From Recovery To Transformation: How Uganda plans to monetise its economy through the Shs84.4 trillion budget

When Finance Minister Henry Musasizi rose to present Uganda’s Shs84.4 trillion budget for the 2026/27 financial year at Kololo Independence Grounds on Thursday, his message was clear: Uganda is shifting from economic recovery to economic transformation.

Under the theme, “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access,” the budget seeks to convert economic potential into wealth, jobs and higher household incomes.

For government, the objective is not merely economic growth, but ensuring that millions of Ugandans participate in and benefit from that growth.

“Our strategy is to fully monetise Uganda’s economy by ensuring that every household participates in the money economy through commercial agriculture, industrialisation, services, innovation and market access,” Musasizi said.

The budget comes at a time when Uganda’s economy is showing remarkable resilience amid global economic uncertainty.

Economy Defies Global Headwinds

Uganda enters the new financial year with one of the strongest economic outlooks in the region.

According to Musasizi, the economy grew by 6.3 percent during the first three quarters of FY2025/26, compared to 5.3 percent during the same period the previous year.

Government expects overall economic growth to reach 7 percent by the end of the financial year and accelerate further to 7.7 percent in FY2026/27.

The anticipated commencement of commercial oil production is expected to push growth into double digits in subsequent years.

The minister attributed the strong performance to sustained public investment, growing private sector activity and strategic government programmes such as the Parish Development Model (PDM), Emyooga and infrastructure expansion.

Equally significant is Uganda’s success in controlling inflation.

Annual headline inflation averaged just 3.6 percent during the first ten months of the financial year, remaining within government’s target range and among the lowest rates in Africa.

“Inflation remains low and stable, preserving purchasing power and supporting business confidence,” Musasizi said.

The country’s external position has also strengthened considerably.

Exports increased from USD 39.1 billion in 2023/24 to USD 41.6 billion in the year ending March 2025, driven largely by coffee, gold, manufactured products and services exports.

Foreign direct investment continues to rise, while remittances from Ugandans abroad surpassed USD 1.5 billion.

Agriculture Remains The Foundation

At the heart of government’s economic strategy is commercial agriculture.

The agro-industrialisation programme received Shs 2.26 trillion, reflecting government’s belief that agriculture remains the quickest pathway to household wealth creation.

Investments will focus on irrigation, agricultural research, extension services, mechanisation, disease control and value addition.

Major achievements during the year included operationalisation of the anti-tick vaccine facility, expansion of coffee production into Northern Uganda, progress on irrigation schemes and strengthening agricultural research.

Government sees agriculture not simply as a subsistence activity but as a business capable of generating incomes, exports and industrial raw materials.

Industrialisation Takes Centre Stage

Uganda’s industrialisation drive is also gathering momentum.

The number of formal factories has now surpassed 10,400, while industrial parks continue attracting investment across the country.

Government allocated over Shs 1 trillion directly to industrial development, while additional investments through the Uganda Development Corporation are expected to support agro-processing, pharmaceuticals, textiles, mineral value addition and manufacturing.

Musasizi argued that Uganda’s prosperity will depend on exporting finished products rather than raw materials.

“Nations become prosperous by adding value to their natural resources,” he said.

This philosophy is particularly evident in the mining and petroleum sectors.

First Oil In Sight

Perhaps the most anticipated development highlighted in the budget is Uganda’s approach to first oil production.

The Tilenga and Kingfisher oil projects, together with the East African Crude Oil Pipeline, are nearing completion.

Government expects commercial oil production to commence later this year, a milestone expected to transform Uganda’s fiscal position and foreign exchange earnings.

At the same time, authorities are pursuing mineral beneficiation policies aimed at ensuring that Uganda exports processed minerals rather than raw ores.

The completion of a major clinker plant in Moroto and ongoing exploration for iron ore, copper, rare earth minerals and uranium reflects this strategy.

Infrastructure Remains The Biggest Investment

Infrastructure continues to absorb the largest share of public investment.

The transport sector received Shs 8.79 trillion, with funding directed towards roads, railways, airports and water transport.

Among the flagship projects is the Standard Gauge Railway, whose construction has commenced between Malaba and Kampala.

Government believes the railway will significantly reduce transport costs and improve competitiveness.

Road construction and maintenance continue nationwide, while major airport investments include operationalisation of Kabalega International Airport and expansion of Entebbe International Airport.

The energy sector received Shs 2.07 trillion.

Government plans to expand electricity generation, transmission and distribution infrastructure while advancing preparations for nuclear power development in Buyende District.

Digital Transformation And Innovation

Another pillar of the budget is technology-driven growth.

Government allocated Shs 1.14 trillion to science, technology and innovation.

Achievements highlighted by Musasizi include the commissioning of the Kiira Motors vehicle manufacturing plant, expansion of electric mobility, growth in pharmaceutical manufacturing and advances in Uganda’s space programme.

Digital infrastructure also continues to expand, with thousands of kilometres of fibre optic cable laid across the country.

Government sees innovation as essential to creating high-value jobs and positioning Uganda competitively in the global economy.

Social Services Receive Major Boost

Education remains one of the largest spending areas, receiving Shs 6.66 trillion.

Funding will support Universal Primary Education, Universal Secondary Education, seed secondary schools, STEM education and teacher salary enhancements.

The health sector was allocated Shs 5.23 trillion.

Government plans to strengthen specialised healthcare services, expand access to medicines and complete major health infrastructure projects including the Lubowa International Specialised Hospital and the Naguru Cardiac Hospital.

The successful completion of Uganda’s first bone marrow transplant was highlighted as evidence of growing local medical capacity.

Environment, Water And Climate Resilience

Recognising increasing climate risks, government has significantly increased investment in environmental protection and water infrastructure.

The water and sanitation sector received Shs 1.013 trillion, while environmental protection and climate change interventions received Shs 494 billion.

Funding will support wetland restoration, forest conservation, disaster preparedness, climate adaptation and expansion of safe water access.

Government also allocated Shs 361.88 billion to the Contingency Fund to strengthen national disaster response capacity.

Market Access And Trade

Government is increasingly focusing on market access as a driver of growth.

Musasizi noted that producing goods alone is insufficient if farmers and manufacturers cannot access profitable markets.

Investments are therefore being directed towards standards, certification, quality assurance and export promotion.

The Uganda National Bureau of Standards has significantly reduced certification timelines, while regional laboratories are being established in Mbale, Gulu and Mbarara.

Government hopes these interventions will improve competitiveness under regional and international trade agreements.

The Road To A Tenfold Economy

At the centre of the budget is Uganda’s ambition to grow the economy tenfold over the coming decades.

Government believes this can be achieved through commercial agriculture, industrialisation, oil and gas development, innovation, infrastructure expansion and stronger market integration.

The strategy seeks to ensure that economic growth translates into jobs, household incomes and improved living standards.

For ordinary Ugandans, the success of the budget will ultimately be measured not by expenditure figures or growth statistics, but by whether more citizens are able to earn sustainable incomes, build businesses and improve their quality of life.

As Uganda prepares for first oil, deeper industrialisation and greater regional integration, the 2026/27 budget represents one of the most ambitious attempts yet to transform economic growth into broad-based prosperity.

Whether that ambition becomes reality will depend on implementation, accountability and the ability of both government and the private sector to turn policy promises into tangible results.