Uganda will cut external borrowing by 98% in the financial year to June 2026 to reduce its increasing public debt, according to the finance ministry.

Uganda's public debt, which rose to $25.6-billion in June this year from $23.7-billion a year earlier according to finance ministry data, has elicited anger from Uganda opposition politicians and also triggered credit rating downgrades.

The government says borrowing has been used to drive economic growth, which has been faster than many of its African peers since the Covid-19 pandemic.

External borrowing will decline to just 29.9-billion Ugandan shillings ($8.15-million), down from 1.394-trillion shillings, the ministry of finance said in a post on the X social media platform late on Tuesday.

In September, the ministry said it planned to slash overall spending by over a fifth to 57.4-trillion shillings in 2025/26 compared with 72.1-trillion shillings planned for the present financial year.

The finance ministry also said they will slash domestic borrowing via Treasury bonds as well in the next financial year, with planned debt issuance expected to fall 54% compared with the previous period.