Uganda’s fiscal deficit widens sharply in November on revenue shortfalls, higher spending

Kampala — Uganda’s fiscal position deteriorated sharply in November 2025, with preliminary data showing a fiscal deficit of Shs2.87 trillion, more than double the level that had been programmed for the month.

According to the Performance of the Economy Report for November 2025 released by the Ministry of Finance, Planning and Economic Development, government’s net borrowing stood at Shs2,865.62 billion, compared to a planned deficit of Shs1,189.83 billion. The wider gap was largely driven by weaker-than-expected revenue collections and higher expenditure during the period.

Total revenues, including grants, amounted to Shs2,749.11 billion, representing 80.8 percent of the monthly target of Shs3,403.48 billion. Domestic revenue performed relatively better, reaching Shs2,710.82 billion, or 86.7 percent of the target, but still fell short by Shs415.8 billion.

Tax revenue totalled Shs2,537.75 billion, equivalent to 89.7 percent of the programmed amount, while non-tax revenue underperformed significantly, with collections of Shs173.07 billion, just 58.4 percent of the target.

The largest revenue shortfall came from grants. Government received only Shs38.29 billion in grants during November, representing 13.8 percent of the expected Shs276.87 billion, all of which had been earmarked for project support.

On the expenditure side, total government spending reached Shs4,614.41 billion, exceeding the programmed level of Shs3,811.66 billion by Shs802.74 billion. This represented an execution rate of 121.1 percent for the month.

Spending pressures were particularly evident in grants, which more than doubled the planned amount. Grant expenditures rose to Shs1,492.96 billion, against a budgeted Shs661.95 billion, an overrun of Shs831.01 billion.

Expenditure on goods and services also exceeded projections, coming in at Shs1,234.55 billion, or 105 percent of the programmed amount. In contrast, compensation of employees was slightly below target at Shs508.01 billion, while interest payments were fully in line with the budget at Shs1,229.93 billion, split between domestic and external debt servicing.

As a result of the revenue shortfalls and spending overruns, the gross operating balance deteriorated sharply, posting a deficit of Shs2,076.81 billion compared to a planned shortfall of Shs408.18 billion.

Spending on non-financial assets, which largely reflects development expenditure, remained broadly on track at Shs788.81 billion, marginally above the programmed Shs781.65 billion.

Economists say the widening fiscal deficit underscores the pressure on public finances amid constrained revenue inflows and rising expenditure demands, reinforcing concerns about borrowing levels and fiscal sustainability.

The Finance ministry has previously indicated that closing revenue gaps, improving grant absorption and tightening expenditure controls will be critical to keeping the fiscal deficit within sustainable limits as the financial year progresses.