Public debt can be an important tool for financing development, but Uganda must ensure that borrowed resources are invested efficiently enough to generate the economic and social returns needed to sustain growth, a public debt expert has warned.
Speaking during the Young Women’s Space on Public Debt and Exchange Rate, Hilda Tumuhe, Program Officer for Debt and Aid at SEATINI Uganda, said Uganda’s continued reliance on borrowing is largely driven by a gap between domestic revenue and the country’s growing expenditure and investment requirements.
Her remarks highlight a central dilemma facing Uganda’s development financing strategy: borrowing can accelerate economic transformation when it funds productive investments, but it can become a burden when borrowed money fails to generate sufficient returns.
Over the years, public borrowing has helped finance major investments in transport infrastructure, energy, health, education and other sectors considered critical to improving productivity, strengthening human capital and supporting long-term economic growth.
But Tumuhe cautioned that the value of borrowing cannot be measured simply by the projects it finances or the amount of money raised.
The more important question, she argued, is whether the borrowed resources are being efficiently allocated, properly implemented and translated into tangible benefits for citizens.
The real question is what Uganda gets for its debt
Uganda’s debt debate has often focused on how much the country owes and whether its debt levels remain sustainable. Yet the quality of spending is equally important.
Borrowing to build infrastructure that expands economic activity, improves connectivity or strengthens productive capacity can potentially support future revenues and economic growth. By contrast, borrowing for projects that suffer from delays, cost overruns, weak implementation or limited economic impact can leave taxpayers with repayment obligations without the expected benefits.
This makes public investment management a critical part of Uganda’s debt strategy.
For every loan contracted, the country must ultimately answer four questions: What is the money financing? How efficiently is it being used? What economic or social returns will it generate? And who benefits?
These questions become particularly important as debt servicing competes with other demands on the national budget.
Why young women should care about public debt
Tumuhe’s message also places public debt within a broader question of opportunity for Uganda’s young population, particularly young women.
Development financing is not an abstract matter confined to government budgets and financial institutions. The way borrowed money is spent can influence access to roads, electricity, education, healthcare, digital infrastructure, markets and employment.
For young women, productive public investment can help create the conditions necessary to start businesses, access markets, acquire skills and participate more fully in the economy.
The opposite is also true. When public resources are poorly invested, citizens can bear the cost through constrained public services, higher fiscal pressures and fewer opportunities.
That is why Uganda’s borrowing conversation needs to move beyond the question of how much the country borrows to a deeper examination of what it borrows for and what that borrowing delivers.
From borrowing to value creation
Uganda’s development challenge is therefore not simply to mobilise more financing. It is to ensure that every borrowed shilling is connected to a credible development outcome.
This requires stronger scrutiny of projects before loans are contracted, better implementation once financing is secured, greater transparency over how funds are spent and rigorous assessment of whether completed investments are delivering the promised results.
Ultimately, public debt becomes economically meaningful when it helps expand the country’s productive capacity faster than the obligations created by borrowing.
For Uganda, the test is increasingly clear: borrowing should not merely finance development projects; it should produce development returns.
And for a young generation seeking jobs, businesses, skills and better public services, the question is not simply whether Uganda is borrowing. It is whether today’s borrowing is building the economy they will inherit tomorrow.
