Uganda opens talks with IMF on a new credit facility as debt surges to $29.1bn. Elections in 2026 will shape approval timing.
Uganda in Talks for New IMF Loan as Debt Soars
Uganda has entered negotiations with the International Monetary Fund (IMF) for a new funding programme after the expiry of its previous $1 billion Extended Credit Facility in 2024. The East African nation is under pressure as rising debt and higher financing costs strain the economy.
Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury, confirmed the talks during a meeting with diplomats in Kampala.
“Uganda is currently negotiating a new Extended Credit Facility Program with the IMF,” Ggoobi said.
Mounting Debt Burden
The last three-year programme, approved in 2021, expired in September 2024 after $870 million was disbursed. The IMF cited “implementation challenges compounded by external funding constraints” as reasons for its lapse.
According to Finance Ministry data, Uganda’s public debt rose 17.8% in 2024 to $29.1 billion, lifting the debt-to-GDP ratio to 52.1% from 49.9% a year earlier.
With limited access to foreign credit, the government turned to the domestic market, pushing up interest rates and squeezing private-sector lending. Local borrowing and refinancing now make up $5.8 billion — about one-third of the 2025/26 budget.
Uganda will spend $2.8 billion on domestic interest payments this year, compared to $450.7 million for external debt.
IMF Deal Expected in 2026
The new IMF programme is likely to be finalized after Uganda’s 2026 general elections.
“The program is expected to be presented to the IMF Board after the general elections early next year,” Ggoobi told diplomats.
Analysts say the delay is both political and technical, with the IMF seeking credible fiscal reforms. If approved, the programme could ease funding pressures and restore investor confidence. If not, Uganda risks deeper reliance on costly domestic borrowing.
World Bank Funding Restored
Meanwhile, the World Bank resumed support in June 2024 after a two-year freeze tied to Uganda’s anti-LGBTQ law, which drew global criticism.
“Our relationship with the World Bank is now fully restored,” Ggoobi noted.
Fresh disbursements have already begun, with new concessional loans allocated to transformative projects across the country.
