By Daniel K. Adebayo | African CEO Magazine
Kampala, January 29 – Uganda’s Ministry of Finance has announced a dramatic reduction in external budget support, signaling a decisive pivot toward strengthening domestic revenue streams.
According to the ministry, external budget support—primarily sourced from loans and grants—will decline by 84.2% year-on-year in the upcoming financial year beginning July. The allocation is expected to fall to 330.9 billion Ugandan shillings ($92.7 million), down sharply from 2.1 trillion shillings in the current fiscal year.
While no official explanation was provided for the steep cut, the ministry emphasized its commitment to “implementing strategies to boost domestic revenue mobilisation.”
Revenue Growth Targets
Uganda projects domestic revenues to rise by 9%, reaching 40.1 trillion shillings in the 2026/27 financial year. This anticipated growth underscores the government’s determination to reduce reliance on external financing and strengthen fiscal independence.
Debt Management Strategy
In addition to curbing external support, Uganda plans to reduce domestic debt issuance by 21.1% in the next financial year. The move is aimed at containing the country’s expanding public debt burden, a growing concern for policymakers and investors alike.
Oil Production Outlook
The East African nation is also preparing to commence crude oil production this year, a milestone expected to reshape its economic landscape and potentially bolster revenue streams in the medium term.
At the current exchange rate, $1 equals 3,568.64 Ugandan shillings.
