The World Bank has approved over $2 billion in new financing for Uganda, ending a two-year suspension that followed the country’s controversial anti-LGBTQ legislation. The funds, announced this week in Kampala by Treasury Secretary Ramathan Ggoobi, will support major infrastructure and energy projects over the next three years.
The decision marks the Bank’s formal resumption of concessional lending to Uganda and is expected to revive stalled government programmes in transport, power, and mineral development as the country prepares for elections scheduled for January 2026.
Uganda’s renewed access to World Bank funds closes a difficult chapter that began in August 2023, when the lender froze new support in response to laws imposing severe penalties on same-sex relations. The suspension cut off one of the country’s largest sources of external finance, forcing the government to delay or scale down several public investment projects.
Uganda currently owes about $5 billion to the World Bank as reported by Bloomberg, making the institution its largest single creditor. With the freeze lifted, the government now plans to reopen talks with the International Monetary Fund for a new support programme once elections are concluded.
The new package forms part of Uganda’s “tenfold growth strategy,” a long-term plan launched in 2023 to expand the economy to $500 billion by 2040 through industrialization, tourism, mineral extraction, and science-driven innovation. According to Ggoobi, the fresh World Bank financing will be directed mainly to road and bridge construction, electricity transmission networks, and renewable energy ventures, while the International Finance Corporation, the Bank’s private sector arm, is expected to channel further investment into mining and green energy enterprises.
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The resumption of concessional loans is more than a financial boost for Uganda; it represents renewed access to the global capital markets that have become vital for sustaining Africa’s infrastructure ambitions. In practice, concessional loans, which carry low interest rates and extended repayment periods, underpin much of Africa’s public development spending.
Across the continent, similar support has been central to national investment plans: in Kenya, World Bank commitments stood at about $8.9 billion this year; in Nigeria, over $11 billion; and in Ethiopia, roughly $7 billion. Uganda’s return to the list of active borrowers restores a key source of growth funding at a time when domestic revenues remain under strain and debt servicing costs continue to rise.
The decision also renews debate over how international lenders weigh social policy against economic priorities. The World Bank justified its earlier freeze as a response to discrimination, noting that its lending principles prohibit exclusion in Bank-funded projects. By reinstating support, the institution appears to have accepted new safeguards that ensure project-level compliance with non-discrimination standards, while allowing the Ugandan government to pursue its development agenda. The compromise reflects a broader challenge in development finance: how to maintain ethical oversight without undermining local ownership of national policy.
For Uganda’s economy, the timing is critical. Public infrastructure investment accounts for more than a third of the national budget, and delays over the past two years have slowed growth to an estimated 4.5 per cent, down from 6 per cent before the funding freeze.
The new financing could lift annual growth closer to 6.2 per cent by 2026, according to projections from the Ministry of Finance, largely driven by construction, energy, and export manufacturing. However, analysts warn that without strong oversight, the renewed inflows could add pressure to Uganda’s rising debt load, which stood at about 53 per cent of GDP this year.
The sustainability dimension is equally significant. Uganda’s infrastructure expansion, from roads to transmission lines, will require careful management to avoid environmental degradation, particularly in ecologically sensitive regions such as Karamoja and the Albertine Graben.
Renewable energy investments present an opportunity to offset this risk if prioritised effectively. Currently, only about 58 per cent of Ugandans have access to electricity, and large portions of rural households rely on biomass. With the new funding, the government aims to raise energy access to 80 per cent within five years, a move that could reduce deforestation and carbon emissions across key agricultural regions.
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Across Africa, the Uganda deal may serve as a signal that international financial institutions are willing to re-engage with governments once governance conditions improve or compliance mechanisms are strengthened. The wider implication is that access to global concessional finance remains contingent on maintaining credibility with donors.
Countries like Ghana and Zambia, both recovering from debt crises, are likely to watch closely how Uganda balances its fiscal commitments with renewed borrowing.
Uganda’s reinstatement into World Bank financing circles shows that while policy disputes can strain partnerships, transparent reforms and stable project management can restore investor confidence.
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