Uganda’s FX reserves dropped by 12% from June 2023 to January 2024 due to debt repayments and challenges in purchasing foreign exchange, influenced by the depreciating Ugandan shilling. This decrease has left reserves at just 3.4 months of import coverage, below the central bank’s target of 4 months. Uganda’s public debt, which is predominantly external, poses a threat to fiscal stability and has significant implications for the country’s budget allocation to education and health.