Uganda has announced an ambitious and reform-oriented national budget for the fiscal year 2025/26, setting a clear agenda to propel the country toward sustained double-digit economic growth and inclusive development.
Unveiled on June 12th, the budget is themed “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialization, Expansion and Broadening of Services, Digital Transformation, and Market Access,” reflecting a comprehensive approach to economic transformation.
During the EY East Africa Budget Breakfast at Sheraton Hotel, Robert Mbazira highlighted the impressive growth prospects and key policy measures underpinning the budget.
He noted, “Uganda’s economy is projected to grow by approximately 7.0% in FY 2025/26, up from 6.3% in FY 2024/25. This acceleration is largely driven by preparations for oil and gas production, which promise to unlock new economic opportunities and diversify our revenue streams.”
The proposed budget totals UGX 72.3 trillion (about USD 20.09 billion), primarily funded through domestic revenues, which are projected to cover approximately 78.5% of total expenditures.
Mbazira emphasized the government’s commitment to fiscal discipline: “A projected fiscal deficit of 5.5% of GDP reflects ongoing efforts to maintain fiscal stability while investing in critical sectors.”
Inflation has been brought down to 3.4% from a peak of 4.1% in May 2024, thanks to strong export performance and increased foreign direct investment. Meanwhile, the Central Bank’s policy rate remains steady at 9.75%, creating a conducive environment for borrowing and investment to flourish across sectors.
The budget underscores wide-ranging reforms aimed at invigorating private sector participation and ensuring sustainable growth. Notably, the government has approved several tax measures designed to attract investment, foster innovation, and support entrepreneurship.
“Among these areas are the three-year income tax holiday for entrepreneurs launching new businesses after July 2025, provided their initial investments do not exceed UGX 500 million. The second one is the txemptions for non-resident digital service providers engaging with local affiliates, fostering growth in Uganda’s rapidly expanding digital economy among others.” Mbazira.
He stressed that these changes are part of Uganda’s broader strategy to improve competitiveness. “By incentivizing startups and digital service providers, we’re encouraging innovation, expanding our economic base, and creating jobs for our youth,” he said.
Focused Sectors for Transformation
Agriculture remains at the heart of Uganda’s growth plans, with efforts to monetize and modernize commercial farming, improve value chains, and facilitate better market access. Industrialization is also a priority, with a push towards manufacturing, energy development, and infrastructure upgrades.
Furthermore, digital transformation initiatives aim to broaden access to financial services, streamline government services, and promote regional integration. The government’s strategic focus extends to expanding services and boosting exports, positioning Uganda as a regional hub for commerce and industry.
Looking Ahead
Uganda’s FY 2025/26 budget exemplifies the country’s commitment to reform, fiscal prudence, and inclusive growth. With a clear focus on economic diversification, private sector-led development, and digital innovation, Uganda aims to unlock its full economic potential and accelerate toward a prosperous future.
As Mbazira conclude, “Our reforms and investments are aimed at making Uganda a thriving, competitive economy that benefits all citizens. We are confident that these strategic changes will deliver sustainable growth and shared prosperity in the years ahead.”
