Uganda’s Government to Cut Spending and Borrowing in 2025/26 Fiscal Year
Uganda is taking steps to reduce its spending and borrowing in the upcoming fiscal year, according to the finance ministry. This move comes in response to concerns about the country’s rising public debt, which has led to credit rating downgrades from agencies like Fitch and Moody’s.
The government’s strategy has been to use borrowing to drive economic growth, which has outpaced many other African nations in the wake of the COVID-19 pandemic.
For the 2025/26 fiscal year, Uganda plans to decrease overall government spending to 57.4 trillion Ugandan shillings ($15.56 billion) from 72.1 trillion shillings in the current year. Additionally, domestic borrowing is expected to be reduced by 53.9% to 4.01 trillion shillings ($1.09 billion) through Treasury bonds.
The finance ministry has highlighted funding priorities in key sectors such as agro-industrialization, tourism, and minerals, including petroleum. However, external debt repayments are projected to increase, putting pressure on domestic spending.
These financial decisions could have significant implications for Uganda’s economy and its citizens in the coming years.
($1 = 3,689.0000 Ugandan shillings)