
Andrew Rugasira. PHOTO/COURTESY
Uganda’s FY2025/26 budget is a document of ambition—Shs72.1 trillion in planned expenditure, 7 per cent projected GDP growth, and robust macroeconomic fundamentals. Coffee exports have surpassed the billion-dollar threshold, reaching $1.83 billion—a historic milestone for a commodity that underpins millions of livelihoods.
Foreign direct investment rose to $3.48 billion, while total exports hit $11.8 billion, reflecting renewed investor confidence. At a glance, it promises stability, predictability and progress.
Yet beneath this optimism lies a recurring structural paradox: strong macroeconomic indicators masking fragile sectoral underpinnings. The country’s development model remains top-heavy, concentrating spending in infrastructure and capital-intensive projects while bypassing the sectors most vital to inclusive, broad-based transformation: commercial agriculture, industrialisation, and youth employment.
Take agriculture, for example. Despite Shs1.86 trillion allocated and tangible gains in irrigation and agro-processing, the sector remains splintered across politicised schemes (PDM, ACF, Emyooga) that lack coordination and fail to catalyse commercial farming. Structural issues—land tenure insecurity, low mechanisation, and poor logistics—persist. Without consolidating financing into a unified Agricultural Transformation Fund and digitising extension services, this vital sector will remain underperforming.
The same contradiction haunts our healthcare and education systems. Budgets have risen—Shs5.87 trillion for health, Shs5.04 trillion for education—yet the outcomes remain brittle. Rural clinics echo with the absence of drugs, no power, no doctors. Uganda’s doctor-to-patient ratio stands at a staggering 1 to 25,000, far below the WHO recommendation of 1 to 1,000.
Lives are lost not from disease, but from delay, distance, and dysfunction. Vocational training remains underfunded. The digital divide widens, locking millions out of future opportunity. These are not gaps in funding—they are fractures in a poor service delivery system.
Perhaps the most urgent gap is youth unemployment, estimated at over 17 per cent. Government schemes have largely offered capital without incubation, skilling, or market access. There is still no national strategy to systematically absorb youth into growth sectors like ICT, tourism, and manufacturing. A coordinated National Youth Employment Accelerator is overdue—linking skilling, start-up funding, public procurement incentives, and private sector internships to real jobs.
Meanwhile, Uganda’s debt situation is tightening. At 48.2 per cent of GDP, with Shs8.1 trillion in interest payments and a 7.6 per cent deficit, debt is increasingly crowding out productive and social spending. At just 14.3 per cent of GDP, Uganda’s domestic revenue effort lags significantly behind comparable economies, limiting fiscal flexibility. The country urgently needs binding fiscal rules to anchor spending within sustainable limits and protect future generations from mounting debt. Growth without fiscal integrity is short-lived; fiscal discipline is not austerity—it is sovereignty.
Crucially, government arrears to private contractors and suppliers—now running into trillions of shillings—continue to choke liquidity and erode trust. Clearing these arrears would itself provide a powerful fiscal stimulus, injecting much-needed cash into businesses, preserving jobs, and reviving demand.
If Uganda is serious about inclusive growth, it must embed the private sector not on the margins of planning, but at the heart of execution—as Mauritius, Ethiopia, and Rwanda have done. In each case, aligning national strategy with private sector delivery has unlocked jobs, exports, and productivity. Uganda must now make the same pivot: from consultation to co-creation; from policy to practice.
Uganda stands at a crossroads—not of ambition, but execution. The budget signals intent, but intent alone does not transform lives. What is needed now is clarity in priorities, discipline in spending, and partnership in delivery. What is missing is not potential, but political will and executional clarity. The future is still within reach. But only if we build it—together!
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Andrew Rugasira is a Ugandan social entrepreneur, writer, and author.