Local governments have been urged to invest in industrialisation and strengthen domestic revenue mobilisation as Uganda seeks to reduce borrowing and avoid a debt crisis.
The Minister of State for Finance, Planning and Economic Development, Amos Lugoloobi, said the 2027/2028 budget will be guided by seven strategic shifts, with revenue-led fiscal consolidation taking priority.
He made the remarks on Tuesday while opening a regional local government budget consultative workshop for the Financial Year 2027/2028 in Lira City.
The workshop was held under the theme: ‘Full Monetization of Uganda’s Economy through Commercial Agriculture, Industrialization, Expanding and Broadening Services, Digital Transformation and Market Access.’
Mr Lugoloobi said domestic revenue mobilisation will be placed at the centre of budget formulation by broadening the tax base, using data and technology to curb leakages, improving compliance and mobilising complementary financing.
‘We need to see more revenue coming into our coffers. The more revenue we get, the more we limit borrowing. We don’t need to continue borrowing endlessly,’ he said.
‘Each year we read a budget, there’s a huge amount for borrowing, so we want to make sure the gap between the budget and our revenue is lessened,’ he added.
He said the government wants to narrow the gap between revenue and expenditure, with the long-term goal of financing the budget through domestic revenue.
‘We don’t want to plunge our country into a debt crisis, and this is why we are placing emphasis on revenue mobilisation. As local governments, do what you can to mobilise resources,’ Mr Lugoloobi said.
He cautioned local leaders against avoiding revenue collection for fear of being unpopular, saying locally collected taxes are intended to support public services.
‘Sometimes you want to be so friendly to the population when it comes to collecting local revenue, we don’t want to be seen to be hard, but the taxes are collected to help the population,’ he said.
The minister also cautioned against allowing the fiscal deficit to expand, saying increased domestic revenue mobilisation was critical to reducing reliance on borrowing.
Oil revenue
On the second strategic shift, Lugoloobi said oil revenue will be managed transparently and sustainably in accordance with the Public Finance Management Act.
He said government would not spend all oil revenues immediately, with part of the proceeds being invested in infrastructure and another portion preserved as savings for future generations.
‘The dollars acquired there will be for your children and grandchildren, for the future prosperity of our country,’ he added.
Lugoloobi called on local governments to mobilise resources and invest in industrialisation, which he described as an important avenue for expanding the tax base and strengthening Uganda’s fiscal independence.
‘Unless we all pay tax, we are not going to be able to finance our budgets. So we need to see more effort in that area, including the use of data and technology,’ he said.
He noted that the Local Government Finance Commission had introduced a tool to help districts capture data on potential revenue sources and identify leakages through digital systems.
Lira industrial park dispute
The minister’s call for local governments to support industrialisation comes against the backdrop of a dispute over land earmarked for a regional industrial park in Lango Sub-region.
Lira District had allocated about 500 acres at the former Aler Farm in Ngetta Ward, along the Lira-Kitgum Road, to the Uganda Investment Authority (UIA) for construction of the industrial park.
However, Lira District and the Uganda National Chamber of Commerce and Industry, Lango Chapter, have since suspended the allocation, citing concerns over transparency and inadequate community engagement.
The decision followed an emergency meeting of chamber members after reports that 200 acres of the land designated for the industrial park had been handed over to Zhou and Mahakala Group without broad stakeholder consultation.
The meeting resolved that all land transactions relating to the industrial park be frozen until the Prime Minister convenes a stakeholders’ meeting to clarify the status of the project and the role of prospective investors.