The government has proposed a smaller national budget for next financial year than the current, but it’s appropriation is raising discomfort.
The Ministry of Finance, Planning and Economic Development, in its National Budget Framework Paper is proposing a total resource envelop of 57.441 Trillion shillings for the financial year 2025/2026.
Fair, compared to the 52 Trillion-UGX shilling budget for the year 2023/2024, but lower than the 72 Trillion for this year, a huge 14.7 Trillion drop.
Fortunately, there is no huge Bank of Uganda debt to clear equivalent to the 9.1 trillion shilling that pushed up the budget to record levels this year.
The worry, however, is the decline in resources allocated to some social services like education and health and strategic sectors like agriculture, amidst the declining external support and increased debt servicing.
The 2025/2026 financial year budget is the first step in implementing the Fourth National Development Plan (NDP IV), one of the three that are expected to take the country’s economy to 500 billion dollars over the next 15 years.
Faced with declining external financing, the government has to make its priorities right to ensure that the available resources are optimally utilized, but fears are that this might hurt other sectors, especially social services and agriculture.
ISER (Initiative for Social and Economic Rights) Uganda, a local NGO advocating for economic and social welfare, for example, accuses the government of failure to commit itself to increasing resources towards the implementation of free and compulsory primary and secondary education.
They cite government commitment to increase funding to education a tune of 1.4 Trillion Shillings over the next four years starting this financial year, which seems abandoned.
The funds were meant “for the implementation of free and compulsory primary and secondary education in a phased manner in four financial years, starting with 309.162 Billion this financial year. However, the funds were not allocated in the current financial year and the next (2025/26),” says Musa Mugoya, Programme Officer at ISER.
The government launched Universal Primary Education (UPE) in 1997 and later Universal Secondary Education (USE) but the two have been criticised for underperforming especially sue to inadequacies in facilities, human resources and in turn poor quality products.
While they have led to increased enrolment, the completion rates remain very low, a situation blamed on both the government and the communities. This is made worse by the high costs of accessing education in schools which are supported by the government, as they continue to charge fees deemed to much for ordinary Ugandans.
“There is persistent rising cost of education in government grant-aided schools that are not implementing UPE and USE, and private schools yet the cabinet banned the charging of high school fees and other items,” he says, also pointing at the dilapidated and inadequate infrastructure in the UPE schools like classrooms, latrines, desks and staff quarters.
He appeals to President Yoweri Museveni and the Ministry of Finance, Planning and Economic Development to “come true and fulfil his commitment towards the implementation of free and compulsory education by allocating 309.162 Billion Shillings, and to increase funding for construction and renovation of existing infrastructure in schools.”
ISER also calls on the Minister for Education and Sports, Janet Museveni to issue regulations to effect the cabinet ban on selected school fees items. According to the Budget Framework Paper, the Development Plan Implementation (DPI) Programme will receive the largest portion of the total proposed budget, to a tune of 22.129 Trillion.
However, it has decreased by 38.8 percent from 36.138 Trillion that was allocated in financial year 2024/25. The analysts also expressed worry at the nagging challenges faced by the health sector, with the government putting more emphasis on building physical facilities, leaving the sector understaffed.
“The 2023 WHO-supported Health Labour Market Analysis indicates only 44.9 percent of the needed health workers are available. In other words, Uganda needs 342,832 health workers but has only 154,016, leaving a gap of over 188,816 workers,” says Richard Mugenyi, Advocacy and Communications Manager, Reproductive Health Uganda.
He further quotes the Ministry of Health dilemma of shortage of staff in health facilities, yet thousands of medical interns remain not deployed. “In August 2024, the Ministry of Health presented a report to Parliament highlighting the plight of medical interns.
The report revealed that since 2023, 2,706 medical interns have been eligible for deployment but remain underutilized,” says Mugenyi. This also comes amidst widespread complaints by the public and health sector leaders over the worsening understaffing situation, especially at the recently upgraded facilities.
In 2022, the government commenced the upgrade of Health Centres II to Health Centre III, are being upgraded to Health Centres IV. The Health Centres IV are to be upgraded to Community Hospitals, according to the Plan.
However, reports show that while there are facilities being upgraded, this is not being followed deployment of required levels and numbers of staff. The experts are worried that the high debt servicing requirements are not allowing the government to allocate adequate resources to social services and other priority areas.
As of June 2024, Uganda’s total public debt stock stood at 94.7 Trillion Shillings up from the previous year’s 84.8 Trillion, with external debt accounting for 57.2 percent. This is expected to go over 110 Trillion Shillings this and next financial year, according to both the International Monetary Fund and the ministry.
The country plans to spend 27.4 percent of its domestically generated revenue on interest payments which surpasses the 12.5 percent benchmark provided for in the Charter of Fiscal Responsibility.
“This will compromise service delivery as a significant portion of the collected revenue goes to service the debt,” says Pascal Muhangi, a Lecturer at Makerere University Business School and Economist at CSBAG (Civil Society Budget Advocacy Group).
Unfortunately, a lot of the debt servicing is also going to loans acquired but not yet utilized.
“Since 2013 to 2024, the government has borrowed 43.25 Trillion Shillings and spent 26.84 Trillion, meaning that 16.4 Trillion is unspent. This indicates a lack of preparedness by the government before the acquisition of the debt,” Muhangi says.
There is also fear that the next budget will do little in contributing the achievements of the National Development Plan IV, with a lot of resources going to debt servicing, which they call a misalignment of the 2025/2026 budget with the Plan.
“We note with concern the 10.4 Trillion Shillings shortfall in the projected budget of 57.4 Trillion compared to the NDP IV target allocation of UGX 67.8 trillion,” says Jonathan Lubega, Policy Analyst at SEATINI Uganda.
Consequently, while the ATMs (Agro-industrialization, tourism, mineral development including gas & oil as well as science, technology and innovation) target in NDP IV is 4.7 Trillion, they face a shortfall of 2 Trillion Shillings (44 percent), given that the Budget Framework Paper projected allocation is only 2.7 Trillion for these growth pillars, according to Lubega.