Uganda is considering a lower budget for the 2025–2026 fiscal year as technocrats attempt to strike a compromise between expenditure objectives and numerous funding shortages. This comes in the face of mounting state debt and growing electoral anxiety.
Despite sharing similar issues, other neighbouring East African countries, including Kenya and Tanzania, have declared plans to increase spending.
Uganda’s total resource envelope for the fiscal year 2025–2026 was valued at USh57.4 trillion ($15.5 billion) at the end of December. Earlier last month, it was increased to USh66 trillion ($17.8 billion) by adding more spending items that the Cabinet had supported.Uganda’s current budget of USh72 trillion ($19 billion) is the highest in its budgeting history.
The removal of one-time expense items that were included in the current budget is primarily responsible for the reduced resource envelope available for the upcoming fiscal year starting July 2025 to June 2026.
These include “last-minute” financing for certain oil and gas infrastructure-related projects that allegedly missed out on donor funding, a USh556 billion ($149.9 million) subsidy given to a local pharmaceutical manufacturing company, and the repayment of a USh9 trillion ($2 billion) loan that the government owes to the Bank of Uganda (BOU).
In Kenya, President William Ruto’s government has increased its spending target for the fiscal year 2025–2026 by 7.69 per cent to KSh4.2 trillion ($32.55 billion).
This is after the state’s commitment to implementing its proposed austerity measures waned.
The 2025/2026 fiscal year’s expenditures pale in comparison to the KSh3.9 trillion ($30.23 billion) spent in the current fiscal year (2024/2025), whose implementation is beset with challenges.The administration hopes to finance the bloated budget through domestic revenue collections and continued borrowing from the domestic market.
Tanzania’s 2024–2025 budget will now exceed $19 billion after the Tanzanian Parliament authorized an increase of $363.7 million.
The increase is the result of additional funding from the African Development Bank and the International Monetary Fund (IMF).
