Uganda’s national budget for the 2025/26 financial year is the largest in the country’s history.
At Shs 72.3 trillion, it represents a modest increase of Shs 239 billion from the previous year, but the message behind the numbers is anything but small. Unveiled by Finance minister Matia Kasaija last week, the budget arrives with a theme that reflects the government’s ongoing development ambitions: “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation, and Market Access.”
But beyond the slogans and figures lies a complex financial strategy—one that leans heavily on domestic revenue collection, balances growing debt obligations, and seeks to position Uganda as a modern, inclusive and investment-ready economy.
To fund this Shs 72.3 trillion spending plan, the government expects to raise Shs 37.55 trillion from domestic revenue sources. Of this, tax collections are projected at Shs 33.94 trillion, while non-tax revenue will account for Shs 3.28 trillion. Local governments are expected to contribute Shs 328.6 billion.
To bridge the funding gap, Uganda will borrow Shs 11.38 trillion from domestic banks, and an additional Shs 10.03 trillion will be used to refinance maturing domestic debt. The external financing component includes Shs 2.08 trillion in grants and loans for general budget support, and Shs 11.33 trillion for project-specific funding—of which Shs 2.8 trillion is in grants.
Kasaija outlined that Shs 8.57 trillion will go toward public sector wages, and Shs 28.33 trillion will cover operational and non-wage recurrent expenses. These include health and education services, infrastructure maintenance, interest payments, and funding for government programs and wealth creation funds.
The development budget stands at Shs 18.24 trillion, while Shs 10.03 trillion is allocated for refinancing domestic debt. Other commitments include Shs 4.98 trillion for debt amortisation, Shs 493 billion for debt repayments to the Bank of Uganda, and Shs 1.4 trillion to clear domestic arrears.
Where will the money go
Healthcare has been allocated Shs 5.87 trillion. This funding will support efforts to strengthen primary healthcare and community-based health services, roll out national e-health systems, and improve reproductive health and nutrition.
The government also plans to operationalise health centre IVs, deploy more community health workers, upgrade ambulance and emergency services, and build specialised health facilities for cancer and cardiovascular care.
With Shs 5.04 trillion earmarked for education, the government is doubling down on access, quality and infrastructure. The funds will sustain free education under UPE, USE, and Universal Post-O’Level Education and Training programs, support student loans and scholarships, and rehabilitate 120 traditional secondary schools and 31 special-needs primary schools.
The budget also funds the construction of 116 new seed schools and expansion of 61 existing ones. A major focus will be recruitment of teaching staff and better inspection systems to ensure accountability. Textbook-to-student ratios are expected to improve significantly—from the current 1:15 to 1:3.
Operationalising Bunyoro and Busoga universities and completing sports facilities ahead of Afcon 2027 are also included in the allocation. Shs 366.1 billion has been set aside for water resource management, environmental protection and climate change mitigation.
The government plans to construct new water supply systems for underserved urban, rural and refugee communities, while also expanding and rehabilitating sanitation infrastructure. Increasing forest and wetland cover is another priority.
The government has allocated Shs 1.059 trillion to the Parish Development Model, continuing its grassroots economic transformation agenda. Each parish will receive an additional Shs 100 million for households that haven’t yet benefited.
The government has also pledged to cover bank charges to ensure recipients receive the full Shs 1 million. Persons with disabilities will receive an extra Shs 500,000 grant to help address their unique challenges.
Agriculture Credit Facility (ACF)
Agriculture remains a core pillar of the budget’s economic strategy. The Agriculture Credit Facility has been allocated Shs 50 billion to support commercial farming and agricultural value addition. The ACF has already benefited over 14,000 borrowers, including smallholder farmers.
The loans have financed grain trade, agro-processing, post-harvest management, and on-farm activities worth hundreds of billions in combined value. The Uganda Development Bank, seen as a key vehicle for industrialisation and technological modernisation, has been allocated Shs 1 trillion for the next financial year.
The bank has already been capitalised to the tune of Shs 1.5 trillion over past years and will continue to finance sectors like manufacturing, agriculture and high-tech innovation. A total of Shs 1.86 trillion has been dedicated to deepening agro-industrialisation.
This includes funding for fertiliser access, irrigation systems, agro-processing infrastructure, agricultural research, post-harvest storage, and regulatory enforcement for quality control. Tourism will receive Shs 430 billion in direct investment, with another Shs 2.2 trillion allocated for supporting infrastructure such as roads, ICT networks, and Afcon facilities.
The budget outlines plans to brand Uganda as a premier tourism and investment destination, improve visitor amenities, enforce hospitality standards, and promote health tourism through investment in specialised medical facilities. With global attention on Uganda’s oil and mineral potential, the government is investing Shs 875.8 billion in the mining and energy sectors.
Funds will be used for mineral exploration, oil infrastructure and the capitalisation of the Uganda National Mining Company. Plans include building mineral-buying centres, enhancing transparency in mineral trading, and accelerating progress on key infrastructure projects such as the oil refinery and the East African Crude Oil Pipeline (EACOP).
