Uganda plans to cut its domestic debt issuance by 21.1% in the financial year starting July from the previous period to help trim its ballooning public debt, the Finance Ministry said in a budget paper seen by Reuters on Thursday.
A total of $2.53 billion worth of Treasury bills and bonds will be issued in the June and July 2026, 2027 financial year.
“This reduction reflects government’s intention to avoid crowding out of the private sector, curb the rising debt to Gross Domestic Product (GDP) ratio, and address the growing burden of interest payments relative to revenues,” the ministry said in the paper.
Interest’s payments on Uganda’s public debt are projected to swallow nearly a third of all domestic revenues in the 2026 and 2027 fiscal year, according to the Ministry.
As a percentage of GDP, public debt rose to 51% in the year to June from 46.8% in the previous period.
“Such elevated debt service burdens shrink fiscal space, leaving fewer resources available for discretionary spending in high-multiplier, growth-enhancing sectors,” the Ministry said in the paper.
Uganda’s total public debt stood at $32.3 billion as of June, up 26.2% from the same period 12 months earlier.
–Reuters–
