Uganda has unveiled a Shs84.4 trillion (US$22 billion) national budget framework for the 2026/27 financial year, projecting ambitious economic growth of 10.2 percent as the government leans heavily on oil production, infrastructure expansion and industrialisation to drive long-term transformation.
Finance Minister Henry Musasizi presented the budget on behalf of President Yoweri Museveni at Kololo Independence Grounds, describing the economy as “stable” and entering a phase of accelerated expansion supported by macroeconomic stability, rising exports and increasing investment inflows.
“The economy is stable. Growth is accelerating. Inflation is low. The exchange rate is stable. Exports are rising. Investment is increasing,” Musasizi said, adding that Uganda is on the cusp of a structural shift driven by commercial oil production expected in the near term.
The budget’s financing framework combines domestic revenue, external financing and borrowing, with domestic revenues projected at Shs45.96 trillion. Of this, tax collections are expected to contribute Shs40.16 trillion, while non-tax revenue, petroleum income and local government revenues will account for the remainder.
Domestic borrowing is projected at Shs11.97 trillion, while external project financing and budget support are expected to provide Shs12.49 trillion combined. An additional Shs13.97 trillion is allocated to refinancing maturing domestic debt.
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On the expenditure side, the government has prioritised infrastructure, human capital development and debt management. Development spending is projected at Shs22.05 trillion, with significant allocations to transport, energy, education and health.
Infrastructure remains a central pillar of the plan, receiving Shs8.79 trillion for roads, railways, airports and logistics systems. A flagship component is the ongoing Standard Gauge Railway project linking Malaba to Kampala, which officials say will reduce transport costs and improve regional trade competitiveness.
“The Standard Gauge Railway is at an advanced stage and will transform the cost of doing business in Uganda and the wider region,” Musasizi said.
Uganda is also expanding its national carrier, Uganda Airlines, with plans to acquire eight additional aircraft aimed at boosting tourism, trade connectivity and international passenger traffic.
A major driver of the projected growth is the oil and gas sector, particularly the East African Crude Oil Pipeline and associated production facilities. Government officials say drilling activity has already surpassed requirements for first oil production, with 199 wells completed against a target of 189.
Social sectors also feature prominently in the budget. The health sector has been allocated Shs5.23 trillion, while education receives Shs6.66 trillion. The government also announced Shs568.65 billion for teacher salary enhancements across primary and secondary institutions.
In agriculture and rural development, Shs2.26 trillion has been set aside for agro-industrialisation, while Shs2.49 trillion will fund broader wealth creation initiatives such as the Parish Development Model, Emyooga and agricultural credit schemes. Officials say these programmes are aimed at shifting households from subsistence farming to commercial production.
Science, technology and innovation received Shs1.14 trillion, while industrial development was allocated Shs1.03 trillion, reflecting efforts to diversify the economy and expand manufacturing and value addition.
The security sector remains heavily funded, with Shs10.21 trillion allocated to defence, intelligence and policing operations, underscoring government priorities around stability and national security.
Uganda’s external position has also shown improvement, with foreign exchange reserves rising to $6 billion and exports of goods and services reaching $18.04 billion in the year to March 2026. Coffee exports alone generated $2.46 billion, highlighting the continued importance of agriculture to foreign earnings.
However, public debt remains a concern. The government estimates total debt at $34.86 billion, equivalent to about 53 percent of GDP. Despite this, officials insist the debt remains sustainable over the medium to long term.
“Uganda’s public debt remains sustainable and is projected to stay so over the medium and long term,” Musasizi said.
Economists say the success of the ambitious growth target will depend on timely execution of infrastructure projects, efficient oil sector development, and the government’s ability to manage rising debt levels while maintaining macroeconomic stability.
Still, authorities argue that the combination of oil revenues, infrastructure investment and productivity gains in agriculture and industry could position Uganda for one of the fastest growth rates in the region if reforms are implemented effectively.
