Uganda plans to sharply reduce its reliance on external budget support in the next financial year, cutting funding by 84.2% year-on-year, as the government intensifies efforts to boost domestic revenue collection.
In a statement posted on social media platform X late Wednesday, the Ministry of Finance said external budget support—mainly provided through loans and grants—is projected to fall to 330.9 billion Ugandan shillings (approximately $92.7 million) in the financial year beginning in July 2026. This represents a steep decline from 2.1 trillion shillings ($586 million) received in the current financial year.
While the ministry did not provide specific reasons for the reduction, it emphasized that the government is prioritizing strategies to strengthen domestic revenue mobilisation as part of broader fiscal reforms.
According to the ministry, domestic revenue in the 2026/27 financial year is expected to increase by 9%, reaching 40.1 trillion shillings (about $11.2 billion). The projected growth reflects efforts to expand the tax base, improve compliance, and reduce dependence on external financing.
Uganda, which is aiming to commence crude oil production this year, is also planning to scale back domestic debt issuance by 21.1% in the next financial year. The move is intended to ease pressure on the country’s rising public debt, which has increased in recent years due to infrastructure spending and external shocks.
The planned budget adjustments signal a significant shift in Uganda’s fiscal strategy, as authorities seek to improve financial sustainability while navigating economic growth, debt management, and development priorities.
