Uganda Government unveils Budget Strategy for FY 2025/2026, lists 4 priority growth areas

Uganda’s Finance Minister Matia Kasaija has presented the country’s Budget Strategy for FY 2025/2026, saying it will be anchored on four key growth areas of Agro-Industrialization, tourism development, mineral-based industrial development (oil and gas) as well as science, technology, and innovation (ICT/knowledge economy).

While unveiling the strategy at Speke Resort Munyonyo in Kampala on Wednesday, Kasaija said the first year of the implementation of the 4th National Development Plan (NDP IV) will be anchored on the 4 key growth areas underpinned by the goal of full monetization and formalization of the economy.

“This Strategy Paper presents strategic policy direction for FY 2025/2026, economy performance, economic growth strategy, budget priority areas, financing framework, and risks and mitigation measures,” Kasaija said.

He said accelerator actions to raise annual export earnings of $ 20 billion by 2040 include; facilitating the process of access to credit for small farmers at affordable costs, increasing long-term capital for SMEs to support agro-industrialisation, facilitate vertical and horizontal value addition to support production of high-value multi-input products, improving agricultural production, productivity and profitability and supporting farmers to access micro-scale irrigation systems, among others.

He said the Financial Year 2025/26 will be the last year of implementation of the current NRM Manifesto 2021-26, the first year of implementation of the NDPIV and The first year of commencement of implementation of the tenfold growth strategy.

The minister said harnessing the power of the 4th Industrial Revolution and the knowledge-based economy will require supporting research and development for new product development, new business ways, and innovation, fast-tracking development and commercialisation of investments already made in the automobile industry, strengthening partnerships with the private sector,  and research and development institutions and scientists in the pathogenic and knowledge economy

Others are deliberate investments to improve the quality of education and investment in ICT-based skills development and putting in place a strategy for long-term development of specialised skills

Prime Minister Robinah Nabbanja, while officially opening the National Budget Conference on behalf of President Museveni, said the theme of the budget is consistent with the vision of NRM of increasing household incomes and improving people’s standards of living to achieve social-economic transformation in Uganda.

“Starting FY 2025/26 and over the medium term, the NRM government is committed to building and expanding the size of our economy from the current GDP of USD 50bn to USD 500bn by 2040,” Nabbanja said.

She reassured all stakeholders that Uganda’s economy has fully recovered from both domestic and external shocks that previously hampered growth over the past three financial years and is now on the right growth trajectory.

“FY 2025/26 comes at the time when the government is committed to lift and grow the economy in a low middle-income status guided by the tenfold growth strategy, the fourth national development plan and the NRM Manifesto,” said the PM.

The Executive Director of ACODE, Dr Arthur Bainomugisha on behalf of the Civil Society urged the government during FY 2025/26 to prioritise borrowing for high-return projects and prudent debt management, Human capital development (more funding for education & health), Inclusion and economic empowerment programs (prioritise mindset change & skills development), environment and natural resource governance including domestic and urban waste management & climate change financing. Others are increasing local government financing and staffing levels and fight against corruption.

Damali Ssali on behalf of Private Sector Foundation Uganda said by investing strategically in these priority areas (ATMS), the government can unleash the full potential of Uganda’s private sector and accelerate our progress towards Vision 2040. She said the government, private sector, and development partners must work together to create an enabling environment that supports business growth, innovation, and job creation.

“We, at PSFU, appreciate the government’s positive response to 82% of our proposals for Financial Year 2024/25, and look forward to our continued collaboration,” said Ssali.

The Local Development Partners Group in a statement delivered by Joost Van Ettro, the Netherlands Head of Cooperation, affirmed their partnership in sustaining and accelerating the development outcomes for Uganda and also commended Gov’t for its fiscal consolidation efforts.

The priorities the LG Development Partners want the government to focus on in the budget for FY 2025/26 are Domestic Revenue Mobilisation, Human Capital Development, Agricultural Productivity, Green Growth and Climate Change Adaptation and Mitigation, Public Investment Management & Local government funding.

“We call for continued commitment of the Government on tax administration reforms, rationalization of VAT and income tax exemptions, and several additional tax policy measures, and a better management of current spending,” said The Development Partners encouraged the government to ensure effective budget management at both central and local gov’t level. “We also encourage the Government to continue with the structural reforms to improve fiscal management… We commit to supporting the government of Uganda in its endeavours to use resources effectively and efficiently,” said the Partners.

Uganda Local Government Association (ULGA) President and LC 5 Chairman for Kabarole District Local Government, Richard Rwabuhinga called upon the government during FY 2025/26 to provide for recruitment for more staff in LGs, timely supply of essential drugs, improving physical planning in Local Governments, more resources to improve road infrastructure in LGs and timely disbursement of local revenue to improve service delivery.