Uganda’s Shs33.4 Trillion Debt Bill Tests Its Freedom to Spend

Uganda has set aside about Shs33.4 trillion in its 2026/27 national budget to service debt—money that cannot be used for other public priorities. As the country prepares to mark 64 years of political independence, that bill is sharpening a debate over how much freedom the government has to finance its own development, according to Nile Post Uganda (direct).

The issue is not simply whether Uganda can repay its creditors. Economists cited by the outlet say the harder question is what the country gives up to keep those payments flowing. Borrowing can help build infrastructure and fund investments that produce economic returns. But when repayments absorb a growing share of government resources, they can leave less room for the spending that supports development.

A debt test beyond repayment

Uganda’s public debt reached Shs136.06 trillion at the end of June 2026, according to Ministry of Finance figures reported by Nile Post Uganda. That amounted to 54.3% of gross domestic product, the measure of the economy’s output. Domestic debt accounted for Shs76.32 trillion, while external debt stood at Shs59.74 trillion. The figures put the scale of the government’s obligations at the centre of the independence debate.

Economist Fred Muhumuza challenged how Uganda’s debt sustainability—its ability to meet debt obligations—is being assessed. He said earlier warnings had treated debt above 50% of economic output as a source of vulnerability, and questioned why the current debt burden was being described as sustainable. His broader argument was that meeting repayment commitments does not, by itself, show whether those commitments leave enough money for development.

For Muhumuza, the practical test of independence is the ability to make decisions that meet a country’s needs. That requires enough resources under domestic control to pay for national priorities, rather than political sovereignty alone. His warning shifts the focus from whether the government is paying its bills to how much freedom remains after it does so.

“Independence is not that we lowered and raised the flag. It is, do you have the freedom to make decisions that meet your own needs?” — Fred Muhumuza

The challenge of financing national priorities

Muhumuza also warned that heavy reliance on borrowing could expose Uganda more closely to the conditions and obligations attached to loans. Those commitments could narrow the government’s policy choices in some areas. The concern is therefore both financial and practical: debt must be repaid, but the terms of borrowing can also influence the room available for independent decisions.

The economists called for stronger domestic revenue mobilisation—raising more public income at home—and better management of public investments. They also urged Uganda to direct borrowed money into projects that deliver economic and social benefits. Their warning was conditional: development financing could be undermined if borrowing keeps growing faster than domestic revenues and productive investment.

Uganda’s independence anniversary, marking its political sovereignty since October 9, 1962, provides the backdrop for that assessment. What to watch next is whether domestic revenues and returns from public investment can keep pace with borrowing, and whether the cost of servicing debt leaves enough space to finance the country’s own priorities.