Kampala Unveils Shs 84.4 Trillion Spending Plan as Oil Production Nears First Output

June 15, 2026

Mintesinot Nigussie

Uganda has unveiled an Shs 84.4 trillion national budget framework for the 2026/2027 financial year, placing oil production, infrastructure expansion and industrial development at the centre of its fiscal strategy as the country moves closer to first commercial output.

The budget was presented in Kampala at Kololo Independence Grounds by Finance Minister Henry Musasizi on behalf of President Yoweri Museveni during a parliamentary sitting on Thursday.

Musasizi said the economy was on a recovery and expansion trajectory, supported by macroeconomic stability, improving investment inflows and strengthening external accounts. He said the country was positioned for a structural shift once commercial oil production begins.

“The economy is stable. Growth is accelerating. Inflation is low. The exchange rate is stable. Exports are rising. Investment is increasing,” he said.

The budget framework is built on a resource envelope comprising domestic revenues, domestic borrowing, external financing and debt refinancing. Domestic revenue is projected at Shs 45.96 trillion, with Shs 40.16 trillion expected from tax collections, Shs 4.02 trillion from non tax revenue, Shs 1.44 trillion from petroleum-related income and Shs 339.8 billion from local government own source revenue.

Domestic borrowing is projected at Shs 11.97 trillion, while external financing and budget support are expected to contribute a combined Shs 12.49 trillion. The framework also includes Shs 13.97 trillion in domestic debt refinancing linked to maturing obligations.

On spending, the government has allocated Shs 9.71 trillion for wages and salaries and Shs 33.28 trillion for non wage recurrent expenditure, covering public administration, social services, interest payments and infrastructure maintenance.

Development spending is set at Shs 22.05 trillion. Debt amortisation accounts for Shs 4.18 trillion, alongside allocations of Shs 547 billion for repayment of Bank of Uganda held domestic debt and Shs 317 billion for clearance of domestic arrears.

Infrastructure remains a central pillar of the budget, with Shs 8.79 trillion directed to transport projects including roads, bridges, railways and airports. Musasizi confirmed that construction of the Standard Gauge Railway between Malaba and Kampala is under way, describing it as critical to lowering transport costs and improving regional trade competitiveness.