As Uganda approaches the 2026 general elections, alarm is growing among economists over the country's ballooning public debt, which has reached Shs106 trillion--posing a serious threat to economic stability and the future of public service delivery.
Projections for the 2025/2026 financial year show that Uganda's debt-to-GDP ratio is expected to hit 53.34%, surpassing the 50% ceiling set by the Charter of Fiscal Responsibility--a critical fiscal guideline meant to safeguard sustainability.
Senior economist Fred Muhumuza warns that Uganda is already trapped in a cycle of borrowing, with an increasing share of government revenue going to debt repayment rather than development priorities.
"In essence, Uganda is in a debt trap," Muhumuza said. "We are diverting resources away from essential sectors like health, education, and infrastructure to service past debts. It's unsustainable."
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The government plans to borrow Shs34.3 trillion in the 2025/2026 fiscal year to finance the national budget, which is projected at Shs72 trillion. This will push the debt stock even higher, exacerbating concerns about the country's fiscal health.
As of December 2024, Uganda's total public debt stood at Shs 106 trillion, reflecting a 9% increase from Shs96.6 trillion recorded in December 2023.
External debt accounted for Shs53.75 trillion, while domestic borrowing made up Shs53.22 trillion.
Economists attribute much of the current debt surge to election-related expenditure, warning that politically motivated spending is undermining fiscal discipline.
With campaigns heating up, many politicians are reportedly pushing through high-cost projects and unplanned expenditures to win over voters.
"The challenge is that public investment is being driven more by political expediency than economic necessity," Muhumuza, who has a PhD in economics, cautioned.
"It's a recipe for economic stagnation, not recovery."
Experts are calling for urgent fiscal reforms, including stronger oversight of borrowing and improved transparency around debt servicing.
Without decisive action, they warn, Uganda could find itself locked in a cycle of borrowing just to pay past debts--leaving limited funds for schools, hospitals, roads, and support for the private sector.
"This path is not just risky--it's regressive," said another financial analyst. "We must rethink our fiscal priorities before the debt burden cripples our development trajectory."
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