The Ministry of Finance, Planning and Economic Development has reduced the size of the Budget for the Financial Year (FY) 2027/2028 to Shs79.22 trillion, down from Shs84.39 trillion in the current Budget.
The cut reflects a 6.2 percent reduction as the government plans to reduce its borrowing, according to Finance ministry officials.
Uganda has increasingly depended on borrowing to finance its Budget, and according to the Ministry of Finance, the focus is increasingly tilting towards reducing external debt and optimising the money borrowed because of its growing public debt, now at Shs143.92 trillion ($37.12 billion) by the end of June 2026, up from Shs125.23 trillion ($32.30 billion), a year earlier, and a debt-to-GDP ratio of 54.3 percent.
Debt financing is also eating into the funds that would have been used for social services such as health and education.
The reduction is planned despite a projected economic growth of 9.1 percent, up from a revised forecast of 7.6 percent in the previous period, expected to be driven by the commercial oil production projected later this year.
In the first Budget Call Circular (BCC) for the preparation of the Budget Framework Papers (BFPS) and preliminary Budget estimates for FY2027/2028, issued on September 15 to all accounting officers, all chief executive officers of State-owned enterprises and public corporations, and the Permanent Secretary/Secretary to the Treasury, Mr Ramathan Ggoobi said the preliminary resource envelope emphasises the need for stronger domestic revenue mobilisation, reduced reliance on borrowing and external financing, and efficiency.
Mr Ggoobi stated that all accounting officers are required to prepare and submit their Budget Framework Papers and Budget Estimates in strict accordance with the requirements, priorities, resource ceilings and timelines set out in the circular.
The circular states that programme working groups and accounting officers shall, therefore, accommodate critical priorities through efficiency, reprioritisation and reallocation within the communicated ceilings.
‘Accordingly, accounting officers shall ensure their Budget Framework Papers and Budget proposals prioritise interventions that expand production and productivity, promote value addition and market access, create jobs, increase household incomes and support wealth creation. Each accounting officer shall prepare the Budget Framework Paper for FY2027/2028 – FY2031/2032 in accordance with the Budget Strategy and the Budget Process Calendar for FY2027/2028,’ he said.
In the next financial year, the economy is projected to grow at 9.1 percent, up from 7.6 percent projected for FY2026/2027, driven by the onset of commercial production of oil and gas.
Mr Ggoobi said all accounting officers shall prioritise investments in the ATMS, wealth creation and critical enablers as the bedrock for sustained high economic growth.
Respecting the Medium-Term Expenditure Framework for FY2027/2028, Mr Ggoobi said the medium-term expenditure framework (MTEF) ceilings for FY2027/2028 have been issued at programme level.
Mr Ggoobi stressed that programme working groups (PWGs) shall allocate resources strictly within the communicated programme ceilings and shall prioritise statutory and contractual obligations, service delivery, viable ongoing commitments and high-impact interventions aligned to the ATMS and their critical enablers.
‘Agreed vote-level allocations shall be submitted to this ministry by Thursday, 15th October 2026 for upload onto the Programme Budgeting System (PBS),’ he said.
Mr Ggoobi said the key priorities for next financial year shall focus on raising agricultural productivity and production, expanding irrigation and research, strengthening extension, inspection, certification, standards and traceability, promoting value addition, and improving access to domestic, regional and export markets.
On tourism, he said: ‘The focus shall be on addressing the binding constraints to increasing visitor numbers, expenditure and length of stay, including infrastructure at priority tourism sites, hospitality standards and skills, targeted tourism promotion, and stronger economic and commercial diplomacy through Uganda’s Missions Abroad.’
Mr Ggoobi also said the budget will focus on accelerating oil and gas infrastructure, including the East African Crude Oil Pipeline and refinery-related investments; strengthening transparency and accountability for extractive revenues; quantifying commercially viable mineral deposits; developing mineral markets and buying centres; and promoting domestic value addition and linkages to local industry.