By Uganda’s Parliament has greenlit government plans to borrow €500 million (approximately UGX 2.1 trillion) from three financial institutions to support the 2024/2025 national budget, despite mounting objections from opposition MPs and concerns over the country’s rising debt burden.
Latest
Naguru Barracks Cop Shot Dead by Colleague, Suspect on the Run
Police Assures Pilgrims Of Safety As Namugongo Celebrations Kick Off
Two Nabbed For Wearing Army Uniforms To Evict Ibanda Residents
Defence Lawyers Slam Court For ‘Evading Duty’ After Besigye Denied Mandatory Bail
Bobi Wine Pays Tribute to Prof. Ngũgĩ wa Thiong’o: “A Revolutionary Storyteller And Son of Africa”
Nakawa Magistrate Takes Brief Recess to Consider Besigye’s Mandatory Bail Application
Ngũgĩ wa Thiong’o, African Literary Legend, Dies at 87
The approved loans include €270 million from the African Export-Import Bank (Afreximbank) and €230 million from a consortium of Ecobank Uganda and the Development Bank of Southern Africa (DBSA). The motion was presented by Finance Minister Matia Kasaija during a plenary session on Thursday, 29 May 2025.
Kasaija defended the emergency borrowing, citing pending invoices and financial pressures that government must meet before the end of the current financial year.
“We are in a financial crunch. Contractors are on the ground, and payments must be made now. If Parliament doesn’t approve this borrowing, we risk defaulting on our obligations,” Kasaija warned.
The finance minister blamed delays in loan negotiations with lenders for the late presentation to Parliament, saying that ideally, the loans would have been secured months earlier.
However, lawmakers from both the opposition and ruling party raised sharp criticism about the timing, legality, and purpose of the loans.
Butambala County MP Muhammad Muwanga Kivumbi (NUP) accused the government of financial mismanagement and violating the Public Finance Management Act by bringing the loan request after the budget had already been approved. “This is postmortem borrowing. We are approving money that was already spent. It is unconstitutional,” he said.
He noted that the government continues to borrow excessively, with an estimated UGX 16 trillion in undisbursed loans accumulating interest. “We are paying for loans that are not being used. It’s a complete financial disaster,” he added.
Lwemiyaga County MP Theodore Ssekikubo (NRM) raised alarm over hidden loan charges. “We have agency fees, commitment fees, base and commercial tranches — all of which reduce the actual amount received. We are enriching middlemen at the expense of taxpayers,” he said.
Mbale City MP Karim Masaba (Indep.) also questioned the legal standing of the motion. “According to the PFMA, this borrowing should have been presented before the next financial year’s budget was passed. By doing it now, we are breaking the law,” he argued.
Government Chief Whip Denis Hamson Obua acknowledged the concerns but explained that delays in finalising negotiations with lenders left them with no choice but to act now. He said part of the funds would support activities under Supplementary Schedule No. 3, which Parliament had already approved.
Speaker of Parliament Anita Among appealed for pragmatism, pointing out the urgency of financing government operations. “If there is no money, are we saying we won’t pay salaries? Should we stop road construction?” she posed to MPs.
Bukimbiri County MP Eddie Kwizera (NRM) questioned the Finance Ministry’s foresight. “This is the ministry tasked with planning the economy — yet they seem caught off guard every time,” he said.
Read Also
Lt Gen Elwelu, Six Other UPDF Generals Begin Retirement Process
Museveni Rallies Great Lakes Leaders To Reject Foreign Meddling, Embrace African Unity
Third Suspect in Lira Land Bribery Scandal Remanded Over UGX 70M Fraud Plot
UEDCL Targets Vandalism, Vows To Lower Tariffs And Replace Faulty Meters
Police Intervene As Fistfights Rock DP Offices Days To Delegates Conference
Why Bobi Wine Trusts Joel Ssenyonyi And David Lewis Rubongoya
UPC Calls For Moral Revival Ahead Of Uganda Martyrs Day Celebrations
The approved loans come with interest rates ranging between 7.18% and 7.33%, depending on the lender. As of June 2024, Uganda’s public debt stood at USD 25.55 billion, raising fresh concern over sustainability and the long-term burden on taxpayers.
While the government insists the borrowing is necessary to avert fiscal crisis, opposition figures warn that it signals a troubling pattern of poor planning and unaccountable spending.
