By KT Reporter
The FY 2025/26 National Budget Framework Paper (NBFP) is to emphasize high-growth sectors even as analysts warn that rising public debt and persistent financing gaps could undermine implementation.
State Minister for Finance in charge of General Duties, Henry Musasizi, presented the NBFP to Parliament on Tuesday during a plenary session chaired by Deputy Speaker Thomas Tayebwa, in line with Article 155 of the Constitution and the Public Finance Management Act, which requires submission by December 31.
“This Budget Framework Paper sets the foundation for full monetisation of Uganda’s economy, higher household incomes, and job creation,” Musasizi told MPs, describing FY 2025/26 as the first year of the Fourth National Development Plan (NDP IV).
The NBFP is themed: “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanded Social Services, Digital Transformation, and Market Access.”
The theme signals a strategic shift toward wealth-creating sectors, moving beyond last year’s emphasis on post-pandemic recovery and inflation control. Uganda’s economy has recorded a strong recovery, expanding by 6.1 per cent in FY 2023/24, up from 5.3 per cent the previous year.
Growth is projected at 7 per cent next year, driven largely by infrastructure development, foreign direct investment, manufacturing, and the anticipated start of oil production.
Gross Domestic Product rose to Shs202.7 trillion (USD 53.7 billion), inflation declined to 2.9 per cent in November 2024—below the Bank of Uganda’s 5 per cent target—and non-performing loans fell to 4.95 per cent. Despite these gains, fiscal pressures remain significant.
Domestic revenue is projected at Shs33.68 trillion against total expenditure of Shs46.5 trillion, while borrowing has been capped at Shs4.01 trillion to protect private sector credit. Public debt stands at 46.8 per cent of GDP—below regional thresholds—but now consumes nearly one-third of domestic revenue, a concern repeatedly raised by MPs.
Agro-industrialisation is central to the Ten-Fold Growth Strategy under the ATMS framework (Agriculture, Tourism, Minerals, and Science and Technology). Although agriculture employs over 70 per cent of Ugandans, contributes 24 per cent of GDP, and generated UGX 43.9 trillion in FY 2022/23, it receives only 2.5 per cent of the national budget. While NDP IV requires Shs2.606 trillion for the sector, only UGX 1.455 trillion has been allocated.
Tourism faces similar funding constraints. Although tourism receipts increased by 22.3 per cent to USD 1.39 billion, with a government target of USD 4 billion by 2030, sector funding has been cut from UGX 311 billion to Shs175.98 billion, leaving a financing gap of UGX 288 billion.
Oil and gas have emerged as another key growth driver. Flagship projects—including Tilenga, Kingfisher, the East African Crude Oil Pipeline (EACOP), and Kabalega International Airport—are expected to boost exports, investment, and government revenue.
Eng. Irene Bateebe, Permanent Secretary at the Ministry of Energy and Mineral Development, said the Sustainable Extractives Industry Programme will prioritise efficient and gender-equitable resource use, value addition, and GDP growth in line with Vision 2040.
To manage fiscal constraints, the government has proposed cost-containment measures, including a freeze on the creation of new administrative units, restrictions on vehicle purchases, and expanded use of ICT-based tax systems.
These measures aim to support gender equity, climate resilience, and balanced regional development, with the Regional Development Programme now extended to all local governments under NDP IV.
Minister of Local Government Raphael Magyezi highlighted achievements under the Parish Development Model (PDM), including the capitalisation of 10,594 PDM SACCOs with UGX 1.059 trillion, benefiting more than one million households—52 per cent of them women. Additional gains include investments in agro-processing facilities, markets, water schemes, and support for vulnerable groups.
Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury, said the Development Plan Implementation Programme will focus on evidence-based planning, climate- and gender-responsive data, and stronger alignment with NGOs and development partners.
Speaker of Parliament Anita Annet Among underscored the importance of the Legislation, Oversight, and Representation Programme in strengthening governance, accountability, and citizen participation.
-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
