Uganda government’s latest budget document has triggered both applause and concern among civil society agencies, citing improvement in the level of financial reforms as well as challenges that remain to be tackled. The 2025/26 budget has been substantially reduced by Shs 14.695 trillion from Shs 72.137 trillion current fiscal year to Shs 57.441 trillion. This reduction aims to ease financial pressure and improve the country’s ability to generate its own revenue rather than relying on external funding.

During a CSO pre-budget dialogue FY2025/26 on Thursday 13/02/2025 at Imperial Royale Hotel in Kampala, Julius Mukunda, the Director of the Civil Society Budget Advocacy Group (CSBAG), hailed the government for increasing domestic revenues. He noted that 8% of the new budget will be done through internal sources of revenue, a major advancement towards fiscal independence. Mukunda emphasized that this reform is clear evidence of how much the government values the place of sustainability within national budget-making.

Among the essential reforms in the budget framework paper are reducing domestic borrowing by Shs 4 trillion. Previously, the government borrowed Shs 8 trillion to meet expenditure, but the move is aimed at unloading the country’s debt burden. The government is also focused on reducing dependence on foreign financing, an issue that has been surrounding financial stability for centuries. Other measures of cost-cutting include stopping the creation of new administrative departments, which has been a huge expense, and spending money on areas of development.

Even with these encouraging developments, Mukunda and other leaders in civil society have complained of underfunding in some of the most important sectors like tourism, agriculture, mineral development, and ICT. These are the sectors that are crucial to Uganda’s economic development, and failure to develop them may hamper the nation’s advancement. Mukunda emphasized that more investment in these sectors would increase employment, innovation, and generation of revenue.

Civil society organizations also decried what they see as unnecessary government expenditure that squanders resources on non-priority needs. Such expenditures among them are Shs 298.525 billion for special meals, Shs 132.251 billion for blankets and footwears for senior government officials, and Shs 237.021 billion for workshops and conferences. These funds, according to Mukunda, are areas where cost-cutting can be employed to significantly improve resource utilization. He urged citizens to stand up against profligacy in spending and demand more accountability in the process of budgeting.

Speaking on behalf of the Ministry of Finance, Planning, and Economic Development, senior economist David Okwii defended the government’s plan, explaining that the budget will be funded from a mix of domestic and external resources. However, he explained that there is still an effort to reduce the amount of external borrowing and increase internal revenue collection. The government has adopted a 10-fold growth plan centered on agro-industrialization and monetization of trade for the purpose of stimulating local production and economic independence.

One of the priority areas for this strategy is to ensure access to low-cost credit for all interested parties in both the agricultural and industrial sectors. Okwii stressed that however one is at production, value addition, or exports, one should have access to long-term, low-cost credit. Short-term credit, he clarified, is costly and difficult to sustain, and it makes it unaffordable for companies to grow. Through this strategy, the government aims to galvanize economic activity and provide new opportunities for Ugandans.

Despite the government’s commitment to reforms, challenges continue to be experienced in the private sector. The Kampala City Traders Association (KACITA) Chairman, Thadeus Musoke Nagenda, blamed the government for not consulting business owners when making policies. In his view, without consultation, most of these plans find their way onto the shelves of government offices, and it becomes difficult for businesses to effect them.

Musoke called for increased knowledge sharing between the government and the private sector, noting that for effective policy implementation, they must work together. He counseled the authorities to involve traders and entrepreneurs in decision-making regarding economic policies to enable them to be pragmatic enough to operate within the limitations of the marketplace.

The budget reforms have also set off broader issues of transparency and accountability. While the government has initiated reassuring moves towards debt reduction and increased local revenues, civil society remains on its guard. Activists like Mukunda have called for citizens to remain engaged in the budget process, demanding prudent spending and fair resource distribution.

The success of these reforms will depend on implementation. Provided that the government can invest in strategic areas and keep unnecessary expenditure to a minimum, Uganda could move towards financial autonomy. However, continued consultation among the government, civil society, and the private sector will be critical in ensuring that the changes find expression in real economic development.

As the 2025/26 financial year approaches, Uganda stands at a crossroads. The decisions made today will shape the economic destiny of the nation. By making sustainable revenue collection, prudent spending, and people-oriented policymaking top priorities, the government will have the chance to build a stronger and more resilient economy. The coming months will be a test of wills, and all eyes will be on how these policies are being implemented for the benefit of the people of Uganda.