KAMPALA, Sept 19 (Reuters) – Uganda’s public debt has escalated significantly, increasing by 26.2% during the 2024/2025 financial year, as revealed in the finance ministry’s annual public debt report released on Friday. The total public debt climbed to $32.3 billion in the twelve months leading up to June, up from $25.6 billion in the previous year. This surge is largely attributed to the government’s intensified domestic borrowing to finance its expansive infrastructure projects in sectors such as energy and transportation. President Yoweri Museveni’s administration has been heavily investing in these areas, leading to a rapid accumulation of debt. The central bank and other financial experts have expressed concerns that the rising debt servicing costs are depleting resources essential for critical sectors like education and health. The report highlighted that domestic borrowing grew by 52.7%, significantly outpacing the 6.2% increase in external credit. This shift towards domestic borrowing has not only inflated the nominal debt stock but also escalated the cost of debt due to higher yields demanded by the local market. Consequently, the country’s debt as a percentage of GDP rose to 51.3% from 46.9% in the previous period. The report underscores the challenges Uganda faces in balancing its ambitious development goals with sustainable financial practices.