares to review the $608 million facility, the debate is likely to underscore Uganda’s balancing act: pursuing development ambitions while managing risks to long-term financial stability.
The economy has shown resilience through global shocks, but sustained high borrowing continues to test that strength.
