The maximum-security Luzira prison in the capital Kampala houses more than 8,000 male and female inmates as well as 2,600 staff, according to parliament records this year.
"On August 13, 2024 the National Water and Sewerage Corporation disconnected water services to the Luzira prisons complex due to outstanding water bill," Ugandan prisons service spokesman Frank Baine said in statement on Monday.
He said the service was in arrears to the tune of about $4.8 million.
"The situation is a matter of national concern," Baine said.
Negotiations were ongoing between the prison service, the ministries of finance and planning and economic development, and the National Water and Sewerage Corporation to resolve the crisis.
In the meantime, Baine said the facility was relying on trailer-mounted water tanks and urged inmates and prison staff to remain calm.
Opposition politician Francis Zaake voiced outrage over the issue.
"How can water be disconnected at Luzira prison? Is government in charge of the country's affairs?" he told AFP.
"This is a national embarrassment."
Built by the British in the 1920s, the dilapidated complex has been the long-standing focus of discussions to relocate it outside the capital.
It is not the first time the prison and its inmates have been left without water.
In 2017, local media reported that Luzira was also disconnected after failing to pay its bill.
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