The government reduced its net borrowing or fiscal deficit in the month of April, amidst the global supply disruptions and lower revenue collections. According to the Ministry of Finance, net borrowing (the extra money the government had to borrow after accounting for all its cash inflows and outflows) for government operations during April 2026 resulted in a fiscal deficit of of 264.5 billion shillings.
This was lower than the projected deficit of 452.13 billion for the month, as spending on acquisition of non-financial assets during the month was lower than had been planned. In total, government expenses in the month amounted to 2.818 trillion shillings compared to the programmed spending of 2.59 trillion, resulting in an overspend of 229.3 trillion.
The Ministry says it its update that the higher-than planned expenses were mainly registered under grants from the Central Government to local governments, tertiary institutions, and other government agencies including Uganda Airlines.
In late March, Uganda Airlines was included to benefit from a Parliament-approved supplementary budget of close to 1.7 trillion for the Ministry of Works and Transport, including towards delivery of new aircraft. The portion allocate to the airlines is not clear.
Government also spent more than initially planned on purchase of other goods and services as well as on compensation of employees during the month. During the month, government spent 165.2 billion on acquisition of non-financial assets which included infrastructure projects like roads and bridges as well as land for right of way.
However, the total amount spent on acquisition of non-financial assets during the month was significantly lower than the 966.2 billion shillings that had been programmed, mainly on account of slow disbursement of funds for externally financed projects.
Over the month, total revenues, both domestic revenues and grants, amounted to 2.72 trillion shillings translating into a shortfall of 384 billion, as both domestic revenue collections and grants performed below their respective targets for the month. Overall, domestic revenue collections amounted to 2.66 trillion, representing a 90.8 percent performance against the target of 2.93 trillion, with non-tax revenues amounting to 191.4 billion.
Tax revenue collections were short of the 2.63 trillion target by 160.2 billion, with all the three major tax heads registered shortfalls during the month, according to the Uganda Revenue Authority.
Direct domestic taxes registered a 11.46-billion-shilling shortfall on account of lower than planned collections of taxes on interest earned from treasury bills. This was helped by the good performance of the Pay-as-You-Earn and corporate tax.
Similarly, indirect domestic taxes registered a 73.2 billion shortfall against the targeted 785.3 billion, as both excise duty and Value Added Tax (VAT) collections during the month were lower than initially anticipated.
On International trade taxes, almost 989 billion was collected, but it was lower than the targeted 1 trillion shillings. This underperformance was largely because of the low collections from petroleum duty as the fuel imports were impacted by the supply chain disruptions due to the geopolitical tensions in the Middle East.
Hundreds of fuel tankers have been delayed or held in the Middle East as the US/Israeli war on Iran led to disruption of movement across the Strait of Hormuz. Going forward, Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi says they hope to continue getting deliveries as their supplier, Vitol, has refineries in other parts of the world.
In April 2026, the Ugandan Shilling appreciated by 0.4 percent against the US Dollar, trading at an average mid-rate of 3,716.7 shillings per dollar, from 3,730.53 per dollar in March 2026, a rebound from the depreciations registered in the past two months.
This appreciation was mainly driven by increased foreign exchange inflows from exports and portfolio investors, which outstripped demand for the dollar from the manufacturing and energy sectors.
On the other hand, the Shilling continued to register depreciations against other selected major international currencies, particularly the Euro and the British Pound Sterling over the same period.
This performance was mainly attributed to the strengthening of the Euro and the British Pound Sterling against the US Dollar, partly driven by increased portfolio inflows into European debt assets, which were perceived by investors as relatively safer avenues amid continued uncertainty-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
