Preliminary budget estimates for the financial year 2026/27 indicate that government plans to reduce the budget to Shs69.3 trillion.
This will be 4.2 percent lower, or Shs3.04 trillion less of the Shs72.4 trillion 2025/26 financial year.
In his first Budget Circular in preparation of the 2026/27 Budget Framework Paper, Finance Permanent Secretary Ramathan Ggoobi said the reduction is part of a larger plan that seeks to phase out certain expenditures.
The Circular also indicates that government plans to increase domestically generated revenue to Shs40.1 trillion, up from Shs36.8 trillion.
Mr Ggoobi also indicated that government’s discretionary funding – net of arrears, interest payments, and domestic debt repayments for the 2026/27 financial year – will amount to Shs31 trillion, down from Shs32.5 trillion this financial year.
In the 2026/27 financial year, government also plans to reduce domestic borrowing by Shs2.42 trillion to Shs8.95 trillion from Shs11.38 trillion as a way of keeping public debt sustainable and reducing interest payments.
The Circular also notes that domestic debt refinancing is projected to drop to Shs9.68 trillion, down from Shs10 trillion, while budget financing will drop from Shs2 trillion to Shs330.9b.
External project financing is projected to reduce to Shs10 trillion, from Shs11.3 trillion.
Mr Ggoobi, however, noted that accounting officers are expected to align their budget plans with the tenfold growth strategy, noting that: ‘Public resources must only finance activities that create economic value and improve service to Ugandans.’
The 2026/27 Budget will be the second in which government is implementing the ten-fold growth strategy, which seeks to grow Uganda’s gross domestic product to $500b by 2040.
The Circular indicates that government will continue to prioritise agro-industrialisation, tourism development, mineral-based industrial development, including oil and gas, science, technology and innovation, including ICT and the creative industry, and human capital development, among others.
Under agro-industrialisation, focus will be placed on reversing low productivity in agriculture by commercialising farming, while under tourism development, emphasis will be on increasing tourist inflows, doubling average expenditure, and lengthening their stay.
The Circular also notes that under mineral-based industrial development, government will prioritise the completion of the East African Crude Oil Pipeline and build an overarching knowledge economy that will drive productivity and efficiency under science, technology, and innovation.
Government, Mr Ggoobi noted that under science, technology, and innovation, government will focus on the commercialisation of innovations by taking to the market products of Kiira Motors, Bio Pharma, Banana, and value-added coffee.
Government will also implement regulatory reforms to strengthen intellectual property rights, incentivise local manufacturing, and foster innovation-driven enterprises.
Government also plans to prioritise the completion of strategic roads and bridges, maintenance of core national roads, rehabilitation of the Metre Gauge Railway, and expedite the development of the Standard Gauge Railway, Bukasa port, and recapitalisation of Uganda Airlines.