Uganda plans to scale back government spending and domestic borrowing in its next fiscal year as it seeks to contain rising debt and interest costs, according to a Finance Ministry paper released Wednesday.
Public expenditure for the 2026/27 financial year, which begins in July, is projected at 69.4 trillion Ugandan shillings ($19.9 billion).
That represents a 4.1 percent decline from the 72.4 trillion shillings budgeted in the current year.
The government also intends to cut domestic borrowing by more than a fifth. Planned issuance of Treasury bills and bonds will fall to 9 trillion shillings, down 21.1 percent from the previous year.
The ministry said the move reflects a “need to maintain debt in sustainable levels” and to lower interest payments as a share of revenues.
Uganda’s public debt has grown sharply in recent years, driven by infrastructure projects and pandemic-era spending, with interest costs increasingly squeezing the budget.
The planned retrenchment signals an effort by policymakers to stabilize the fiscal outlook as the country prepares for its long-anticipated oil production.
According to the Finance Ministry, the government will prioritize completing the East African Crude Oil Pipeline, a project seen as critical for unlocking commercial crude output.
Spending will also focus on mineral quantification for iron ore, gold and copper deposits, development of a refinery, and progress on the long-delayed standard gauge railway.
Uganda, which discovered commercial oil reserves nearly two decades ago, is aiming to begin production before the decade’s end.
Officials see the pipeline and related infrastructure as key to transforming the economy, but delays, financing hurdles, and environmental challenges have slowed progress.
