Members of Parliament on the Public Accounts Committee (PAC) have raised alarm over Uganda’s ballooning debt, calling for urgent restructuring measures after the Auditor General revealed that the country’s debt had soared to UGX 97.499 trillion by June 2023—a staggering 111.7% increase over the last five years.
Presenting the committee’s report, PAC Chairperson Muhammad Muwanga Kivumbi highlighted the urgent need for the government to rethink its borrowing strategy.
“The committee recommends that the government restructure its debt to secure cheaper loans and reduce obligations. Measures should be initiated to reverse this debt trend, enforce fiscal discipline, and ensure timely servicing of domestic obligations, including interest payments,” Kivumbi said during a parliamentary session.
According to the Auditor General’s findings, the UGX 97.499 trillion debt is split into UGX 44.673 trillion in domestic borrowing and UGX 52.826 trillion from external sources. Over the past year, the debt burden has risen by UGX 9.329 trillion (10.74%) from UGX 86.839 trillion in June 2022.
Kivumbi expressed concern over Uganda’s rising debt service costs, which continue to escalate due to the government’s failure to efficiently use contracted loans. As a result, the country incurred UGX 112 billion in commitment fees by mid-2023—an expense that surpassed the approved budget.
The report also criticized the government’s dependency on supplementary budgets and excessive borrowing, which has been a significant factor in the debt surge. The committee particularly emphasized the need for the government to address issues related to the UGX 405 billion in penalty fees that the Bank of Uganda imposed due to delayed payments on domestic debt obligations.
In response, the Ministry of Finance acknowledged the debt concerns and shared that discussions were underway with the central bank to cap the penalty fees. Additionally, the ministry plans to revise the Public Debt Management Framework by December 2024 to incorporate new safeguards, including guidelines for financial derivatives and debt swaps.
Speaker of Parliament Anita Among deferred further debate on the matter, requesting that the Ministry of Finance address the key issues raised in the report before the discussion continues.