• Uganda to secure €500M from Afreximbank, Ecobank, and DBSA for infrastructure
• Rising domestic costs and limited concessional funding drive borrowing shift
• Public debt reached $29.1B by end-2024, up 18% year-on-year

Facing rising domestic borrowing costs and reduced access to concessional loans, Uganda plans to borrow €500 million ($567 million) from three regional banks to fund infrastructure development, Finance Minister Matia Kasaija announced on May 29, 2025.

Speaking to parliament, Kasaija detailed that €270 million will come from the African Export-Import Bank (Afreximbank), while €230 million will be jointly provided by Ecobank Uganda and the Development Bank of Southern Africa (DBSA). Lawmakers approved the loans despite concerns from the opposition over Uganda’s growing debt levels.

Data from the Ministry of Finance indicates that the country’s total public debt stock rose by 18% over the past year, reaching $29.1 billion as of December 31, 2024. The increase is largely attributed to a rise in domestic borrowing, which has strained government finances and impacted Uganda’s credit standing.

In August 2024, Fitch Ratings downgraded Uganda’s long-term foreign currency issuer rating from ‘B+’ to ‘B’. The agency cited high fiscal financing needs, increased domestic borrowing costs, a weakening interest-to-revenue ratio, reduced concessional funding, and declining foreign exchange reserves.

Earlier in May 2024, Moody’s also downgraded Uganda’s sovereign rating from ‘B2’ to ‘B3’, noting tighter access to debt markets and shrinking financing options.

According to the International Monetary Fund (IMF), Uganda’s debt-to-GDP ratio is projected to reach 52.7% by June 2025. The new borrowing is intended to support infrastructure development while managing short-term fiscal pressures.