The Ugandan government plans to cut spending by just over a fifth and domestic borrowing by just over half in the 2025/26 fiscal year (July-June), the ministry of finances Friday.
Uganda’s rising public debt has fueled concerns among opposition politicians and also prompted rating agencies Fitch and Moody’s to cut the country’s credit rating.
The government says the borrowing has been used to boost economic growth, which has been faster than many of its African peers since the COVID-19 pandemic.
Overall government spending for 2025/26 is expected to be 57.4 trillion Ugandan shillings ($15.56 billion), up from 72.1 trillion shillings forecast for the current financial year, according to a draft budget document of the ministry.
The government plans to borrow about 4.01 trillion shillings ($1.09 billion) domestically through Treasury bonds during the same period, 53.9 percent less than in 2024/25, according to the document.
The ministry did not give a reason for the drop in spending or borrowing.
Ramathan Ggoobi, permanent secretary at the Ministry of Finance, said the government’s funding priorities would be agro-industrialization, tourism and minerals, including oil.
Mr Ggoobi said external debt repayments are expected to reach 4.03 trillion shillings in 2025/26, compared to 3.1 trillion shillings in the current fiscal year, which will further squeeze domestic spending.
($1 = 3,689.0000 Ugandan shillings)
