KAMPALA, Sept 24 – Uganda’s total public debt increased 14.8% year-on-year to $37.1 billion in June, driven primarily by increased domestic borrowing to finance the government’s budget deficit, according to the Finance Ministry.
The debt stock rose from $32.3 billion in June 2025, while public debt as a share of gross domestic product increased to 54.3%, from 51.3% a year earlier. External debt accounted for 43.9% of the total debt stock.
The Finance Ministry attributed most of the increase to higher issuance of domestic debt during the financial year ended in June, as the government sought to finance its budget deficit.
Domestic Treasury bond issuance increased during the period, reflecting a government strategy of relying more heavily on longer-term borrowing to fund development priorities while limiting refinancing pressures.
“This strategy helps reduce refinancing and rollover risks,” the ministry said in its report.
Shift Toward Longer-Term Domestic Debt
Uganda introduced a 25-year Treasury bond last year, making it the longest-maturity instrument in the government’s domestic debt portfolio.
The longer-dated issuance forms part of efforts to extend the average maturity of government debt and reduce the frequency with which existing obligations need to be refinanced.
However, the rise in public debt has continued to attract scrutiny. Uganda’s central bank has previously raised concerns about the pace of debt accumulation and its implications for fiscal sustainability.
In August, Fitch Ratings affirmed Uganda’s sovereign rating at B with a stable outlook, while identifying rising public debt and a high interest burden as constraints on the country’s credit profile.
The latest figures highlight the growing role of domestic capital markets in Uganda’s fiscal financing, even as the government seeks to manage debt-servicing costs and reduce exposure to refinancing risks.
