The government is seeking parliamentary approval to borrow more than Shs8.2 trillion from both commercial banks and development partners to finance key infrastructure and energy projects across the country.
According to details submitted to Parliament yesterday by the Finance State minister Henry Musasizi, the proposed loans are meant to fund the construction of oil roads in Ntoroko District, the upgrading of major roads in Jinja City and Kamuli District, and the establishment of critical power transmission lines across the country. The loans will be obtained from the World Bank, Standard Chartered Bank, and Citi Bank.
The largest portion of Shs4.7 trillion ($1.341m) will come from the International Development Association (IDA) of the World Bank Group. These funds will be directed toward the fourth phase of the Northern Uganda Social Action Fund (NUSAF IV), the second phase of the Development Response to Displacement Impacts Project (DRDIP II), the Uganda Learning Acceleration Programme (ULEARN), the Uganda Cities and Municipalities Infrastructure Development (UCMID) programme, and the Uganda Strengthening Public Investment and Asset Management for Growth and Resilience Programme (PIMPLUS).
The government is also seeking to borrow Shs1.4 trillion (pound 342.5m) from Standard Chartered Bank to finance the construction of the 400kV Karuma-Tororo double circuit transmission line, associated substations, and the 132/33kV Ntinda substation.
Another Shs933.7b (pound 230.4m) will be borrowed, also from Citi Bank, to fund the design and construction of the Jinja-Mbulamuti-Kamuli-Bukungu Road, measuring 127 kilometres, as well as 10 kilometres of Jinja City roads. In addition to this, Parliament will consider a proposal to borrow about Shs781.7b (pound 192.9m) from Citi Bank to finance phase one of the Enhancing Agricultural Production, Quality, and Standards for Market Access Project.
The fifth loan will involve borrowing Shs469.2b (pound 115.8m) from Standard Chartered Bank to finance critical oil roads under Package 6B. This includes the design and upgrading of the Karugutu-Ntoroko Road (56.5km), a link to Rwebisengo (8.2km), and 3.3 kilometres of town roads in Ntoroko District, totalling 68 kilometres. Uganda’s public debt has reached Shs116.2 trillion, according to the latest Annual Debt Statistical Bulletin and Public Debt Portfolio Analysis compiled by the Ministry of Finance.
Of this amount, external debt stands at Shs62.8 trillion ($15.5b), while domestic debt has risen to Shs68 trillion ($16.8b). This represents a 26.2 percent increase in total public debt within a year, up from Shs89.5 trillion recorded in June 2024.
The continuous borrowing trend has sparked concern among economists and policymakers about the sustainability of Uganda’s debt levels. However, the government maintains that the new loans are targeted toward productive sectors that will boost economic growth, improve infrastructure, and enhance service delivery.
Parliament’s consideration of these loans comes months after the House passed the Shs72.3 trillion national budget for the 2025/2026 financial year, with the government indicating plans to borrow Shs32 trillion, about 44 percent of the total budget to finance development programmes.
The remaining Shs34 trillion is expected to be raised through domestic revenue collections by the Uganda Revenue Authority (URA). During the same session, the Ministry of Finance also tabled before Parliament a supplementary expenditure schedule for the 2025/2026 financial year, outlining additional funding for sectors that they said were not adequately catered for in the approved budget. Deputy Speaker of Parliament Thomas Tayebwa, who chaired yesterday’s plenary, referred the loan requirement to the responsible committees.
Legislators react on loans
The Leader of Opposition in Parliament, Mr Joel Ssenyonyi, raised concern over the manner in which parliamentary committees are processing the loan requests worth Shs8.2 trillion. Mr Ssenyonyi said he had received reports that some of the loans had already been approved by the responsible committees and that reports were being signed, even before the requests were formally presented on the floor of Parliament, as required by law.
He noted that while government was seeking to borrow the funds to finance infrastructure and energy projects, the process appeared to have skipped crucial procedural steps. ‘I am concerned that the Committee on National Economy has been meeting and processing these loans before they are tabled in Parliament.
Reports are already being signed, yet the House has not formally received the loan requests,’ Mr Ssenyonyi said. In response, Mr Tayebwa acknowledged that some committees were handling urgent loans whose approval deadlines were approaching.
He, however, said he was not aware of the specific loans in question and promised to follow up on the matter to ensure due process is observed. He indicated that the loans are going to be handled on Tuesday and the supplementary budget will be handled on Wednesday.
Meanwhile, some Members of Parliament questioned why their districts were left out of the planned infrastructure projects, yet the entire country will be responsible for repaying the loans.
Kalungu West County MP Joseph Ssewungu expressed concern that despite government’s continuous borrowing, newly created districts such as Kalungu and Mitooma have not been allocated any major road projects. He said residents in these districts also deserve to benefit from the loans since they will contribute to their repayment through taxes.
Tororo District Woman MP Sarah Opendi raised a similar concern, saying government has repeatedly promised to construct the Nabumali-Butaleja-Namutumba road and the road connecting to Tororo since 2000, but the projects have never materialised.