Uganda to borrow €500M for infrastructure development from three lenders, including Afreximbank, as confirmed by Finance Minister Matia Kasaija. The announcement followed parliamentary approval on Thursday, despite objections from opposition lawmakers over the nation’s growing debt burden.
According to Minister Kasaija, Uganda plans to borrow €270 million from the African Export-Import Bank (Afreximbank), headquartered in Cairo. The remaining €230 million will come jointly from Ecobank Uganda and the Development Bank of Southern Africa (DBSA).
While Kasaija outlined the loan sources and purpose, he did not specify when the borrowing will take place. The funds will reportedly finance various infrastructure projects aimed at boosting economic growth.
Uganda’s public debt continues to rise. The Finance Ministry reported that the country’s total debt stock grew by 18% last year, reaching $29.1 billion. This increase was largely driven by domestic borrowing, prompting credit agencies to downgrade Uganda’s credit rating in 2024.
Despite concerns, government officials maintain that the borrowed funds are critical for long-term development. They argue that infrastructure investment remains key to unlocking economic potential, especially in transportation, energy, and urban development.
However, opposition lawmakers raised red flags over the country’s rising debt levels. They criticized the government for what they see as unsustainable borrowing without corresponding improvements in service delivery. Some MPs warned that future generations would bear the burden of today’s financial decisions.
Nonetheless, Parliament approved the request, citing the need to finance urgent national infrastructure priorities. Supporters of the move believe the projects funded through this borrowing will stimulate job creation, enhance trade, and support Uganda’s Vision 2040 development agenda.
As Uganda prepares to tap into these international loan facilities, the government will likely face increased pressure to ensure transparency, value for money, and effective debt management. Development experts have urged Kampala to maintain fiscal discipline while seeking concessional terms for future loans.
With the Uganda to borrow €500M for infrastructure plan now approved, attention shifts to project implementation and loan disbursement. Citizens and watchdog groups are expected to closely monitor how these funds are spent.