Uganda, having assumed the 2025 co-chairmanship of the Coalition of Finance Ministers for Climate Action, plans to update its Debt Sustainability Analysis (DSA) to incorporate climate change-related shocks and investments that may affect the country’s debt profile.

Dr. Sam Mugume Koojo from the Ministry of Finance and Uganda’s co-chair of the coalition, emphasised recently that the current DSA framework does not account for climate change impacts—an oversight that could obscure the full cost of borrowing and the country’s debt affordability. “Understanding how climate shocks influence our debt dynamics is critical,” he noted during a recent meeting at EPRC offices at Makerere University.

During Uganda’s two-year co-chairmanship alongside the Netherlands, the Economic Policy Research Centre (EPRC) will lead research efforts. The Centre’s research will support the coalition’s broader agenda, and some work will contribute to the updated DSA. The research will focus on the economic impacts of climate change, associated costs, and adaptation strategies.

The annual DSA, produced annually by the Directorate of Debt and Cash Policy within the Ministry of Finance, evaluates Uganda’s public debt sustainability over the medium to long term, considering factors such as projected economic growth, anticipated oil production revenues, and borrowing requirements.

Dr. Sarah Ssewanyana, EPRC Executive Director, said the opportunity will assist in capacity building for the Centre’s staff.

Ministry of Finance and EPRC officials during a recent meeting at EPRC

Uganda officially took on the co-chairmanship during the 2025 Spring Meetings of the World Bank Group and the International Monetary Fund held in Washington, D.C.

Climate change and extreme environmental events increasingly affect the cost and viability of infrastructure projects, underscoring the need for evidence-based strategies to help countries respond effectively.

The September 2025 World Bank Group’s country climate and development report (CCDR) for Uganda highlighted serious risks from climate change, including a drop in overall labour productivity due to heat stress, threats to the electricity network, and annual road damages costing billions of shillings.

Incorporating these risks in the annual DSA gives Uganda a true picture of debt landscape.