Uganda Aims for 10.2% Economic Growth with Shs84.4 Trillion Budget Unveiling by Musasizi
Finance Minister Henry Musasizi has presented a national budget framework of Shs84.4 trillion for the 2026/2027 financial year, aiming for an ambitious economic growth rate of 10.2 percent. This budget reflects the government’s strategic focus on oil production, infrastructure development, agriculture, and industrial expansion as key drivers of economic transformation.
In a session held on June 11, 2026, at Kololo Independence Grounds, Musasizi delivered the budget on behalf of President Yoweri Museveni. He emphasized that the economy is on a robust recovery trajectory, bolstered by enhanced macroeconomic stability and increasing investment inflows.
“The economy is stable. Growth is accelerating. Inflation is low. The exchange rate is stable. Exports are rising. Investment is increasing,” Musasizi stated, highlighting Uganda’s readiness for a significant structural shift with the commencement of commercial oil production.
Breakdown of the Budget Framework
The Shs84.4 trillion budget is composed of 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. External budget support and project financing are anticipated to contribute Shs1.22 trillion and Shs11.27 trillion, respectively. The budget framework also includes Shs13.97 trillion for domestic debt refinancing, which represents the rollover of maturing obligations within the domestic debt market.
Expenditure Allocations
On the expenditure side, the government has earmarked Shs9.71 trillion for wages and salaries, while non-wage recurrent expenditure is set at Shs33.28 trillion. This allocation covers operational funding for government institutions, service delivery programs, interest payments, and grants for health and education, among other essential services.
Development expenditure is projected at Shs22.05 trillion, with Shs13.97 trillion allocated for domestic debt refinancing and Shs4.18 trillion for debt amortization. Additional funds 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 ensuring continued investment in vital growth sectors. “A country that finances its development from its own resources enjoys greater policy independence, resilience, and sustainability,” he remarked.
Infrastructure and Economic Drivers
Infrastructure development is a cornerstone of the budget, with Shs8.79 trillion allocated for transport systems, including roads, bridges, railways, and airports. The ongoing construction of the Standard Gauge Railway from Malaba to Kampala is expected to significantly reduce transport costs and enhance regional competitiveness.
“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,” Musasizi noted.
Additionally, the government plans to expand Uganda Airlines by acquiring eight new aircraft to bolster tourism, trade, and international connectivity.
The oil and gas sector remains pivotal for economic growth, with the East African Crude Oil Pipeline and central processing facilities under development. Musasizi informed Parliament that drilling activities have surpassed the requirements for initial oil production, with 199 wells drilled, exceeding the necessary 189 wells.
Funding for Health, Education, and Agriculture
Significant funding has been allocated to the health and education sectors, with Shs5.23 trillion for health and Shs6.66 trillion for education. The budget also includes 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 designated for agro-industrialization, while Shs2.49 trillion will support broader wealth creation initiatives, including the Parish Development Model and the Agricultural Credit Facility. Musasizi emphasized that the Parish Development Model is not just a financing program but a structural transformation initiative aimed at transitioning households from subsistence to commercial production.
Investment in Technology and Security
The government has allocated Shs1.14 trillion for science, technology, and innovation, alongside Shs1.03 trillion for industrial development. These investments aim to expand manufacturing capabilities, promote digital innovation, and enhance value addition. Security institutions are set to receive Shs10.21 trillion to support defense modernization, counter-terrorism efforts, and community policing initiatives.
Musasizi projected continued economic stability, citing improvements in external balances and rising export earnings. Uganda’s foreign exchange reserves have increased to US$6 billion, with exports of goods and services reaching US$18.04 billion for the year ending March 2026, including US$2.46 billion from coffee exports.
However, he acknowledged concerns regarding public debt levels, which stand at US$34.86 billion, 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 stated.
Musasizi concluded that the budget is strategically designed to accelerate Uganda’s transformation agenda, underscoring that investments in infrastructure, energy, agriculture, and human capital are essential for sustained high growth. “Without peace, you cannot create prosperity; without security and rule of law, there is no investment; and without stability, there is no growth,” he asserted.
Source: www.zawya.com
Keep reading for the latest cybersecurity developments, threat intelligence and breaking updates from across the Middle East.
