Uganda Aims for 10.2% Economic Growth with Shs84.4 Trillion Budget Unveiling by Musasizi
Finance Minister Henry Musasizi has announced a national budget framework of Shs84.4 trillion for the 2026/2027 financial year, targeting an ambitious economic growth rate of 10.2%. The government intends to leverage oil production, infrastructure development, agriculture, and industrial expansion to facilitate economic transformation.
During a presentation on behalf of President Yoweri Museveni at Kololo Independence Grounds on June 11, 2026, Musasizi emphasized that the economy is on a solid recovery trajectory, bolstered by improved macroeconomic stability and increasing investment inflows. He stated, “The economy is stable. Growth is accelerating. Inflation is low. The exchange rate is stable. Exports are rising. Investment is increasing,” highlighting Uganda’s readiness for a significant structural shift with the commencement of commercial oil production.
Budget Composition and Revenue Projections
The Shs84.4 trillion budget comprises various funding sources, including domestic revenues, borrowing, external financing, and debt refinancing. Domestic revenue is projected at Shs45.96 trillion, with Shs40.16 trillion expected from tax collections, Shs4.02 trillion from non-tax revenue, Shs1.44 trillion from petroleum revenue, and Shs339.8 billion from local government sources.
Domestic borrowing is estimated at Shs11.97 trillion, while external budget support and project financing are projected to contribute Shs1.22 trillion and Shs11.27 trillion, respectively. The budget framework also includes Shs13.97 trillion for domestic debt refinancing, which the government describes as a rollover of maturing obligations within the domestic debt market.
Expenditure Allocations
In terms of expenditure, the government has allocated Shs9.71 trillion for wages and salaries, while non-wage recurrent expenditure is set at Shs33.28 trillion. This category encompasses operational funding for government institutions, service delivery programs, interest payments, health and education grants, medicines, infrastructure maintenance, and wealth creation initiatives.
Development expenditure is projected at Shs22.05 trillion. Within this, Shs13.97 trillion is earmarked for domestic debt refinancing, and Shs4.18 trillion is allocated for debt amortization. Additional allocations include Shs547 billion for repaying domestic debt held at the Bank of Uganda and Shs317 billion for clearing domestic arrears.
Musasizi reiterated the government’s commitment to stabilizing public finances while continuing to invest in key growth sectors. He noted, “A country that finances its development from its own resources enjoys greater policy independence, resilience, and sustainability.”
Infrastructure and Sectoral Investments
Infrastructure development remains a cornerstone of the budget, with Shs8.79 trillion allocated to transport systems, including roads, bridges, railways, airports, and related logistics infrastructure. Musasizi confirmed that the construction of the Standard Gauge Railway from Malaba to Kampala is progressing, which is anticipated to significantly reduce transport costs and enhance regional competitiveness. He stated, “Construction of the Standard Gauge Railway is at an advanced stage, and it will transform the cost of doing business in Uganda and the wider region.”
The government also plans to expand Uganda Airlines by acquiring eight additional aircraft to bolster tourism, trade, and international connectivity.
The oil and gas sector is projected to be a key driver of economic expansion, with ongoing development of the East African Crude Oil Pipeline and central processing facilities. Musasizi informed Parliament that drilling activities have surpassed the requirements for first oil production. “Fifty-one additional wells were drilled, bringing the cumulative number to 199 wells, exceeding the 189 wells required for first oil production later this year,” he said.
Funding for Health, Education, and Agriculture
Significant funding is allocated to health and education, with Shs5.23 trillion designated for the health sector and Shs6.66 trillion for education. The government has also set aside Shs568.65 billion for salary enhancements for primary school teachers and arts teachers in secondary and technical institutions.
In agriculture and wealth creation, Shs2.26 trillion is allocated for agro-industrialization, while Shs2.49 trillion will support broader wealth creation programs, including the Parish Development Model, Emyooga, the Agricultural Credit Facility, and other targeted funds. Musasizi described the Parish Development Model as a transformative initiative aimed at shifting households from subsistence to commercial production.
“PDM is not merely a financing program. It is a structural transformation program. Its objective is to move households from subsistence to commercial production and from survival to enterprise,” he stated.
Additionally, the government has earmarked Shs1.14 trillion for science, technology, and innovation, along with Shs1.03 trillion for industrial development, as part of efforts to enhance manufacturing, digital innovation, and value addition. Security institutions received Shs10.21 trillion to support defense modernization, counter-terrorism, intelligence systems, and community policing.
Economic Stability and Debt Concerns
Musasizi projected continued economic stability, citing improving external balances and rising export earnings. He reported that Uganda’s foreign exchange reserves had increased to US$6 billion, while exports of goods and services reached US$18.04 billion in the year ending March 2026, with coffee exports alone generating US$2.46 billion.
However, he acknowledged concerns regarding public debt levels, which stand at US$34.86 billion, equivalent to approximately Shs126.19 trillion or 53 percent of GDP. “Uganda’s public debt remains sustainable and is projected to stay so over the medium and long term,” he assured.
Musasizi concluded that the budget is structured to accelerate Uganda’s transformation agenda, asserting that strategic investments in infrastructure, energy, agriculture, and human capital will drive sustained high growth. He emphasized, “Without peace, you cannot create prosperity; without security and rule of law, there is no investment; and without stability, there is no growth.”
Source: www.zawya.com
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Published on 2026-06-13 20:36:00 • By the Editorial Desk
