The Uganda FY2025/2026 budget was presented with optimism by Finance Minister Matia Kasaija, who showcased major economic strides made over the past 15 years. Delivered on behalf of President Museveni, the budget outlined Uganda’s commitment to realizing Vision 2040 through expanded development, improved services, and strategic investments.
Economic Outlook and Projections
Uganda’s economy is projected to grow to Shs254.2 trillion ($66.1 billion) in the FY2025/2026, raising GDP per capita to $1,324. This marks a steady rise from Shs64.8 trillion in FY2010/2011 and Shs226.3 trillion in FY2023/2024. Kasaija credited this to peace, stability, infrastructure growth, improved healthcare, and deliberate investment in the population. Life expectancy has improved to 68.2 years, and poverty levels dropped to 16.1%, down from 24.5% in FY2010/2011.
The budget further emphasized that the proportion of people living near health facilities increased to 91%, and over 81% of parishes now have government-aided schools. Kasaija framed these achievements as tangible indicators of national development, not just abstract figures.
Key Sector Allocations
The Uganda FY2025/2026 budget prioritizes funding for social transformation. A total of Shs11.44 trillion has been committed to sectors including health, education, water, and social protection. The health sector will receive Shs5.8 trillion to strengthen community healthcare, national ambulance systems, and reproductive health infrastructure. The education sector, allocated Shs5.04 trillion, aims to maintain access to free primary and secondary education while supporting university students through loan financing schemes.
Additionally, Shs404 billion was earmarked for social protection initiatives, supporting older persons and vulnerable groups. Kasaija underscored the government’s role in uplifting the most disadvantaged citizens, emphasizing that inclusive investment is essential for long-term national stability and prosperity.
Wealth Creation and Empowerment Initiatives
Efforts to build a more inclusive economy remain strong, with wealth creation programs receiving substantial backing. These include:
- Shs3.3 trillion for the Parish Development Model (with an additional Shs1.05 trillion planned)
- Shs1.45 trillion for Uganda Development Bank
- Shs553 billion for Emyooga
- Shs495 billion for the Agricultural Credit Facility, with Shs50 billion added in this budget cycle
These programs target job creation, local enterprise growth, and increased household incomes—key pillars for sustainable development and poverty reduction. Kasaija reaffirmed that with consistent support, more Ugandans will transition from subsistence to commercial production.
Infrastructure, Energy, and ICT Expansion
Transformative infrastructure improvements featured prominently. Electricity generation has increased from 595 MW in 2010 to 2,051 MW in 2024, while electricity access has grown from 11% to 57%. Uganda now has tarmac road access to all regions, boosting inter-regional trade and mobility.
In the ICT sector, internet access surged to 53% of the population from just 1.8% in 2010, thanks to the expansion of the National ICT Backbone to over 4,300 km. Kasaija noted that this digital growth supports the digital transformation agenda and fosters innovation across sectors.
With 31 new products added to the export basket—including steel, pharmaceuticals, and ceramics—Uganda’s economy is diversifying away from traditional agricultural exports. Inflation has been contained at 3.4%, and interest rates have slightly eased, boosting private sector investment.
Real Estate and Business Sector Implications
Real estate professionals see opportunity in the current fiscal setup. Although not explicitly highlighted, the sector stands to benefit from budget-induced ripple effects. Expanding infrastructure, improved social services, and economic decentralization are opening up new development corridors, particularly in emerging towns.
However, rental tax reforms under the Uganda Revenue Authority have drawn criticism. Landlords managing high-cost assets argue that a 50% flat deduction on gross income does not reflect real operational costs. Taxing accrued income, even if uncollected, also creates liquidity challenges, particularly where default rates are high. These concerns point to a need for broader tax reforms that better align with sector realities.
Public Sentiment and Debt Management
Despite the budget’s promising growth outlook, citizens have expressed concerns over rising public debt, now exceeding Shs50 trillion. About Shs27 trillion will go towards debt servicing, which some believe could be redirected toward service delivery. Citizens also criticized the limited allocation to local governments—only 11%—and called for an increase to 30% to improve grassroots development.
Economists argue that sustained GDP growth is vital for maintaining debt sustainability. Increased exports, particularly from the gold, coffee, and emerging oil and gas sectors, must be accompanied by domestic productivity to balance the fiscal equation. Concerns remain about whether budget figures reflect realities on the ground.
As the Uganda FY2025/2026 budget takes effect, the government is optimistic about moving closer to the Vision 2040 target of a $500 billion economy. For instance, the Ministry of Finance has emphasized prioritizing revenue collection over borrowing in the new fiscal year to create a more sustainable economic environment (source). Additionally, President Museveni has recently taken a hands-on approach to fighting poverty through monitoring the implementation of the Parish Development Model in Greater Mubende (source). While the numbers suggest progress, effective implementation and inclusiveness remain critical to ensuring all Ugandans benefit.
