Finance Minister Kasaija Delivers Budget Strategy for FY 2025/2026

While delivering the Budget Strategy at Speke Resort Munyonyo, Finance Minister Matia Kasaija said the first year of the implementation of the 4th National Development Plan (NDP IV) will be anchored on 4 key growth areas underpinned by the goal of full monetization and formalization of the economy: Agro-Industrialization, Tourism Development, Mineral-based Industrial Development including Oil and Gas, and Science, Technology and Innovation including ICT (the Knowledge Economy) (ATMS). 

Kasaija said in the last quarter of FY 2023/24, GDP growth was recorded at 6.7% and at the end of the FY, it grew at 6% up from an average of 4.1% for the period FY 2019/20 to FY 2022/23.

He said the size of the economy has increased from Shs.183 trillion (USD 48.8 billion) registered in FY 2022/23 to about Shs.202.13 trillion (USD 53.2 billion) in FY 2023/24. 

The Minister said inflation at (3.5%) for August,2024 has been contained within the target rate, adding that the shilling and interest rates have remained stable.

To finance the budget for FY 2025/26,the Minister said resources in the current budget will be repurposed in addition to improving allocative efficiency to focus on the prioritized sectors of the economy. Other measures include: Effective implementation of the domestic revenue mobilization strategy and diversifying public finance options by implementing the Public Investment Financing Strategy.

Prime Minister Robinah Nabbanja who officiated at the opening the National Budget Conference for FY 2025/26 on behalf of H.E the President Yoweri Kaguta Museveni said the theme of the budget for FY 2025/26 is consistent with the vision of the NRM Government of increasing household incomes and improving people's standards of living to achieve social-economic transformation of Uganda.

"Starting FY 2025/26 and over the medium term, the NRM government is committed to build and expand the size of our economy from the current GDP of USD 50bn to USD 500bn by 2040," said the Premier.
She reassured all stakeholders that Uganda's economy has fully recovered from both domestic and external shocks that previously hampered growth over the past three financial years and is now on the right growth trajectory.

"FY 2025/26 comes at the time when government is committed to lift and grow the economy in a low middle income status guided by the tenfold growth strategy, the fourth national development plan and the NRM Manifesto," said the PM. 

Earlier in his welcome remarks at the national budget conference FY 2025/26, the Permanent Secretary and Secretary to the Treasury (PSST) Ramathan Ggoobi said the government is on truck to change the structure of the economy from a subsistence economy to modern industrialized society.

"We want to facilitate: Technology-led productivity growth; Rapid capital accumulation (physical, financial and human capital);
Linkages between agriculture and non-agriculture sectors as well as Markets and competitiveness," said Ggoobi.

 He also said government is ready to facilitate a job-rich growth profile; one that ensures enhanced household incomes and productivity growth within sectors as well as between sectors, leading to structural change.

"Therefore, we want to see a reduction in the rural population; a reduction in informality; sustained demographic transition with continued reduction in both the death rate and birth rates and increased access to electricity," said the PSST. 

The Local Development Partners Group in a statement delivered by Joost Van Ettro, Netherlands Head of Cooperation affirmed their partnership in sustaining and accelerating the development outcomes for Uganda and also commended Gov't for its fiscal consolidation efforts.

‘’We call for continued commitment of government on tax administration reforms, rationalization of VAT and income tax exemptions, and several additional tax policy measures and a better management of current spending to ensure effective budget management at both central and local government level,” said the Development Partners.

“We commit to supporting the government of Uganda in its endeavors to use resources effectively and efficiently,” said the Partners. 

The priorities that Partners want government to focus on in the budget for FY 2025/26 are: Domestic Revenue Mobilization, Human Capital Development, Agricultural Productivity, Green Growth and Climate Change Adaptation and Mitigation, Public Investment Management and Local Government.

The Civil Society Organizations in their position paper recommended borrowing for projects with high returns, more funding for education and health, more wage bill for local governments to recruit staff and transparency and accountability.

The President of the Uganda Local Government Association and Chairman Kabarole District Local Government, Richard Rwabuhinga also reiterated the issue of inadequate staffing at local government which he requested government to consider, in addition to increasing the budget for medicines and supplies.