Finance Minister Matia Kasaija has this Thursday 12th June 2025 delivered Uganda’s 2025/26 National Budget at Kololo Independence Grounds, outlining a UGX 72.1 trillion spending plan designed to accelerate inclusive economic transformation. Under the theme “Full Monetisation of the Ugandan Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access,” the budget seeks to deepen citizen participation in wealth creation, lift households out of subsistence, and unlock the full economic potential of Uganda’s people and resources.
A Growing, Stable Economy
The economy, Minister Kasaija reported, continues to show strong signs of resilience and growth. For the financial year ending June 2025, Uganda’s economy expanded by 6.3 percent, following 6.1 percent growth the previous year. Projections for FY2025/26 are even more ambitious, with GDP expected to grow by at least 7.0 percent. In nominal terms, the size of the economy will grow from UGX 226.3 trillion (USD 61.3 billion) to UGX 254.2 trillion (USD 66.1 billion). This expansion will see GDP per capita rise to USD 1,324 from USD 1,263 this year.
The inflation rate stood at 3.4 percent in May 2025, down from 4.1 percent the previous year, thanks to stable food supplies, reduced fuel prices, and stronger fiscal-monetary policy coordination. The Ugandan shilling has appreciated by 4 percent year-on-year and was recently ranked Africa’s most stable currency by the IMF’s International Financial Statistics Division. This stability was supported by higher exports, robust tourism receipts, and sustained foreign direct investment inflows.
Domestic Revenue Target and Financing
To fund the UGX 72.1 trillion budget, government has set a domestic revenue target of UGX 37.2 trillion—equivalent to about 60 percent of total spending. This is a substantial increase from UGX 31.9 trillion collected in the previous year. The rest of the budget will be financed through grants and borrowing, with the fiscal deficit projected at 7.6 percent of GDP. The Uganda Revenue Authority has been tasked with closing loopholes, expanding the tax base, increasing efficiency through digital tools such as EFRIS, and eliminating wasteful exemptions and corruption in tax administration.
Key Sector Allocations: Investing in People and Production
The largest share of the budget—UGX 11.44 trillion—has been allocated to human capital development sectors: health, education, social protection, and water and sanitation. The health sector has been allocated UGX 5.87 trillion for FY2025/26. This funding will support the operationalisation of Health Centre IVs, strengthen primary healthcare and community health systems, expand the national e-health infrastructure, scale up ambulance services, promote reproductive health and nutrition, and continue the construction of specialised cancer and heart centres.
Education will receive UGX 5.04 trillion, which will maintain government sponsorship of students under UPE, USE, and post-O-Level training programmes. The budget also supports the construction of 116 new seed secondary schools, rehabilitation of 120 traditional schools and 31 special needs institutions, and operationalisation of Busoga and Bunyoro universities. Additional resources will facilitate recruitment of more teachers and provide textbooks to improve the student-to-book ratio from 15:1 to 3:1.
In the social protection sector, government has allocated UGX 404.9 billion. The budget will continue to support elderly persons through the SAGE programme, scale up special enterprise grants for older persons and persons with disabilities, and expand women and youth entrepreneurship initiatives. Water and environmental protection has been allocated UGX 366.1 billion to improve rural and urban safe water access, build new piped systems, and rehabilitate sanitation and hygiene infrastructure, especially in underserved communities and refugee-hosting areas.
Inclusive Wealth Creation Programs – UGX 2.43 Trillion
The government has made clear that its wealth creation strategy is rooted in community-level enterprise and affordable finance. A total of UGX 2.43 trillion has been earmarked for wealth creation interventions in FY2025/26. The largest single component is UGX 1.059 trillion for the Parish Development Model (PDM), which has already disbursed UGX 3.3 trillion over the past three years to 10,589 parishes, reaching more than 2.6 million beneficiaries. Another UGX 100 billion has been allocated to Emyooga, a livelihoods programme supporting vocational and trade-based entrepreneurs in urban and peri-urban areas.To increase access to patient capital, the Uganda Dvelopment Bank will receive UGX 1 trillion, bringing total government investment in the bank to over UGX 2.5 trillion since its recapitalisation began. UDB’s mandate includes financing in manufacturing, agribusiness, tourism, health, and education. The Agricultural Credit Facility will receive UGX 50 billion in additional funding, supporting commercial agriculture, post-harvest management, and agro-processing. Uganda Development Corporation will receive UGX 187.1 billion to drive co-investment in value-adding sectors such as fruit, tea, and sugar processing.
