Kampala: Uganda is set to borrow €500 million (approximately $568 million) from a consortium of lenders, including the Cairo-based African Export-Import Bank (Afreximbank), to support its ongoing infrastructure projects, Finance Minister Matia Kasaija announced.
The loan request, which was tabled before Uganda’s parliament, received approval on Thursday despite firm objections from opposition lawmakers concerned about the nation’s rapidly growing debt. The move highlights Uganda’s ongoing push to fund its infrastructure agenda, even as public debt surges.
Of the total amount, €270 million will come from Afreximbank, while the remaining €230 million will be jointly provided by Ecobank Uganda and the Development Bank of Southern Africa, Kasaija informed members of parliament. However, the finance minister did not specify when the borrowing would be executed.
Opposition lawmakers raised concerns over the country’s swelling debt load, which climbed 18% in 2023 to reach $29.1 billion, largely driven by increased domestic borrowing. The escalating debt levels led to a sovereign credit rating downgrade last year, underscoring growing financial pressure on the government.
Still, Ugandan authorities maintain that these loans are vital for fueling economic expansion. Government officials argue that the debt-funded investments, especially in energy, transport, and health infrastructure, are crucial for long-term national development.
Also Read | AI Isn’t Capable of Friendship, Reid Hoffman Says in Stark Warning to Tech Industry
Kasaija did not provide further details on the specific infrastructure projects the funds would support, but analysts believe the money will likely be directed towards ongoing roadworks, energy facilities, and industrial development zones.
Also Read | Global Universities Court U.S.-Bound Students Amid Trump-Era Academic Clampdown
Uganda has consistently emphasized its commitment to infrastructure-driven growth, viewing it as a cornerstone of Vision 2040, the country’s long-term development strategy. Despite mounting debt concerns, the administration insists that responsible borrowing remains necessary to close critical infrastructure gaps.
