Permanent Secretary and Secretary to the Treasury (PSST), Dr. Ramathan Ggoobi says Uganda must invest in climate adaptation and resilience to safeguard its development gains and maintain its creditworthiness. Courtesy photo
Ministry of Finance, Planning and Economic Development (MoFPED) is integrating the economic and fiscal benefits of resilience investments into its debt sustainability analysis (DSA).
The initiative aims to demonstrate, in practical terms, how resilience investments contribute to economic growth, improved fiscal outcomes and enhanced creditworthiness, while also providing a basis for broader reforms in sovereign risk assessment.
This interim report outlines a practical approach for making the returns on resilience investments visible within sovereign debt dynamics and credit profiles. By recognising these gains, countries like Uganda can unlock the capital flows needed to finance sustainable development and climate adaptation efforts.
Climate-related risks are increasingly being reflected in debt sustainability analyses and sovereign credit ratings. As these risks intensify, borrowing costs tend to rise while fiscal space becomes more constrained.
Agriculture and agro-industrialisation, which are central to Uganda’s Tenfold Growth Strategy, remain highly vulnerable to climate change and nature degradation. This poses a significant threat to sustained economic growth.
According to the Permanent Secretary and Secretary to the Treasury (PSST), Dr. Ramathan Ggoobi, Uganda must invest in climate adaptation and resilience to safeguard its development gains and maintain its creditworthiness. He said such investments are critical for strengthening the country’s long-term resilience against climate, environmental and terms-of-trade shocks.
“The international financial system does not yet adequately recognize adaptation and resilience investments. Sovereign risk assessments, which influence investment decisions, access to finance and the cost of capital, often capture only the upfront fiscal costs of these investments without fully reflecting their long-term benefits,” Dr. Ggoobi said.
As a result, he noted, borrowing costs may increase and fiscal space may shrink precisely when countries are making investments that reduce future risks. This makes it more difficult for countries like Uganda to finance resilience-building measures on affordable terms.
For Uganda, the move could help strengthen the case for recognising resilience investments as part of the country’s long-term economic and fiscal strategy. If these investments are reflected in sovereign risk assessments, Uganda could improve its access to affordable financing, particularly for climate adaptation and development projects. This would support efforts to protect key sectors such as agriculture, strengthen economic stability and advance the country’s Tenfold Growth Strategy.
“Our hope is that other countries will build on this work and join us in making the case for resilience investment. Together, we can help ensure that relevant institutions recognise investment in resilience not just as a fiscal cost, but as an investment in sustainable growth, stability and development,” Dr. Ggoobi added.
Uganda, which serves as Co-Chair of the Coalition of Finance Ministers for Climate Action, is the first country to apply this approach, providing an example of how the benefits of adaptation and resilience measures can be incorporated into sovereign risk assessments.
