Finance minister Matia Kasaija presents the 2025/2026 Budget statement at Kololo Ceremonial Grounds in Kampala yesterday. PHOTO/PPU
Finance Minister Matia Kasaija yesterday painted a rosy picture of how the economy has grown and is doing well, as the government embarks on the implementation of the FY2025/2026 budget. The budget is expected to kick-start the operationalisation of the fourth National Development Plan.
Presenting a 13,050-page budget speech on behalf of his superior-President Museveni, the witty Kasaija chest-thumped how the government has grown the economy not only in national figures, but development can also be seen among the masses.
The Finance minister premised his arguments on the available peace, security, political stability, increased pocket cash among the masses, good health care, improved education, transport, life expectancy rate, and poverty reduction, compared to 15 years ago.
To further maintain and consolidate the gains achieved, Mr Kasaija said he broke down the allocations he gave to different key sectors, a development he said will enable Uganda to move towards its goal of achieving a $500b economy by 2040. The size of the economy, he said is projected to expand to Shs254.2 trillion ($66.1b) in the Financial Year (FY) 2025/2026, which will translate into a higher GDP per capita of $1,324 (Shs4.7m) next financial year compared to $1,263 (Shs4.5m) estimated in the current financial year.
“To the women and mothers of this nation, the budget has provided funds to improve your health, to ensure that your children are born in safe hands, are immunised, sleep under a mosquito net, drink clean, safe water, and are educated in a nearby school for free. The budget has also allocated billions to support your businesses, however small, to graduate into sustainable businesses,” he said. Some analysts, however, said the situation is not as rosy as portrayed by Mr Kasaija because what is in numbers does not reflect what is on the ground.
Mr Aloysious Kittengo, the programme coordinator financing for development at SEATINI Uganda, said that more investments have to be made. “The government should make deliberate efforts and invest in its people to generate more income so that the purchasing power among the masses increases, and this is how we shall be able to raise our Value Added Taxes and contribute to the economy’s growth, which is realistic,” he said. With the rising public debt, Mr Pascal Muhangi, an economist at Civil Society Budget Advocacy Group (CSBAG), said increased production among the masses will increase the country’s Gross Domestic Product (GDP) and, in turn, make our swelling public debt sustainable. “If we have our public debt increasing, it should be accompanied by an increasing GDP because if the debt increases than GDP it means it will become unsustainable...what has driven our GDP growth is the exports in gold and coffee, and we also have a new sector of oil and gas,” Mr Muhangi said.
Kasaija chest-thumps over achievements
In the space of 15 years, the economy, Mr Kasaija said, grew from Shs64.8 trillion ($27.9b) in the FY2010/2022 to the current Shs226.3 trillion ($61.1b). The country he added in March this year graduated from the category of Low-Developed Countries, after meeting all criteria. He also said the life expectancy has improved to 68.2 years in FY2023/2024 from 63.3 years in FY2010/2011 and from 50.4 years in 2002, which he said has been partly driven by improvements in access to health services, massive immunisation campaigns that reduced disease prevalence and child mortality.
“The population living within a five-kilometre radius of a health facility is now 91 percent, from about 80 percent in FY2010/2011; and 81 percent of parishes now have government-aided schools,” Mr Kasaija said. He added:“Poverty has decreased to 16.1 percent in FY2023/24 from 24.5 percent in FY2010/2011. In addition...persons in the subsistence economy reduced to 33 percent in FY2023/2024 from 69 percent in FY 2010/2011.”
The Minister said the reduction of income inequality among Ugandans from 41 percent in 2020 to the current 38 percent calls for celebrations, praising Mr Museveni, whose leadership he said extended funding support to uplift the vulnerable poor. “The government has invested over Shs9 trillion in key wealth creation initiatives over the last 10 years. These include: the Uganda Development Bank-UDB (Shs1.45 trillion), the Parish Development Model-PDM (Shs3.3 trillion by the end of FY2024/2025), Emyooga (Shs553 billion), the Youth Livelihood Programme (Shs207.95 billion), the Small Business Recovery Fund, (Shs100 billion), the Agricultural Credit Facility (Shs495 billion), the Youth Venture Capital Fund (Shs12.5 billion), Uganda Women Entrepreneurship Programme (Shs168 billion), the INVITE Project (Shs800 billion), the GROW Project (Shs824 billion), and Uganda Development Corporation (Shs1.2 trillion), among others,” he said.
Regarding the transport infrastructure, Mr Kasaija said Ugandans can now travel to all borders on tarmac and reach all parts of the country, East, West, South, and North, by tarmac or improved murram roads. “Installed electricity generation capacity increased fourfold to 2,051 megawatts in FY2023/2024, from 595 megawatts in FY2010/2011. Consequently, the proportion of the population with access to electricity increased fivefold to 57 percent in FY2023/2024 from 11 percent in FY2010/2011,” he said. Another rosy area is the internet, where the number of subscribers rose to 53 percent in 2022, compared to 1.8 percent in 2010, with the National ICT Backbone infrastructure extended to 4,300 kilometres in FY2022/2023, from 1,380 kilometres in FY2010/2011.
“The economy has diversified from the traditional 3Cs, which are coffee, cotton, and copper, and 3Ts, which are tobacco, tea, and tourism, to a more sophisticated economy. For example, Uganda has added 31 new products to its export basket in the last 15 years, including light-manufactured products such as steel, processed food, cement, pharmaceuticals, dairy products, ceramics, and cloth,” he said. The inflation, the minister said, has also been reduced to 3.4 percent, which is manageable.
