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Presenting the budget on behalf of President Yoweri Museveni during a sitting on Thursday, 11 June 2026 at Kololo Independence Grounds, Musasizi said the economy is on a firm recovery and expansion path, driven by improved macroeconomic stability and rising investment inflows.
“The economy is stable. Growth is accelerating. Inflation is low. The exchange rate is stable. Exports are rising. Investment is increasing,” he said, adding that Uganda is positioned for what he described as a major structural shift once commercial oil production begins.
The Shs84.4 trillion resource envelope comprises domestic revenues, borrowing, external financing and debt refinancing flows. Domestic revenue is projected at Shs45.96 trillion, of which Shs40.16 trillion will come from tax collections, Shs4.02 trillion from non-tax revenue, Shs1.44 trillion from petroleum revenue and Shs339.8 billion from local government own-source revenue.
Domestic borrowing is projected at Shs11.97 trillion, while external budget support and project financing will contribute Shs1.22 trillion and Shs11.27 trillion respectively. The framework also includes Shs13.97 trillion in domestic debt refinancing, which government says represents rollover of maturing obligations within the domestic debt market.
On expenditure, government has allocated Shs9.71 trillion for wages and salaries, while non-wage recurrent expenditure stands at Shs33.28 trillion. This category includes operational funding for government institutions, service delivery programmes, interest payments, health and education grants, medicines, maintenance of infrastructure, and wealth creation initiatives.
Development expenditure is projected at Shs22.05 trillion. Domestic debt refinancing accounts for Shs13.97 trillion, while Shs4.18 trillion has been set aside for debt amortisation. Additional allocations include Shs547 billion for repayment of domestic debt held at the Bank of Uganda and Shs317 billion for domestic arrears clearance.
Musasizi said government remains committed to stabilising public finances while sustaining investment in key growth sectors.
“A country that finances its development from its own resources enjoys greater policy independence, resilience and sustainability,” he said.
Infrastructure remains a central pillar of the budget, with Shs8.79 trillion allocated to transport systems including roads, bridges, railways, airports and related logistics infrastructure. The minister confirmed that construction of the Standard Gauge Railway from Malaba to Kampala is underway, noting that it is expected to significantly reduce transport costs and improve regional competitiveness.
“Construction of the Standard Gauge Railway is at an advanced stage, and it will transform the cost of doing business in Uganda and the wider region,” Musasizi said.
Government also plans to expand Uganda Airlines by acquiring eight additional aircraft to strengthen tourism, trade and international connectivity.
The oil and gas sector remains a key driver of the projected economic expansion, with ongoing development of the East African Crude Oil Pipeline and central processing facilities. Musasizi told Parliament that drilling activity has already exceeded requirements for first oil.
“Fifty-one additional wells were drilled, bringing the cumulative number to 199 wells, exceeding the 189 wells required for first oil production later this year,” he said.
Health and education continue to receive significant funding, with Shs5.23 trillion allocated to the health sector and Shs6.66 trillion to education. Government also set aside Shs568.65 billion for salary enhancements for primary school teachers and arts teachers in secondary and technical institutions.
In agriculture and wealth creation, Shs2.26 trillion has been allocated to agro-industrialisation, while Shs2.49 trillion will support broader wealth creation programmes including the Parish Development Model, Emyooga, the Agricultural Credit Facility, and other targeted funds. Musasizi said the Parish Development Model is already reshaping rural livelihoods.
“PDM is not merely a financing programme. It is a structural transformation programme. Its objective is to move households from subsistence to commercial production and from survival to enterprise,” he said.
Government also earmarked Shs1.14 trillion for science, technology and innovation, alongside Shs1.03 trillion for industrial development, as part of efforts to expand manufacturing, digital innovation and value addition. Security institutions received Shs10.21 trillion to support defence modernisation, counter-terrorism, intelligence systems and community policing.
On the broader economy, Musasizi projected continued stability, citing improving external balances and rising export earnings. He said Uganda’s foreign exchange reserves had risen to US$6 billion, while exports of goods and services reached US$18.04 billion in the year ending March 2026. Coffee exports alone generated US$2.46 billion.
However, he acknowledged concerns over public debt levels, which he said stood at US$34.86 billion, equivalent to about Shs126.19 trillion or 53 percent of GDP.
“Uganda’s public debt remains sustainable and is projected to stay so over the medium and long term,” he said.
Musasizi concluded that the budget is designed to accelerate Uganda’s transformation agenda, arguing that strategic investments in infrastructure, energy, agriculture and human capital will drive sustained high growth.
“Without peace you cannot create prosperity, without security and rule of law there is no investment, and without stability there is no growth,” he said.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.
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