Members of Parliament (MPs) have raised a red flag after learning that a single entity is lined up to take the lion’s share of funding for the Ministry of Trade.
The sharp imbalance proposed in the 2026/27 budget for the ministry will see Uganda Development Corporation (UDC) allocated UGX 422.35 billion, equivalent to 82% of the budget, leaving other critical institutions underfunded.
A report by the Committee on Tourism, Trade and Industry, presented by Deputy Chairperson, Boniface Okot, noted that although the ministry’s budget has risen to UGX 514.96 billion, only UGX 92.6 billion will be allocated to other votes.
“The committee notes that the increase in the ministry budget is largely driven by the capitalisation of UDC, which takes the largest share of the allocation,” Okot told the House, in a sitting chaired by Speaker Anita Annet Among.
He warned that this concentration of resources risks weakening the broader trade and industrial ecosystem, as institutions responsible for standards, research, export promotion, and enterprise development are left to operate within tight financial limits.
The committee report shows that the remaining UGX 92.6 billion is expected to fund the ministry headquarters, Uganda National Bureau of Standards (UNBS), Uganda Industrial Research Institute (UIRI), Uganda Free Zones and Export Promotion Authority (UFZEPA), and other sector interventions, including support to cooperatives and local governments.
“This level of concentration in one vote may limit the effectiveness of other institutions that are essential for trade growth and industrialisation,” Okot said.
The imbalance is already manifesting in critical gaps within the sector.
Parliament heard that despite government’s push for industrialisation, the UIRI mandated to support innovation and value addition is operating below capacity.
The committee found that UIRI’s flagship facility in Namanve remains underutilised due to a lack of key machinery worth about UGX 6.2 billion, constraining its ability to support industries with technology development and product testing.
MPs noted that this presents a contradiction in policy implementation, where substantial resources are channeled into industrial investments through UDC, while a key institution required to sustain industrial growth remains underfunded.
UNBS continues to face funding gaps that limit the enforcement of standards and public awareness on certified products, while UFZEPA has come under scrutiny for rising operational costs, including a sharp increase in legal expenses.
At the policy level, the ministry headquarters is also operating with limited resources despite its central role in coordinating trade, cooperatives, and industrial development programmes.
Beyond the trade docket, Parliament highlighted imbalances across the wider tourism, trade, and industry sector.
The committee noted that the Tourism Development Programme is projected to receive only about 71% of its planned allocation under the National Development Plan, raising concerns about the country’s ability to fully exploit tourism as a source of foreign exchange and employment.
Similarly, allocations to local governments for trade and tourism development were found to be both inadequate and unevenly distributed, with some districts receiving minimal funding that lawmakers said is unlikely to deliver a meaningful impact.
The committee also pointed to persistent systemic challenges affecting the sector, including low absorption of funds due to procurement delays, weak planning, and gaps in compliance, such as delayed submission of gender and equity certificates.
It further noted limited follow-up on previous recommendations, particularly those arising from the Auditor General’s reports.
Despite acknowledging the importance of capitalising UDC to drive industrialisation, the committee cautioned that the approach must be matched with balanced investment across the entire value chain.
The Speaker, Anita Annet Among, questioned whether UDC should not have its own vote instead of having a subvention.
“UDC should be able to take charge, not just be instructed and give their own opinion on the institution that is to be given money.” Among stated.
Okot, who responded in the affirmative, stated that UDC has significant investments but with very low returns on investments.
The report, which now moves to the Budget Committee, is expected to guide debate as Parliament considers approval of the national budget for the 2026/27 financial year.
