Uganda is set to receive over US$2 billion in fresh concessional financing from the World Bank Group over the next three years, signalling the restoration of full financial support after a suspension that lasted about two years. The announcement was confirmed by the country’s Ministry of Finance, Planning and Economic Development in a statement following the 2025 IMF/World Bank Annual Meetings held in Washington, D.C.
The World Bank suspended new funding to Uganda in 2023 after the government enacted the Anti-Homosexuality Act, which was widely condemned by international partners as discriminatory. The Bank halted the processing of all new public-sector loans pending a review of the country’s safeguards and inclusion mechanisms, citing misalignment with its global commitment to non-discrimination and human rights.
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Two years on, the Bank’s return represents a significant turning point, one that underscores the delicate balance between governance standards, national sovereignty, and development priorities. Uganda’s renewed access reflects what officials describe as a “realignment of policy frameworks” and improved assurances on social inclusion safeguards, project transparency, and fiscal discipline. According to Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury, “concessional financing is back,” with the Bank’s overall investment in Uganda now standing at US$4.9 billion.
The renewed partnership marks a major milestone in Uganda’s economic narrative, aligning with the World Bank’s new development framework under President Ajay Banga, which focuses on empowering the private sector and financing growth-enabling infrastructure. For Uganda, this injection is expected to finance roads, energy transmission, ICT, water, agriculture, and social protection projects, a comprehensive investment drive designed to unlock productivity and attract private investment.
The World Bank’s latest approach, as outlined by President Banga, shifts emphasis from project-based funding to building the conditions that allow private enterprise to thrive. This realignment dovetails with Uganda’s own growth vision to create jobs through infrastructure expansion, skills development, and industrial diversification.
Where the Billions will flow
The new financing will be directed into an extensive list of infrastructure and social projects: road and bridge construction, electricity transmission and last-mile distribution, infrastructure development in regional cities, ICT systems, education, agriculture, water and irrigation, and export-guarantee schemes. The funding will also support skills development and social protection programmes, aligning with Uganda’s Tenfold Growth Strategy, which prioritises investments in technology and productivity-enhancing sectors.
The International Finance Corporation (IFC), the private-sector arm of the World Bank Group, is also stepping in with “patient capital” to fund ventures in renewable energy, minerals, agro-industrialisation, science and innovation, while co-investing with the government in state-owned enterprises (SOEs). This blend of concessional and private financing reflects a broader shift in global development finance, where multilateral institutions are emphasising blended-finance mechanisms to attract private capital to strategic sectors.
Policy Shifts that Unlocked the Purse
Uganda’s return to the World Bank’s lending portfolio was not automatic. It followed months of engagement and structural reforms. Officials from the Finance Ministry confirmed that the government has been negotiating a new Extended Credit Facility (ECF) with the IMF, targeting key reforms such as improved domestic revenue mobilisation, tighter budget controls, and stronger financial-sector regulation.
Reuters reports that the World Bank’s decision also followed assurances regarding governance, fiscal transparency, and project implementation capacity. By aligning its policies with global development-finance standards, Uganda effectively rebuilt trust and reopened the door to concessional funding.
The Domestic Borrowing Reprieve
The renewed World Bank support comes at a critical moment for Uganda’s fiscal management. The country’s 2025/26 budget projects a 53.9 percent reduction in domestic borrowing, cutting it to about UGX 4.01 trillion (US$1.09 billion), and an overall spending reduction of over 20 percent to UGX 57.4 trillion (US$15.56 billion). With cheaper World Bank loans back on the table, Uganda can now ease pressure on the domestic credit market, potentially lowering interest rates and freeing space for private-sector borrowing.
Economists suggest this shift could also stimulate local investment by reducing government competition for domestic funds, thus easing liquidity constraints on commercial banks. This is consistent with the IMF’s emphasis on improving budget efficiency and strengthening private-sector growth.
Growth, Oil and Opportunity
Uganda’s economic future appears promising. The country is among Africa’s fastest-growing economies, maintaining GDP growth above 5 percent in 2024 and projected to accelerate as oil production begins in mid-2026. With a stable macroeconomic environment and improved infrastructure financing, Uganda is positioning itself to become a regional economic hub.
The new World Bank support complements these ambitions by ensuring that growth is inclusive, sustainable and technology-driven. If effectively implemented, it could transform Uganda’s infrastructure landscape, enhance digital and energy access, and catalyse private investment across key sectors.
A New Dawn for Partnership
Ultimately, the World Bank’s renewed commitment to Uganda is more than just a funding agreement, it is a statement of renewed confidence. For Kampala, it reflects the dividends of reform; for the Bank, it reaffirms a belief in Uganda’s potential to sustain inclusive growth through policy discipline and innovation.
As the world’s development financiers redefine their playbooks, Uganda stands as a case study in how recalibrating domestic policy, embracing accountability, and aligning with global frameworks can unlock billions, and, more importantly, open a new chapter of economic possibility.
