BUDGET FY 2025/26 TRANSFORMING UGANDA'S ECONOMY

Uganda’s Finance Minister Matia Kasaija on Thursday presented an ambitious UGX 72.1 trillion budget for the 2025/26 Financial Year, outlining an aggressive national strategy to transform Uganda’s economy through full monetization, deepened industrialization, expanded digital infrastructure, and enhanced market access.

Delivered at Kololo Independence Grounds before President Yoweri Museveni, the 2025/26 budget, themed “Full Monetization of the Ugandan Economy through Commercial Agriculture, Industrialization, Expanding and Broadening Services, Digital Transformation and Market Access,” marks a pivotal moment in Uganda’s Vision 2040 development journey.

A Resilient, Rapidly Growing Economy

Minister Kasaija reported that Uganda’s economy grew by 6.3% in FY 2024/25, with projections of accelerating to 7% in FY 2025/26. By the end of this financial year, the economy is expected to reach UGX 254.2 trillion (USD 66.1 billion), driven by growth in agriculture, manufacturing, tourism, and ICT.

Kasaija highlighted Uganda’s graduation from the Least Developed Countries (LDCs) category, crediting the country’s sustained peace, infrastructure expansion, and strategic investment in productive sectors.

Major Budget Allocations: Wealth Creation and Human Capital

A whopping UGX 11.44 trillion has been allocated to health, education, social protection, and water/sanitation, reinforcing government efforts to invest in the population. Key highlights include:

Health (UGX 5.87 trillion): Operationalising Health Centre IVs, expanding e-health systems, and building specialized hospitals.
Education (UGX 5.04 trillion): Continued support for UPE/USE, construction of 116 seed schools, digital inspections, and operationalisation of Bunyoro and Busoga universities.
Social Protection (UGX 404.9 billion): Expansion of SAGE grants and funding for youth, women, and disability inclusion programmes.

Wealth Creation: Transforming Households

Uganda’s cornerstone wealth creation schemes received substantial backing:

Parish Development Model (PDM): With UGX 3.3 trillion already disbursed across 10,589 parishes, FY 2025/26 adds UGX 1.059 trillion to reach more households.
Uganda Development Bank (UGX 1 trillion): Funding over 600 enterprises, UDB supports industrialization and SME growth.
Emyooga and Agricultural Credit (UGX 150 billion): Bolstering urban entrepreneurship and smallholder farming.

Industrialization and Agro-Processing Drive

With UGX 1.86 trillion committed to agro-industrialisation, the budget expands irrigation, seed research, post-harvest management, and agro-processing. Eleven new agro-processing facilities were completed in FY 2024/25, and Uganda is eyeing higher export earnings from processed coffee, milk, and cereals.

Notably, Minister Kasaija confirmed Uganda’s first-ever coffee exports to Serbia and milk exports to Algeria, with dairy exports potentially bringing in USD 500 million annually.

Science, Innovation & Technology: The Next Frontier

From the completion of the Kiira electric vehicle plant to investment in pharmaceutical manufacturing and vaccine development, the budget prioritizes the knowledge economy. A total of UGX 1.01 trillion is allocated for STI, creative industries, and ICT.

Tourism and Oil: Uganda’s Emerging Economic Engines

Tourism earnings reached USD 1.52 billion by March 2025, while tourist arrivals rose to 1.37 million. The budget allocates UGX 430 billion directly to tourism, plus UGX 2.2 trillion indirectly through infrastructure and security in tourism hubs.

On oil and gas, the government is ramping up infrastructure with the 1,443-kilometre East African Crude Oil Pipeline now 58% complete. Oil revenue is expected to contribute up to USD 2.5 billion annually once production starts in 2026.

Revenue and Fiscal Strategy

The government aims to collect UGX 37.2 trillion in domestic revenue to finance 60% of the budget. Kasaija outlined tax base expansion strategies including anti-smuggling tech, revised tax laws, and digital compliance systems like EFRIS.

Despite a projected fiscal deficit of 7.6% of GDP, the Finance Minister emphasized sustainable borrowing and grants to bridge the gap.

Final Note: A Budget Anchored in Transformation

Minister Kasaija closed his speech by affirming Uganda’s readiness to launch into a new era of prosperity: “The foundation has been laid. What remains is for every Ugandan to join this journey of full monetization, leveraging the wealth creation programmes and government support to create sustainable livelihoods.”