As Uganda positions itself for middle-income status, the 2025/26 budget for the financial year 2025/26, presented by Finance Minister Matia Kasaija on June 13, 2025, promises to be a game changer for the business landscape.
With a resource envelope of UGX 72.3 trillion, the budget marks a shift from recovery to accelerated growth, aligning with the Fourth National Development Plan (NDP IV) and the final leg of Uganda Vision 2040.
This year’s budget emphasizes wealth creation, industrial transformation, enhanced market access, and digital innovation.
The government aims to stimulate inclusive growth while safeguarding macroeconomic stability and private sector competitiveness.
Policy Direction and National Priorities
“The goal is full monetization of Uganda’s economy through commercial agriculture, industrialization, digital transformation, and market access,” Kasaija said during the budget presentation at Kololo Independence Grounds.
He noted that the fiscal strategy is geared toward building a robust and diversified economic base that supports job creation and domestic enterprise.
Kasaija outlined that Uganda’s economic model is now being guided by the Tenford Economic Growth Strategy, which envisions an economy worth USD 500 billion by 2040.
This policy shift comes as Uganda exits Least Developed Country status, having met key graduation criteria earlier this year.
“The journey to economic transformation is now unstoppable. we are putting in place strong institutions and modern infrastructure to propel Uganda to the next level,” Kasaija declared.
Macroeconomic Stability and Tax Policy
Uganda’s macroeconomic fundamentals continue to hold strong, with GDP growth projected at 7% in FY2025/26, up from 6.1% the previous year.
Inflation has cooled to 3.4% as of May 2025, while the Uganda Shilling has appreciated by 4%, making it Africa’s most stable currency, according to regional indices.
On the tax front, the government has embarked on major reforms to improve compliance and widen the tax base.
These include the adoption of digital tools for tax collection, stricter oversight to combat corruption, and targeted incentives for priority sectors.
“We are no longer offering blanket exemptions; only strategic industries that drive industrialization, innovation, and export expansion will benefit from tax incentives,” Kasaija said.
Domestic revenue collection is expected to rise from UGX 31.9 trillion in FY2024/25 to UGX 37.2 trillion in FY2025/26, financing over 60% of the budget.
Wealth Creation and Financing for Businesses
The 2025/26 budget increases support for enterprise development through programs such as the Uganda Development Bank (UDB), Parish Development Model (PDM), Emyooga, and the Agricultural Credit Facility (ACF).
These interventions aim to expand access to affordable capital and unlock productivity among youth, women, and small businesses.
UDB has been allocated UGX 1 trillion to scale up its lending to agro-industrial, technological, and manufacturing ventures.
The Parish Development Model, now fully digitized, is reaching over 2.6 million households with grants and low-interest loans to invest in crop farming, livestock, and micro-enterprises.
Each parish will receive UGX 100 million annually, and the government has committed to covering all bank charges to remove access barriers.
In total, UGX 3.05 trillion has been earmarked for enterprise financing and small business development, positioning the private sector as a key pillar of economic transformation.
Sector Growth and Industrialization Agenda
Uganda’s industrial base is expanding rapidly. The manufacturing sector has grown from 31,000 to 50,000 enterprises in just over a decade, driven by deliberate policy support.
New export products such as pharmaceuticals, electronics, vaccines, and ICT equipment are replacing the country’s traditional commodity dependence.
“The industrial sector is the engine of structural transformation. We are targeting value-added production and regional competitiveness,” Kasaija emphasized
Exports reached a record USD 11.8 billion by March 2025, up from USD 9.56 billion the previous year.
Gold and coffee remained top earners, but growth was also recorded in processed foods, milk, sugar, fish, and base metals.
Tourism revenues increased by 13.1% to USD 1.52 billion, reflecting a rebound in the service sector.
To support industrial growth, the government has committed UGX 1.5 trillion toward infrastructure, innovation hubs, and industrial parks, especially in strategic corridors like Mbale, Gulu, and Hoima.
Digital Economy and Technology
The 2025/26 budget reaffirms the government’s commitment to building a digitally enabled economy. Internet penetration has reached 53%, and the national ICT backbone now covers 4,300 kilometres.
Digital transformation is prioritized across education, health, agriculture, and governance. The government plans to digitize tax compliance, health records, and business registration to improve service delivery and reduce corruption.
Infrastructure and Regional Integration
To boost trade and regional integration, Uganda continues to invest in roads, energy, and water transport. Over 2,051 MW of electricity is now available, four times the supply in 2010. Access to electricity has grown from 11% to 57% of the population.
Tarmac roads now link all regions and border posts, facilitating regional exports and reducing transport costs for producers. Investments are also ongoing in inland ports and railway rehabilitation.
“Our infrastructure expansion is a deliberate enabler of private investment. Without roads, energy, and logistics, no business can grow,” said Kasaija.
Social Investment and Human Capital
A healthy and educated workforce is critical to Uganda’s development strategy. The government has allocated UGX 11.44 trillion to health, education, and social protection, ensuring inclusive development alongside economic growth.
UGX 5.87 trillion is dedicated to health, supporting new regional blood banks, oxygen plants, CT scans, and preventive health programs.
In education, UGX 5.04 trillion will sustain UPE, USE, and TVET reforms, as well as build infrastructure for the upcoming CHAN 2027 tournament.
Social protection programs such as SAGE, Youth Livelihood Fund, and UWEP continue to receive funding, targeting vulnerable groups with grants, training, and enterprise support.
A Pro-Business, People-Centered Budget
Uganda’s 2025/26 budget offers a blend of fiscal discipline, pro-business policies, and social investment aimed at accelerating inclusive growth.
By anchoring development in wealth creation, industrialization, and digital transformation, the government has sent a clear message: private sector growth is not only welcome but essential.
With strategic capital injections, infrastructure expansion, and tax reforms underway, businesses large and small can expect a more enabling environment in the year ahead.
If implemented effectively, the budget could deliver tangible progress in income growth, job creation, and Uganda’s journey toward economic sovereignty.
“Let us work together to build a Uganda that is prosperous, inclusive, and ready for the future,” Kasaija concluded.
