Parliament has approved a government request to borrow €500 million, comprising €270 million from Afreximbank and €230 million from Ecobank Uganda and the Development Bank of Southern Africa (DBSA) to finance the 2024/2025 national budget. But the decision has sharply divided lawmakers, igniting a heated debate over rising debt, transparency, and legal compliance.
The vote comes as Uganda’s public debt hits US$25.55 billion, prompting concern from Members of Parliament (MPs) who say the country is borrowing recklessly without ensuring that funds are efficiently absorbed or allocated.
“We have a number of pending invoices. The contractor is on the road. “He has to be paid,” said Finance Minister Matia Kasaija, tabling the motion. “If we do not pass these loans, we are going to default.”
Opposition MPs challenged the loan’s legality, timing, and purpose. Hon. Muhammad Muwanga Kivumbi (NUP, Butambala County) described the process as “unconstitutional” and accused the government of using “post-mortem approval” tactics.
“The President clearly stated that borrowing should only be for security, infrastructure, and human capital, not recurrent expenditure. “So is the minister serious when he says this loan is to pay wages?” Kivumbi asked.
He also decried poor fiscal discipline, pointing out that UGX 16 trillion in borrowed funds remains undisbursed, yet taxpayers are already servicing interest on idle loans.
“One reason the Auditor General keeps highlighting is Parliament’s failure to attach proper conditions to these loans,” he added.
Hon. Theodore Ssekikubo (NRM, Lwemiyaga County) demanded clarity on what he called hidden loan conditions, including management, agency, and commitment fees.
“There’s a middle entity called the agent who is going to get free money. He arranges the loan and takes a cut. “Can we unpack this?” Ssekikubo asked. “We’re not saying don’t borrow, but don’t ambush Parliament at the last minute.”
Hon. Karim Masaba (Indep., Mbale City Industrial Division) raised legal concerns under the Public Finance Management Act, insisting that Parliament was violating procedure by approving the loan after passing the annual budget.
“We are breaking the law by passing it now,” Masaba warned.
In response, government leaders defended the urgency of the loan, blaming protracted negotiations with lenders for the delay.
“Some of this money is intended for Supplementary Schedule No. 3, which was already approved by Parliament,” said Government Chief Whip Denis Hamson Obua.
Hon. Eddie Kwizera (NRM, Bukimbiri County) questioned the Finance Ministry’s planning capabilities.
“Do they even plan? If they did, they should have given Parliament adequate time,” Kwizera said.
Speaker Anita Among acknowledged MPs’ frustrations but sided with the urgency of securing funds.
“There is no money. So can we agree that, since we do not have money, nobody should be paid a salary? “Should we stop building roads?” she asked rhetorically, urging MPs to approve the loans for continuity of government functions.
According to the motion:
• The Afreximbank loan carries an effective interest rate of 7.33%
• The Ecobank loan is at 7.28%
• The DBSA loan is at 7.18%
Although the rates are relatively moderate, MPs raised concerns about long-term repayment obligations, loan servicing costs, and diminishing fiscal space for future budgets.
While the loan was ultimately approved, the debate exposed growing tensions over Uganda’s rising debt load, lack of fiscal discipline, and executive overreach in public borrowing.
Opposition MPs argue the government is rushing Parliament into approving loans without proper scrutiny, while the executive insists the funding is essential to avoid payment defaults and keep development projects on track.
As Uganda’s debt climbs, the pressure mounts on Parliament to demand greater accountability, timely planning, and transparent loan terms, before it’s too late.