Economists warn sh8.1 trillion supplementary budget risks debt sustainability

KAMPALA, UGANDA — Uganda’s massive sh8.1 trillion supplementary budget has drawn sharp criticism from economists and civil society groups, who warn that the expenditure package is worsening the country’s debt sustainability by prioritizing political and non-essential items over productive investments.

The controversy surrounds several allocations that critics argue do not qualify as supplementary expenditure because they are predictable activities. Julius Mukunda, the executive director of the Civil Society Budget Advocacy Group, stated that the package exposes deep fiscal indiscipline. “Our analysis shows that these items don’t qualify as supplementary expenditure,” Mukunda said, adding that by funding these items now, the government is worsening our debt sustainability.

Richard Ssempala, an economist from Makerere University, echoed the concern about Uganda’s shrinking fiscal space, calling for better prioritization of spending. “Are some of these items so essential? Can’t some be postponed or forgone altogether?” Ssempala asked. He argued that Uganda needs to spend on high-payoff ventures, not “consumptive politics.”

The most contentious items include a sh300 billion allocation to State House for youth mobilization tours, remodeling of the Youth Livelihood Fund, and classified expenditures. The Shadow Finance Minister, Ibrahim Ssemujju Nganda, asserted that this sum reflects political motives, noting that the money allocated to the residence of the leader is equal to the budget for fighting poverty under the Parish Development Model.

Other allocations drawing scrutiny include a sh23.89 billion bonus payout to Uganda Revenue Authority staff for exceeding their revenue collection target, and sh1.19 billion for three new vehicles for the prime minister. Lawmakers also questioned the sh37 billion subsidy for a static synchronous compensator to stabilize power supply for Roofings Limited, a privately owned steel manufacturer. The Leader of Opposition, Joel Ssenyonyi, called this a direct subsidy to a private, wealthy individual.

Despite the government’s defenses—including Speaker Anita Among insisting the expenditures are legitimate, and the Ministry of Energy Permanent Secretary Irene Batebe arguing industrial support strengthens the economy—analysts are demanding greater transparency, clearer justification for these supplementary requests, and more stringent scrutiny of politically sensitive spending during the current campaign period.