Uganda’s public debt remains sustainable over the medium to long term, Finance Minister Hon. Henry Musasizi has assured Parliament, despite an increase in the country’s overall debt stock.

Musasizi made the assurance while appearing before the Parliamentary Committee on the National Economy alongside technical officials from the Ministry of Finance, Planning and Economic Development to discuss Uganda’s public debt position, debt sustainability, external financing, contingent liabilities and domestic arrears.

The Minister said Uganda’s total public debt stock increased by 19.96 percent, from USD29.06 billion (Shs105.17 trillion) at the end of December 2024 to USD34.86 billion (Shs126.16 trillion) at the end of December 2025.

Of the total debt, USD15.84 billion was external debt, while USD19.02 billion was domestic debt.

Musasizi attributed the increase largely to increased domestic borrowing to finance the fiscal deficit, as well as continued financing of strategic infrastructure investments aimed at supporting economic transformation and long-term growth.

He said the sustainability of Uganda’s public debt should not be judged solely by the nominal debt stock, but also by the country’s capacity to service its obligations.

Uganda’s nominal public debt as a percentage of GDP increased from 46.86 percent in June 2024 to 50.90 percent in June 2025. Despite the rise, Musasizi said government’s fiscal consolidation measures are helping to maintain debt sustainability.

These measures include strengthening domestic revenue mobilisation, rationalising public expenditure, improving spending efficiency, realising oil revenues and implementing the Ten-Fold Growth Strategy.

The Minister, however, acknowledged the risks associated with the rising debt stock, particularly the increasing cost of debt servicing.

He said government will continue strengthening debt management, prioritising concessional and cost-effective financing, enhancing domestic revenue mobilisation and ensuring that borrowed funds are directed towards productive investments that generate sufficient returns to support repayment.

Musasizi also reported that commitments for ongoing externally financed projects and programmes stood at USD18.23 billion as of December 2025.

Of this amount, USD8.59 billion had been disbursed, representing 47.16 percent of the total commitments.

Government is working with implementing agencies and development partners to accelerate project implementation and disbursement while ensuring that the projects deliver their intended economic and social benefits.

The Minister told the committee that government’s contingent liabilities increased from Shs18.96 trillion in June 2024 to Shs20.57 trillion in June 2025.

This represents an increase of Shs1.61 trillion, or 8.5 percent.

The increase was largely linked to legal proceedings against Central Government, including land compensation disputes, contractual claims arising from infrastructure projects and other statutory obligations.

Uganda’s audited domestic arrears for the financial year 2024/25 stood at Shs8.68 trillion.

Central Government accounted for Shs8.54 trillion, equivalent to 98.45 percent of the total, while Local Governments accounted for Shs134.83 billion, or 1.55 percent.

Musasizi said government is strengthening commitment controls and expenditure management while enforcing the Public Finance Management framework to prevent the accumulation of new arrears.

He added that government will progressively clear verified and approved obligations.

The Finance Minister reaffirmed government’s commitment to responsible borrowing and prudent debt management, with emphasis on productive investment, fiscal sustainability and value for money.

The government’s position remains that Uganda’s public debt is sustainable over the medium to long term, while continued efforts to strengthen revenue collection, manage expenditure and ensure productive use of borrowed funds will be critical to maintaining that sustainability.