Uganda's External Debt Rises 16% to $23.9 Billion

Uganda's external debt stock has increased significantly, rising by 15.9 per cent to US$23.9 billion in 2025, up from US$9.8 billion in 2015. This information is based on the World Bank's International Debt Report 2026, which provides a comprehensive overview of the country's external debt obligations. The report highlights that the external debt stock includes public and publicly guaranteed debt, private-sector borrowing, and short-term external debt.

The breakdown of Uganda's external debt stock reveals that public and publicly guaranteed debt accounted for US$19.537 billion, while private nonguaranteed debt stood at US$3.738 billion, and short-term debt was US$624 million. Multilateral institutions were the largest source of public and publicly guaranteed external financing, accounting for US$11.703 billion. The World Bank's International Development Association (IDA) was the largest individual multilateral creditor, with US$5.433 billion.

Bilateral creditors, including China and France, accounted for US$3.602 billion and US$385 million, respectively. Private creditors held US$4.232 billion. The terms attached to financing from different creditors vary considerably, with private borrowing generally carrying higher interest rates and shorter grace periods than loans from official lenders. In 2025, new commitments from private creditors carried an average interest rate of 8.7 per cent, compared with 2.6 per cent for official creditors.

The World Bank's country profile highlights that the gap between the interest rates offered by private and official creditors widened to 5.5 percentage points in 2025. This reflects the increasingly expensive terms on which lower-income countries are accessing private capital markets. Foreign investors also hold a significant amount of Uganda's domestic government debt, with US$2.8 billion in domestic-currency government debt held by non-residents.

The report draws attention to the attraction of Uganda's relatively high-yield government securities to foreign investors. However, it also raises questions about the extent to which government financing depends on continued investor appetite and what could happen if that appetite changes. Changes in global interest rates, investor confidence, or perceptions of risk could influence demand for government securities and the cost at which the government raises money.

The World Bank's debt ratios provide a more nuanced picture of Uganda's ability to manage its external obligations. In 2025, external debt stood at 39 per cent of gross national income, while debt service represented 4 per cent of GNI. External debt was equivalent to 145 per cent of exports, and debt service accounted for 13 per cent of exports. Compared with 2015, the report shows a 0.3 per cent increase in the external debt-to-GNI ratio and an 18.1 per cent increase in the debt-service-to-GNI ratio.

Uganda's figures come against a backdrop of rising debt across developing economies. The World Bank's International Debt Report 2026 says the external debt stock of developing countries reached a record US$9.4 trillion in 2025, following a 5.5 per cent increase during the year. The report highlights the need for careful management of external debt obligations to ensure that countries can meet their development priorities while maintaining a stable financial position.

Key points

• The World Bank's International Debt Report 2026 highlights Uganda's rising external debt stock and the need for careful management of external debt obligations.
• Multilateral institutions were Uganda's largest source of public and publicly guaranteed external financing, accounting for US$11.703 billion.
• The gap between the interest rates offered by private and official creditors widened to 5.5 percentage points in 2025.