Overview:
Uganda's proposed 69.4 trillion shilling budget for 2026/2027 targets the creation of 885,000 jobs annually. The framework shifts focus toward industrialization and the oil sector while cutting funding for health and education
KAMPALA, Uganda — The Ugandan government plans to generate nearly 885,000 new jobs annually under a proposed 69.4 trillion shilling national budget for the 2026-2027 fiscal year, focusing on industrialization and double-digit economic growth.
The National Budget Framework Paper outlines a strategy to move households away from subsistence activity through initiatives like the Parish Development Model. Government planners aim to create an average of 884,962 jobs per year during the National Development Plan IV period by broadening the tax base and deepening value addition.
The proposed budget is a decrease from the 72.4 trillion shillings allocated in the current fiscal year, signaling a pivot toward fiscal consolidation as the country prepares for its first commercial oil production.
Dr. Ramathan Ggoobi, the permanent secretary for the Ministry of Finance, said the priorities are intended to lift growth to an average real expansion of about 8% per year. Spending will prioritize agriculture, minerals, oil, gas and tourism, alongside increased investment in science and technology.
Sector Allocations and Economic Shifts
Despite the push for growth, some sectors face significant funding reductions. Human capital development, which covers health and education, is slated for a 14.2% cut, dropping to 9.9 trillion shillings. Funding for sustainable urbanization and housing will be reduced by half, falling to 650 billion shillings as infrastructure projects in secondary cities are scaled back.
In contrast, the government is increasing its investment in the extractives industry. Funding for this sector is projected to nearly double to 1.7 trillion shillings, reflecting an accelerated push to complete the East African Crude Oil Pipeline and mineral quantification projects.
Infrastructure remains a protected priority, with the integrated transport budget set to rise by nearly 6% to 6.8 trillion shillings. The focus will remain on the rehabilitation of the Meter Gauge Railway and road networks essential for trade.
Economic Outlook and Risks
The economy is forecast to grow by 10.4% by the close of the fiscal year, supported by anticipated oil production. Revenue collection for 2026-2027 is projected at 40 trillion shillings, up from the 37.2 trillion shilling target for the current year.
Bank of Uganda Governor Michael Atingi-Ego said the economy has demonstrated resilience, achieving low inflation and a stable exchange rate in 2025. However, economists warn of domestic risks, including fiscal pressures and increased debt levels.
Stephen Kaboyo, an economist, said that while the outlook is promising, the government must maintain fiscal discipline and strengthen revenue mobilization to support its ambitious growth strategy.
The budget theme, “Full Monetization of Uganda’s Economy through Commercial Agriculture, Industrialization, Expanding and Broadening Social Services, Digital Transformation and Market Access,” marks the second year of the Tenfold Growth Strategy. Parliament is expected to scrutinize and approve the framework paper by the end of January.