Uganda's 2025/26 Budget: Building Economic Resilience for All

 

Uganda's Shs72.136 Trillion Budget for FY 2025/2026 Focuses on Full Economic Monetisation

Kampala, Uganda - The Minister of Finance, Planning and Economic Development, Hon. Matia Kasaija, today, June 12, 2025, presented a UGX 72.136 trillion national budget for the fiscal year 2025/2026. The budget, themed "Full Monetisation of Uganda's Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access," prioritizes empowering households to participate in the money economy and enhancing the country's productive capacity.

A significant portion of the budget is allocated to key sectors aimed at driving this economic transformation, with substantial investments in social services, agriculture, and tourism.

Key National Priorities:

The overarching goal of the 2025/2026 budget is to accelerate the growth of the economy by focusing on:

• Human Capital Development: Improving the health and education of Ugandans to create a more productive workforce.
• Wealth Creation: Continuing and enhancing programs like the Parish Development Model (PDM) and Emyooga to increase household incomes.
• Infrastructure Development: Investing in transport and energy to facilitate commerce and reduce the cost of doing business.
• Agro-Industrialisation: Transforming the agricultural sector from subsistence to commercial, with a focus on value addition.
• Digital Transformation: Leveraging technology to improve service delivery, efficiency, and financial inclusion.

Social Services Investment:

The social services sector has received a significant boost to improve the well-being of Ugandans. The health sector has been allocated UGX 5.87 trillion. This funding will be directed towards the functionalization of Health Centre IVs, scaling up e-health systems for better data management and service delivery, and expanding emergency medical services across the country.

The education sector has received an allocation of UGX 5.04 trillion. This will support Universal Primary and Secondary Education, provide student loans for higher education, facilitate the construction of new seed secondary schools, and enhance teacher recruitment and digital school inspection systems to ensure quality.

Agriculture Value Addition:

In line with the budget's core theme, UGX 1.86 trillion has been earmarked for agro-industrialisation. The government's strategy is to move beyond subsistence farming by promoting commercial agriculture and adding value to agricultural products before export. Key interventions include:

• Increased funding for agricultural research to develop high-yielding and disease-resistant crop varieties and animal breeds.
• Expansion of irrigation schemes to mitigate the effects of climate change and ensure year-round production.
• Support for the Agricultural Credit Facility (ACF) to provide low-cost financing for farmers and agribusinesses.

Tourism Sector on the Rebound:

The tourism sector, a major foreign exchange earner, has been allocated UGX 430 billion. The government aims to position Uganda as a competitive destination for Meetings, Incentives, Conferences, and Exhibitions (MICE). This will involve marketing Uganda's unique attractions and investing in the necessary infrastructure to host international events.

Boosting Manufacturing and Local Content:

The budget includes several measures to support the manufacturing sector and promote local content. Key among these are tax reforms aimed at creating a more favorable business environment. These include a three-year tax holiday for new citizen-owned businesses and adjustments to excise duties to encourage the use of local raw materials. The government is also committed to championing the Buy Uganda, Build Uganda (BUBU) policy to provide a ready market for locally manufactured goods.

Science and Innovation:

"Digital Transformation" is a central pillar of the new budget. This focus on science and innovation is evident in the planned scale-up of e-health systems and the digitalization of school inspections. Furthermore, the budget highlights the achievements of the National Agricultural Research Organisation (NARO) in developing an anti-tick vaccine, underscoring the government's commitment to leveraging science for economic development.

Savings Campaign via Mobile Money and Investment in Government Securities:

While the budget speech emphasizes "full monetisation" and wealth creation, which inherently encourages a savings culture, there was no specific, high-profile announcement of a new "Savings Campaign via MobileMoney and investment in Government Securities." However, the broader theme of digital transformation and financial inclusion suggests that the government will continue to support the growth of digital financial services. The increased use of platforms like Mobile Money is seen as a key enabler for bringing more Ugandans into the formal financial system, which could, in turn, facilitate easier access to savings and investment products, including government securities for retail investors. The government's focus on digital solutions for programs like the Parish Development Model (PDM) also points to a strategy of leveraging mobile technology for financial transactions and, potentially, for encouraging savings among beneficiaries. Financial sector stakeholders will be watching for specific policy directives and initiatives from the Bank of Uganda and the Ministry of Finance to operationalize this aspect of the digital transformation agenda.