Overview:
Presenting the budget at Kololo Independence Grounds on June 12, 2025, Finance Minister Matia Kasaija said the theme for the financial year remains “Full Monetisation of the Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access.”
Uganda’s national budget for the Financial Year 2025/26 has been unveiled with a total resource envelope of UGX 72.4 trillion, reflecting the government’s continued emphasis on commercial agriculture, industrialisation, science and innovation, service expansion, and digital transformation.
Presenting the budget at Kololo Independence Grounds on June 12, 2025, Finance Minister Matia Kasaija said the theme for the financial year remains “Full Monetisation of the Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access.”
Economic Performance and Projections
The economy is projected to grow by 7% in 2025/26 and reach a GDP size of UGX 254.2 trillion (USD 66.1 billion), with per capita income expected to rise to USD 1,324, up from USD 1,263 the previous year. Inflation stood at 3.4% in May 2025.
Minister Kasaija attributed this growth to sustained investments in infrastructure, peace and stability, science-led innovation, and wealth creation initiatives such as the Parish Development Model (PDM), Emyooga, and INVITE and GROW projects.
Revenue and Financing Strategy
The government plans to collect UGX 37.2 trillion in domestic revenue, with UGX 33.9 trillion from taxes and UGX 3.3 trillion from non-tax sources. The remaining budget will be financed through domestic borrowing (UGX 11.4 trillion), external loans and grants (UGX 13.4 trillion), and refinancing of domestic debt (UGX 10 trillion).
To improve revenue collection, the Uganda Revenue Authority (URA) will focus on widening the tax base, enhancing digital enforcement tools such as EFRIS, and eliminating tax leakages through legal reforms.
Key Expenditures
Budget allocations are as follows:
- Wages and salaries: UGX 8.57 trillion
- Non-wage recurrent expenditure: UGX 28.33 trillion
- Development expenditure: UGX 18.24 trillion
- Domestic debt refinancing: UGX 10.03 trillion
- Interest payments: UGX 11.33 trillion
- Local government funding: UGX 328.6 billion.
Priority Sectors
1. Health – UGX 721 billion has been allocated for medicines, immunisation, and upgrading health infrastructure. New blood banks and oxygen plants have been commissioned, and specialised facilities for cancer and cardiac care are being expanded.
2. Education – UGX 5.04 trillion will support Universal Primary and Secondary Education, rehabilitation of traditional schools, recruitment of teachers, textbook supply, and the operationalisation of Bunyoro and Busoga universities.
3. Social Protection – Over UGX 811 billion will support elderly persons under SAGE, and billions more for youth and women entrepreneurship, as well as support for persons with disabilities.
4. Science, Technology and Innovation – The government continues to prioritise the biotechnology and pharmaceutical sector, including support to Dei BioPharma in Matugga, which has begun manufacturing medicines. Over UGX 724 billion has been invested in the facility so far.
5. Infrastructure – Road connectivity and electricity coverage have expanded dramatically, with 57% of Ugandans now having access to power, up from 11% in 2010.
New Tax Measures
An additional UGX 538.6 billion will be raised through new tax policy reforms. These include removal of ambiguous provisions, digital compliance enforcement, and rationalisation of tax exemptions to support industrial policy.
Debt and Fiscal Strategy
To manage public debt, the government will increase concessional borrowing and enhance domestic mobilisation. Measures will also be taken to eliminate UGX 1.4 trillion in domestic arrears, with strict controls to avoid future accumulation.
Outlook
Minister Kasaija concluded by urging Ugandans to take advantage of the opportunities presented in the budget, particularly in agriculture, services, and industry. He reaffirmed the government’s commitment to transforming Uganda into a USD 500 billion economy by 2040.
“This budget is dedicated to wealth creators – the youth, women, entrepreneurs, scientists, farmers, and manufacturers. Uganda’s takeoff is no longer a dream. It is a reality in motion,” he said.