The Ministry of Finance, Planning and Economic Development has outlined an ambitious fiscal policy framework for the Financial Year 2026/27, signalling a sharper focus on revenue expansion, tighter expenditure controls, and debt sustainability as Uganda moves deeper into the implementation phase of its long-term development agenda.
In a policy update shared on its official communication channels, the Ministry said government spending priorities in the medium term will be aligned to growth-enhancing sectors under the Ten-Fold Growth Strategy and the Fourth National Development Plan (NDP IV), with emphasis on accelerating economic transformation while maintaining macroeconomic stability.
Revenue target raised to Shs 45.6 trillion
A central highlight of the FY2026/27 fiscal framework is a significant increase in domestic revenue mobilisation. Government projects domestic revenue to rise to Shs 45.6 trillion, up from Shs 35.7 trillion in FY2025/26, driven by reforms aimed at widening the tax base and strengthening compliance.
The Ministry said this growth will be achieved through enhanced tax administration systems, improved enforcement, and efforts to bring more of the informal sector into the tax net.
Officials argue that boosting domestic revenue remains critical to reducing reliance on borrowing and donor support, particularly as Uganda’s development spending obligations continue to grow.
Oil revenues set to reshape fiscal space
The update also places strong emphasis on the expected commencement of commercial oil production, which government says will become a new and strategic source of public revenue.
According to the Ministry, Uganda will focus on ensuring “efficient and transparent management and collection” of petroleum revenues once production begins, with oil income expected to ease fiscal pressure and support infrastructure and development financing.
However, officials also caution that oil revenues must be managed carefully to avoid misallocation and to ensure long-term economic stability.
Tightening the fiscal deficit and controlling debt
The government says it will continue efforts to reduce the fiscal deficit and maintain it within prudent limits, signalling a continued commitment to debt sustainability amid rising public investment demands.
Key to this strategy will be stricter borrowing discipline, including prioritisation of concessional loans, improved appraisal of financing options, and stronger debt portfolio management.
The Ministry noted that while borrowing will remain necessary for development financing, it will be undertaken under more selective and strategic conditions to avoid worsening debt vulnerabilities.
Tougher controls on public spending
On the expenditure side, government plans to rationalise spending through strengthened controls and tighter enforcement mechanisms across all sectors.
One of the most notable reforms announced is the introduction of enhanced accountability measures for public officials. As part of performance contracting arrangements, all Accounting Officers will be required to sign a budget discipline and accountability charter.
The charter is expected to introduce sanctions for breaches of financial management rules, particularly in relation to planning, budgeting, and execution of public funds.
Officials say the move is intended to curb wasteful expenditure, improve efficiency in public service delivery, and reinforce accountability in government institutions.
Strengthening public financial management systems
The Ministry also pledged continued reforms to public financial management systems, with a focus on improving transparency, accountability, and oversight in the use of public resources.
These reforms are expected to include tighter monitoring mechanisms, improved reporting frameworks, and digital enhancements aimed at reducing leakages and improving efficiency in budget execution.
Policy direction anchored in long-term growth agenda
Overall, the FY2026/27 fiscal framework positions government’s economic policy around accelerating structural transformation while maintaining fiscal discipline.
By aligning expenditure priorities with the Ten-Fold Growth Strategy and National Development Plan IV, the government is seeking to balance ambitious growth targets with macroeconomic stability constraints.
Analysts note that the success of this strategy will depend heavily on government’s ability to effectively mobilise domestic revenue, manage oil expectations, and enforce spending discipline across ministries and agencies.
As Uganda approaches a new fiscal cycle, the policy direction signals both opportunity and pressure: higher revenue ambitions, new oil-driven expectations, and intensified scrutiny over how public funds are managed.
