Uganda’s Minister of Finance, Planning and Economic Development recently unveiled the national budget for the financial year 2025/26, with a total resource envelope amounting to Shs 72.38 trillion. The government anticipates raising Shs 37.55 trillion from domestic revenue, comprising Shs 33.94 trillion in tax revenue, Shs 3.28 trillion in non-tax revenue, and Shs 328.6 billion from Local Government collections.
To bridge the financing gap, Shs 11.38 trillion will be borrowed domestically, while Shs 10.03 trillion will be used to refinance maturing domestic debt. Additionally, Shs 2.08 trillion will be sourced through grants and external borrowing for general budget support, and Shs 11.33 trillion will be allocated to externally financed projects, including Shs 2.8 trillion in grants.
The budget allocates Shs 8.57 trillion for wages and salaries, Shs 28.33 trillion for non-wage recurrent expenditure—which covers operational costs for institutions, wealth creation initiatives, science and technology investments, education and health grants, medicines, infrastructure maintenance, and interest payments—and Shs 18.24 trillion for development expenditure.
Other allocations include Shs 10.03 trillion for domestic debt refinancing, Shs 4.98 trillion for debt amortization, Shs 493 billion for repayment to the Bank of Uganda, Shs 1.4 trillion for domestic arrears, and Shs 328.6 billion for Local Government expenditure from own revenue.
To support this ambitious fiscal plan, the government has outlined a financing strategy that includes improving tax administration to generate an additional Shs 1.89 trillion, introducing new tax measures to raise Shs 538.6 billion, rationalising inefficient tax exemptions, repurposing resources from the FY 2024/25 budget toward high-impact areas aligned with the Tenfold Growth Strategy, and mobilising concessional financing from institutions such as the World Bank, IMF, African Development Bank, Islamic Development Bank, and BADEA.
Furthermore, the strategy includes tapping into innovative financing sources such as Public-Private Partnerships, climate finance, private equity, Sukuk bonds, Panda bonds, and diaspora bonds to ensure sustainable and inclusive economic development..
