Uganda's Strategic Debt Trim: Balancing Growth and Fiscal Responsibility

Uganda plans a 21.1% cut in domestic debt issuance for the 2026/27 fiscal year to manage its public debt. This decision aims to alleviate the burden of interest payments and ensure resources are available for growth-focused initiatives, supported by expected oil production revenue.

Uganda is set to reduce its domestic debt issuance by 21.1% in the financial year commencing in July 2026. This move is aimed at addressing the nation's escalating public debt, as announced in a budget paper released by the finance ministry.

The adjustment will see the issuance of Treasury bills and bonds decrease to 9 trillion shillings, down from 11.4 trillion shillings the previous year. This reduction seeks to prevent private sector crowding out, curb the rising debt-to-GDP ratio, and tackle the mounting burden of interest payments.

Public debt's share of GDP has risen from 46.8% to 51% over the last year. With the country's economic growth projected to reach 10.4% by 2026/27, driven by the introduction of oil production, the government is focused on ensuring fiscal space for growth-enhancing investments.