But as impressive as the numbers are, they tell only part of the story. The real test lies in execution. Can the funds allocated to schools, hospitals, farms, and industries actually reach their intended beneficiaries? Will tax pressures on businesses be matched by visible improvements in infrastructure and services?
Can the country manage its borrowing without creating future fiscal stress? Minister Kasaija’s message was one of confidence and optimism. But for millions of Ugandans, it is not just about what’s in the budget—it’s about what changes in their daily lives.
The government has allocated Shs 835.98 billion to science, technology and innovation (STI), including digital infrastructure and the creative economy. This budget line includes Shs 388.23 billion for STI-specific projects, Shs 381.75 billion for information and communication technology (ICT), and Shs 66 billion for the creative arts.
According to Kasaija, these funds will be used to build a state-of-the-art high-tech city that will serve as a launchpad for Uganda’s ambitions in research, manufacturing and technology commercialization.
Among the key beneficiaries of this push are home-grown innovations like Kiira Motors, DEI BioPharma vaccines, banana-based industrial products, and value-added coffee. Beyond laboratories and assembly lines, the STI allocation also targets wider internet coverage, improved affordability and reliability of broadband, and digitisation of public services and e-commerce platforms.
Uganda’s digital transformation agenda is expected to benefit not just businesses, but also artists and content creators—many of whom have long operated without legal protection or institutional support.
The budget proposes the acquisition of a dedicated home for creatives and fast-tracking legislation to protect intellectual property.
Infrastructure: laying down the rails, roads infrastructure
Infrastructure remains a central pillar of Uganda’s development strategy, and the budget reflects this with an allocation of Shs 6.92 trillion for integrated transport systems.
This investment will finance the expansion and rehabilitation of road networks, railways, bridges, water transport and air travel infrastructure—key arteries for trade, mobility and national cohesion.
While these projects promise to ease logistics, reduce the cost of doing business, and spur regional connectivity, Uganda’s infrastructure spending has in the past drawn criticism for project delays and inconsistent contract management. With demand for energy rising in both urban centres and remote communities, Shs 1.04 trillion has been set aside for energy development.
Part of this will support the Uganda Electricity Distribution Company Limited (UEDCL) in delivering more efficient, affordable power to homes and businesses. A major component of the energy budget is the US$ 638 million Electricity Access Scale-up Project, which aims to connect one million new customers to the grid through a mix of grid expansion and clean energy solutions.
The government is also looking ahead, with plans to invest in large-scale power generation projects like Ayago, Oriang and Kiba hydropower plants, as well as early-stage development of a nuclear facility in Buyende district. Meanwhile, rehabilitation of the aging Kiira–Nalubaale hydropower complex will be undertaken to preserve current capacity and reduce technical losses.
If successfully delivered, these initiatives could significantly reduce Uganda’s power deficits and position the country as a regional energy exporter.
Security, governance and rule of law
Uganda’s largest single allocation this fiscal year goes to security and governance—with Shs 9.9 trillion earmarked for military and police professionalisation, national security, and preparation for the 2026 general elections.
According to the budget, these funds will also support access to justice, improved immigration and border security and modernisation of electoral logistics. While the government insists that this investment is about safeguarding stability and rule of law, civil society groups often point to the imbalance between security funding and under-resourced public services such as health and education.
Nevertheless, Shs 1.03 trillion has also been committed to legislative functions, citizen engagement, and oversight—aimed at strengthening accountability in the use of public resources and enhancing transparency in governance. This includes increased funding for Parliament and anti-corruption monitoring mechanisms.
In a bid to improve the justice system’s responsiveness, another Shs 602.7 billion has been allocated to judicial services. The funding will help build more courts, enhance use of technology in legal proceedings, and promote alternative dispute resolution, while also empowering magistrates’ courts with expanded civil jurisdiction.
Tackling domestic arrears: a long delayed reckoning
Perhaps one of the most telling signals in this year’s budget is the government’s decision to dramatically increase funding for the payment of domestic arrears—from Shs 200 billion last year to Shs 1.4 trillion.
These arrears, often owed to private contractors, suppliers, and service providers, have been a significant drag on private sector liquidity and trust in government procurement. To prevent further accumulation, Kasaija pledged stricter enforcement of the commitment control system and sanctions against accounting officers who fail to adhere to budgeting rules.
Multi-year projects will also receive better funding guarantees to avoid mid-cycle delays and disruptions. The 2025/26 budget projects Uganda not just as a country spending more, but as a country attempting to spend smarter.
Whether in STI, energy, or infrastructure, the emphasis is on transforming economic structure—not just keeping the lights on. There is ambition in nearly every allocation, but also a growing need for follow-through.
With elections on the horizon and a young, increasingly vocal population demanding results, implementation will be everything. In that regard, the budget is not just a ledger— it’s a litmus test for the government’s ability to turn policy into progress.