Additional funds include UGX 231.3 billion for the GROW programme targeting women entrepreneurs, UGX 275.1 billion for the INVITE project focused on industrial transformation, and UGX 58.5 billion for youth skilling and industrial hubs. Microfinance support services have also been allocated UGX 48.5 billion to support community-based savings and credit networks.
Food and Agro-Industrialisation – UGX 1.86 Trillion
To boost agricultural productivity and promote value addition, the government has allocated UGX 1.86 trillion for agro-industrialisation in FY2025/26. This funding will support research and development, expand solar-powered and gravity irrigation infrastructure, distribute fertilisers and farming equipment, and finance post-harvest storage and certification systems. Uganda’s irrigation capacity has reached 54.7 million cubic metres, and more than 4,300 micro-irrigation units have been deployed to smallholder farmers in 135 districts.
Irene Mwoyogwona: Beyond the Numbers – How Pride Bank's Award-Winning CFO Combines Profitability and Social ImpactIn support of agro-processing, government has completed eleven new processing hubs for maize, rice, coffee, and oilseeds across the country. These include facilities in Kyenjojo, Ntoroko, Nakaseke, and Katakwi. Research agencies such as NARO have made further strides, including the establishment of an aflasafe processing facility and the development of anti-tick vaccines to boost livestock health.
Tourism Development – UGX 430 Billion (Direct Investment)
Tourism is bouncing back strongly, with international arrivals reaching 1.37 million in 2024 and earnings rising by 26 percent to USD 1.28 billion. In FY2025/26, UGX 430 billion has been allocated directly to tourism development, with an additional UGX 2.2 trillion in supporting infrastructure, including roads, ICT, stadiums, and park security. Key priorities include international marketing of Uganda as a destination, infrastructure upgrades at popular sites like Namugongo and the Source of the Nile, construction of highway refreshment centres, and standardisation of hospitality services.
The Explore Uganda campaign has had tangible results, with tourist interest growing 33 percent in the UK, 19 percent in Canada, and 5 percent in the USA. Uganda now ranks seventh in Africa for Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism, aided by the completion of the new convention centre in Munyonyo.
Mineral-Based Industrialisation (Oil & Gas) – UGX 875.8 Billion
The budget allocates UGX 875.8 billion to mineral-based industrial development, including oil and gas. Government continues to expedite completion of the East African Crude Oil Pipeline (now 58 percent complete) and the development of a 60,000-barrel-per-day refinery in partnership with Alpha MBM of the UAE. In the current year, 84 percent of Tier One oil and gas contracts—worth USD 2.25 billion—were awarded to Ugandan companies, creating more than 17,000 direct and 39,000 indirect jobs. The bulk petroleum supply by UNOC has improved price stability and saved the country an estimated USD 72.8 million annually.
Science, Technology, Innovation & Creative Economy
Government continues to build Uganda’s knowledge economy, with strategic investments in automotive manufacturing, pharmaceuticals, diagnostics, and high-value processing. The Kiira Motors Corporation vehicle plant in Jinja has produced 41 buses (29 electric) and signed supply agreements for over 3,700 units in West Africa. The Dei BioPharma facility in Matugga has been licensed to produce generic medicines and is now operational. A state-of-the-art coffee freeze-drying factory has been set up in Ntungamo to add value to Uganda’s most profitable export crop.
Makerere and Gulu universities are advancing biotech research in rapid diagnostic kits and vaccines, including a locally developed anti-tick vaccine, PCR test kits, and cassava disease detectors.
Export Growth and Economic Complexity
Uganda’s export earnings reached a record USD 11.8 billion in the twelve months to March 2025, up from USD 9.56 billion the previous year. Coffee exports alone fetched USD 1.83 billion and are projected to reach USD 2 billion soon. Other top exports include gold, industrial products, dairy, cocoa, fish, maize, and niche products like vanilla, flowers, and electronics. A Harvard Growth Lab study ranked Uganda among the world’s most economically complex countries for its income level, noting the addition of 31 new products to its export portfolio over the past 15 years.
Final Word
Presenting the budget, Minister Kasaija emphasised that Uganda has now laid the foundation for the next phase of economic acceleration. “This budget is about one thing: monetisation. It is about turning people’s efforts—be it farming, fishing, skilling, trading, or innovating—into real income,” he said. “We are now on a fast track to becoming a USD 500 billion economy by 2040.”
With its expansive focus on people, productivity, infrastructure, and innovation, the FY2025/26 budget represents a confident national statement that Uganda is ready to rise—parish by parish, sector by sector—toward shared prosperity.
