Uganda’s government has confirmed plans to borrow €500 million (about $568 million) to fund key infrastructure projects, even as concerns grow over the country’s rising public debt. Finance Minister Matia Kasaija announced during a session in parliament, where lawmakers approved the loan request on Thursday.
The borrowed money will come from three sources. Uganda will receive €270 million from the African Export-Import Bank (Afreximbank), a lender based in Cairo. The remaining €230 million will be jointly provided by Ecobank Uganda and the Development Bank of Southern Africa. While the minister did not provide a specific timeline for receiving the funds, he emphasized that the money will be used to improve national infrastructure.
Not everyone is happy about the decision. Opposition lawmakers strongly criticized the plan, arguing that Uganda’s debt is already too high. According to data from the Ministry of Finance, the country’s total public debt rose by 18% last year, reaching $29.1 billion. This sharp increase was largely driven by a rise in domestic borrowing.
The growing debt levels have not gone unnoticed. Last year, Uganda’s credit rating was downgraded by international agencies due to its increasing financial obligations. Despite this, the government insists that borrowing is necessary to keep the economy growing and to fund essential development projects, especially in transport, energy, and social services.
Critics argue that while infrastructure investment is important, borrowing at such a high level could hurt Uganda in the long run. They worry that debt repayments could limit spending on other vital sectors like health and education.
The Finance Ministry maintains that all loans will be managed responsibly and used for projects that will boost economic productivity. Still, financial experts and civil society groups are urging the government to be more transparent about loan terms and repayment plans.
As Uganda continues to seek external funding, many are asking: How much debt is too much? And how much debt is enough for a struggling country?
By Lucky Anyanje
