By Naome Namusoke/ KMA Updates
Kampala, Uganda — Civil society has cautioned Government against what it describes as irresponsible borrowing, warning that Uganda’s rapidly rising public debt and growing dependence on domestic financing pose significant risks to the country’s economic stability.
According to official figures, Uganda’s public debt increased sharply to Shs116.21 trillion by June 2025, up from Shs94.72 trillion in June 2024, representing a rise of more than Shs21 trillion within a year.
The Executive Director of the Civil Society Budget Advocacy Group (CSBAG), Julius Mukunda, attributed the surge in debt largely to large-scale infrastructure investments and mounting fiscal pressures as the country prepares for the 2026 general elections.
Mukunda made the remarks today while addressing journalists at CSBAG offices in Ntinda, where he was presenting the organisation’s analysis and views on the National Budget Framework Paper (NBFP) for the 2026/2027 financial year.
“The Government has increasingly turned to domestic borrowing to finance fiscal deficits. This has altered the composition of the debt portfolio and raised serious concerns about sustainability,” Mukunda said.
He urged authorities to be more deliberate in their borrowing decisions, particularly regarding why government borrows and the sources of financing, warning that poor choices could place a long-term economic burden on Ugandans.
Mukunda further explained that while domestic borrowing can be useful in the short term, excessive reliance on it risks crowding out private sector credit, driving up interest rates and ultimately slowing economic growth.
The CSBAG executive director also challenged the Government to clearly account for the economic impact of election-related expenditure, noting that electoral financing has contributed significantly to current fiscal pressures.
According to CSBAG estimates, Government allocated approximately Shs1.23 trillion for electoral activities, with about 72 per cent of the funds utilised by the Electoral Commission.
As Uganda heads into the 2026 election cycle, the organisation called for stronger fiscal discipline, enhanced transparency in public borrowing, and a clear and credible debt management strategy to safeguard macroeconomic stability.
CSBAG stressed that without prudent borrowing and expenditure controls, rising debt levels could undermine investor confidence, constrain future public spending, and expose the economy to increased vulnerability.
