Uganda’s Debt interest burden is a classic warning signal

The graph in Figure 1 shows Uganda's government interest payments in UGX billions from 2011 to the present, based on data from the Ministry of Finance, Planning, and Economic Development.

The picture it paints is unmistakable and deeply concerning. From modest levels around 50 billion UGX in the early 2010s, interest rate payments have surged on a volatile yet relentlessly rising trajectory. By 2024-2025, we see annual interest costs surging to 1000 billion UGX, with peaks approaching 1700 billion and beyond. The recent sharp spikes and oscillations are particularly alarming; they suggest not only a rapidly growing debt stock but also exposure to variable interest rates or exchange-rate pressures on external borrowing.

Figure 1: Uganda Government debt interest payments

This is a classic illustration of how public debt, once allowed to accumulate, can feed on itself. Interest payments become an ever-larger share of the budget, crowding out productive spending on infrastructure, education, health, and private-sector enabling investments. When debt service begins to consume an ever-larger share of government revenue, as it already appears to be happening in Uganda, the fiscal position becomes precarious. Markets notice that borrowing costs can rise further, and the economy risks falling into a debt trap from which escape is painful.

In both developed and developing economies, high and rising real interest burdens on public debt are not merely a bookkeeping matter. They reflect deeper monetary and fiscal imbalances. If the growth of the debt stock has been financed by expanding the money supply too rapidly, or if borrowing has been used to sustain consumption and current spending rather than high-return capital formation, the result is precisely the pattern we see here: accelerating nominal interest obligations.

For Uganda, the implications are serious. A situation in which debt interest payments are rising so steeply relative to the likely growth of the tax base risks undermining macroeconomic stability, pressuring the shilling, and constraining the government’s room for maneuver. Policymakers must assess whether the current path is sustainable. Prudent debt management, including favoring concessional financing where possible, improving revenue mobilization without damaging incentives, and ensuring that new borrowing genuinely finances growth-enhancing projects, is essential. Above all, monetary policy must remain disciplined so that inflation does not erode credibility or compound the real burden.

Such a valuable act of public service, making these trends visible clearly and dramatically, is threatened by the ambiguous Clause 13 of the Sovereignty Bill, 2026. The clause will instead sabotage economic progress by blocking access to high-quality data and opinions that should inform national debate about fiscal responsibility and long-term economic strategy before the interest burden becomes even more dominant.