KAMPALA (Reuters) – 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 finance ministry said Friday.
Uganda’s rising government debt has fueled concerns among opposition politicians and also prompted ratings agencies Fitch and Moody’s (NYSE:) to downgrade the country’s credit rating.
The government says loans have been used to boost economic growth, which has been faster than many of its African peers since the COVID-19 pandemic.
Total government expenditure for 2025/2026 is estimated at 57.4 trillion Ugandan shillings ($15.56 billion), compared to the 72.1 trillion shillings planned for the current financial year, a draft budget document from the ministry showed.
The government plans to borrow about 4.01 trillion shillings ($1.09 billion) from the domestic market through government bonds over the same period, down 53.9% from 2024/25, it said.
The ministry gave no reason for the decline in spending or borrowing figures.
Ramathan Ggoobi, the permanent secretary of the Ministry of Finance, said the government’s financing priorities would be in the areas of agro-industrialization, tourism and minerals, including petroleum.
Ggoobi said external debt repayments are expected to rise from 3.1 trillion shillings in the current fiscal to 4.03 trillion shillings in 2025/26, adding to pressure on domestic spending.
($1 = 3,689,0000 Ugandan shillings)
