The Government of Uganda unveiled an ambitious Shs84.39 trillion budget for the 2026/27 financial year, the largest in the country’s history. Anchored on the tenfold growth strategy, the budget aims to transform Uganda into a $500 billion economy through investments in oil production, industrialisation, commercial agriculture, infrastructure, science, technology, and human capital development. These investments reflect government’s commitment to economic transformation. However, a critical question remains: where does the informal sector fit within Uganda’s growth strategy?
The informal sector is Uganda’s largest employer and a vital pillar of the economy. More than 80 percent of the country’s workforce is employed in informal activities. While these enterprises contribute little to formal tax revenues, they provide livelihoods for millions of households and play an important role in poverty reduction. As the government pursues industrialisation and large-scale investments, it must recognise that sustainable economic growth cannot be achieved without strengthening the enterprises that support the majority of citizens. Economic transformation should not only be measured by large infrastructure projects and industrial parks, but also by improvements in the livelihoods of ordinary Ugandans.
One of the biggest challenges facing informal businesses is limited access to affordable financing. Many entrepreneurs lack collateral, business registration, and financial records required by commercial banks, forcing them to rely on expensive informal lending arrangements that limit growth and profitability. The government has attempted to address this challenge through wealth creation initiatives such as Emyooga and the Parish Development Model (PDM). Emyooga has disbursed more than Shs 550 billion to enterprise groups, while PDM continues to receive annual allocations exceeding Shs1 trillion. These programmes have expanded access to financial resources for previously excluded households and businesses. However, their impact remains limited relative to the size of the informal economy due to challenges such as inadequate business skills, market access constraints, implementation gaps, and limited funding per beneficiary.
The situation is further complicated by rising transport costs, fuel prices, rent, electricity charges, and inflation, all of which continue to erode profits for small enterprises. Infrastructure investments, including the Malaba-Kampala Standard Gauge Railway, road maintenance projects, and the operationalisation of Kabalega International Airport, are expected to stimulate economic activity and improve market access. However, these benefits will only be fully realised if small businesses are empowered to participate in the opportunities created.
Agriculture presents another important opportunity. Although the sector has received Shs 2.26 trillion, the allocation remains relatively modest given that agriculture remains Uganda’s largest employer and the backbone of the economy. Investments in irrigation, agricultural research, extension services, and anti-tick vaccines could improve productivity and household incomes. However, farmers and small agribusinesses still require access to markets, affordable financing, and value-addition
opportunities.
The Shs1.14 trillion allocated to science, technology, and innovation could also improve efficiency and profitability among small enterprises through digital platforms, mobile payments, and e-commerce solutions. Yet meaningful digital transformation will require investment in skills development and affordable technology.Another concern is the growing cost of public debt. Approximately Shs 33.4 trillion, nearly 40 percent of the budget, has been allocated to debt servicing. While borrowing can support development, the government must ensure that future debt generates tangible economic returns and employment opportunities.
Ultimately, the success of the Tenfold Growth Strategy will depend on whether economic growth translates into improved livelihoods for ordinary citizens. With the budget now approved and presented, attention should shift to implementation. Policymakers must prioritise interventions that strengthen micro and small enterprises through affordable credit, business skills training, simplified formalisation processes, improved market infrastructure, and digital inclusion.
Uganda’s Shs 84.39 trillion budget has the potential to drive transformative growth. However, for the tenfold growth strategy to succeed, growth must be inclusive. The true measure of success will not be the size of the budget or infrastructure projects completed, but whether ordinary traders, boda boda riders, farmers, and young entrepreneurs are able to share in the nation’s economic progress.