The Ugandan shilling, he also said, has remained stable despite global disruptions. The interest rate on the price of money also reduced to 17.7 percent from 18.1 percent in November last year, which he said has facilitated business growth due to the availability of affordable funds. “Total exports of goods and services for the 12 months to March 2025 are $11.8b from $9.56b for the same period in 2024. Of this, exports of goods were $9.3b for the same period, up from $7.3b in March 2024, representing a growth of 26 percent,” Mr Kasaija said.
Key priorities
The government has allocated Shs11.44 trillion towards investment in health, education, social protection, and water and sanitation sectors. In the outgoing financial year, the government prioritised healthcare supplies, general and essential medicines, improved digitisation of healthcare services, and strengthened the National Ambulance and Emergency Care System in the health sector. Mr Kasaija told Ugandans in a televised address yesterday that the government has provided Shs5.8 trillion for the sector, where major priorities are: having functional health centre IVs, strengthening primary, and community health care, scaling up national e-Health infrastructure, promotion of nutrition education and reproductive health, deployment of community health extension officers and construction of specialised health facilities for cancer and cardiovascular care.
The government provided funds for access to Universal Primary Education (UPE) for 9.52 million learners and 995,116 learners under Universal Secondary Education (USE), and this was in addition to the more than 5,192 students, both on degree and diploma programmes, who benefited from the Higher Education Students’ Loan Financing Scheme. The sector has received Shs5.04 trillion to fund similar priorities in the next financial year. Close to 500,000 older persons benefited from the Shs811b funds for the Social Assistance Grants for Empowerment (SAGE), and this is in addition to other funds that the government provided to other social protection programmes. A total of Shs404b has been allocated for the sector. Other key areas are wealth creation, like the PDM, where Shs1.05 trillion has been allocated in addition to the already spent Shs3.3 trillion. Additionally, Shs50b has also been allocated to the Agriculture Credit Facility, which has received Shs413.4b since 2010.
What Budget means for real estate sector
We need tax refoms, says Judy Rugasira Judy Rugasira, the managing director of Knight Frank, explains the impact of national budget on the rela estate sector. Below is an excerpt of her remarks. Uganda Uganda’s Shs72.4 trillion 2025/26 budget, themed “Full Monetisation of the Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access”, sets a supportive tone for the real estate sector despite not directly naming it as a priority area. With GDP projected to reach USD 66.1 billion and economic growth forecast at 7 percent, the environment is increasingly conducive to property investment. Rising incomes and infrastructure-led development are expected to drive demand for residential, commercial, and industrial property.
The expansion of tarmac roads, electrification, and water access — especially in areas like Hoima, Lira, and Kasese — will unlock land value and make peripheral locations more viable for development. Budget allocations to education (Shs5.04 trillion) and health (Shs5.87 trillion) will fuel demand for schools, hospitals, staff housing, and related amenities. Preparations for CHAN and AFCON27, including stadium construction in Hoima and Lira, will attract new hospitality and retail developments in those corridors. Additionally, Shs430 billion allocated to tourism and Shs2.2 trillion for enabling infrastructure will stimulate investment in eco-lodges, cultural centres, and road-side developments near national parks and airports. Meanwhile, agro-industrial funding (Shs1.86 trillion) will increase demand for logistics hubs, worker housing, and agro-processing zones in rural districts such as Alebtong, Nakaseke, and Ntoroko.
However, the tightening of tax compliance through Uganda Revenue Authority (URA)’s rental tax reforms poses challenges. While promoting formality, the regime allows only a flat 50 percent deduction on gross rental income, regardless of actual costs. For landlords managing high-cost assets like commercial buildings, apartments, or serviced units, where operating expenses can exceed 60–70 percent, this results in tax being levied on unrealised profits, eroding investor returns. Additionally, landlords are taxed on accrued, not collected, income—putting pressure on cash flow where rent defaults are common. The administrative burden has also increased under systems like the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and the rental tax compliance solution, raising costs for landlords, especially smaller or informal ones.
This may lead to underreporting of income or avoiding formal leases, undermining transparency and discouraging institutional capital, whilst increasing undue pressure and scrutiny on already compliant property owners. As a property practitioner, I am calling for reforms—either through actual cost deductions or an increased standard allowance to better reflect operating realities. Despite tax hurdles, the budget’s strong focus on infrastructure, industrialisation, and public services is expected to create new demand corridors. Developers who move early into these emerging nodes are likely to benefit most.
They say...
King James, Isingiro North resident
I think the health sector was given priority because a sick nation or community cannot develop. Health is a critical area that should not be entrusted to donors.
Julius Kayiira, Jinja City businessperson
The government should curb its borrowing habits to avoid drowning in debt. With over Shs50 trillion in debt, the future is fragile, and our budget will be dominated by loan repayments, posing a significant danger to the country’s stability.
Achen Judith Obiya, Gulu City resident
Ugandans are getting poorer at the expense of foreign-owned businesses. But I heard them talk of waiving taxes for new businesses starting up for at least the first 3 years, which is a good thing.
Linus Kayia, Yumbe District leader
Shs27 trillion has been allocated for debt servicing which could be directed to offer services to the people. The local governments have been allocated 11 per cent, which is insufficient for development. It should have been increased to at least 30 per cent.
Swadick Ayisuga, Arts teacher
I’m disappointed. The budget because it doesn’t cater for our welfare as teachers of Arts. Considering that we go to the same market, pay same taxes and send our children to the same schools with Science teachers who are being paid hefty salaries.
