Export growth, oil expectations anchor new Sh84.4 trillion fiscal blueprint

KAMPALA — Massive export growth and impending commercial oil production form the bedrock of Uganda’s newly unveiled 84.4 trillion Ugandan shilling national budget for the 2026/27 financial year. Presented by Finance Minister Henry Musasizi, the fiscal blueprint positions these strong macroeconomic drivers as the foundation for the country’s ambitious transition into a middle-income economy.

With commercial oil production scheduled to commence later this calendar year, the government projects economic growth will accelerate sharply to 10.2% in the 2026/27 fiscal year, up from an estimated 6.4% in 2025/26. This anticipated petroleum boom is supported by an exponential rise in traditional trade, with total export earnings surging by 204% over the last five years to reach 18.04 billion dollars in the 12 months ending March 2026.

Led by gold, coffee, cocoa and manufactured goods, the export boom helped secure a 2.47 billion dollar balance of payments surplus, the highest for the country in 15 years. Coffee exports alone brought in 2.46 billion dollars during the period. The Middle East remains Uganda’s top export destination at 6.3 billion dollars, followed by Africa at 4.1 billion dollars, the European Union at 2.5 billion dollars and Asia at 2 billion dollars.

To sustain this momentum, the 2026/27 budget—which marks a 12.1 trillion shilling increase from the previous year—gives topmost priority to agro-industrialization, tourism, mineral beneficiation, science, technology and creative arts. These sectors form the core of the government’s Tenfold Growth Strategy, which aims to expand the economy past 500 billion dollars.

Manufacturing and value-addition programs are among the biggest beneficiaries of the new resource allocation. The manufacturing sector received 1.03 trillion shillings, a major jump from the 366.1 billion shillings allocated in the 2025/26 financial year. Out of this, the Uganda Development Corporation was allocated 422.35 billion shillings to spearhead strategic industrial investments.

Funding for agro-industrialization rose to 2.26 trillion shillings, while science, technology and information technology allocations grew to 1.140 trillion shillings. The tourism sector, which saw revenues recover to 1.86 billion dollars in 2025, received an increased allocation of 567.3 billion shillings to help reach its 4 billion dollar annual revenue target.

This trade-led expansion has also driven strong foreign capital inflows. Foreign direct investment reached 3.2 billion dollars in the 12 months ending March 2026, while international remittances grew to 2.8 billion dollars. Additionally, Kampala-based technology and innovation startups drew 30 million dollars in investment in 2025, up from 4 million dollars the previous year.

On the strength of these indicators, domestic revenue collections are projected to grow to 45.9 trillion shillings next year, up from the current 37.2 trillion shilling target. This includes 40.16 trillion shillings from tax revenue, 4.02 trillion shillings from non-tax streams, 1.44 trillion shillings from oil revenue and 339.8 billion shillings from local governments.

However, the fiscal blueprint must balance these export and oil opportunities against heavy recurrent obligations. Public debt stood at 34.8 billion dollars as of December 2025, requiring 32.2 trillion shillings for debt servicing and repayment in the new budget. Combined with a public sector wage bill that has risen to 9.7 trillion shillings to cover enhanced salaries for teachers, health workers and security personnel, these two items consume 41.9 trillion shillings. This total exceeds the country’s entire projected domestic tax revenue of 40.16 trillion shillings.

To protect the economic gains from exports and upcoming oil revenue, Musasizi announced structural implementation reforms. These include eliminating wasteful expenditures, intensifying anti-corruption efforts, streamlining counterpart funding for external projects and enforcing stricter budget discipline to ensure fiscal stability.