Published on 27/12/2024
On December 19, 2024, the Government unveiled the 2025/26 National Budget Framework Paper, projecting an expenditure of UGX 57.441 trillion. This marks a sharp UGX 14.695 trillion cut from the UGX 72.137 trillion allocated for FY 2024/25. The streamlined budget signals a shift in fiscal priorities, aiming to address pressing economic challenges.
The Minister of State for Finance, Henry Musasizi, presented the resource envelope during the plenary sitting. He stated that the budget would be financed through domestic and external sources and emphasized that no new taxes would be introduced in FY 2025/26, focusing instead on refining existing tax laws.
Musasizi highlighted key priorities in the budget, including peace and security, infrastructure development (roads, railways, and electricity), irrigation, reducing the cost of capital, human capital development (health and education), water resources, international relations, and disaster management. He also reported that Uganda’s economy has fully recovered, with inflation contained at 2.9%, significantly below the policy target of 5%.
However, the timing of the BFP presentation attracted sharp criticism from MPs. Mathias Mpuuga (Nyendo-Mukungwe) questioned how the Government could proceed with the budget when the National Development Plan IV (NDP IV), meant to inform the budgeting process, had not yet been approved by Parliament.
Mpuuga argued that this sequencing issue undermines the planning process, stating: “The Minister has laid the cart before the horse. Without an approved NDP IV, what informs the BFP?”
Amos Lugoloobi, Minister of State for Planning, attempted to defuse the tension by tabling the NDP IV document, explaining that it builds on the achievements and challenges of NDP III. He described the goal of NDP IV as achieving higher household incomes, full monetization of the economy, and employment for socio-economic transformation.
Despite these assurances, MPs like Muwanga Kivumbi (Butambala County) accused the Ministry of Finance of ambushing Parliament with simultaneous submissions of the NDP IV and BFP. He expressed frustration with the Ministry’s perceived disregard for procedural requirements.
Jonathan Odur (Erute South) urged the Deputy Speaker to involve sectoral committees in scrutinizing the NDP IV to ensure inclusivity and thorough review. The Deputy Speaker, Thomas Tayebwa, acknowledged the proposal but noted time constraints, suggesting sectoral committee chairpersons collaborate with the Budget Committee to address members’ concerns.
Criticism of the Ministry of Finance continued with Gorreth Namugga (Mawogola South), who accused the Ministry of reckless planning, citing the low performance of NDP III (19%) compared to the NRM manifesto’s 57% implementation rate.
The Ministry of Finance projected Uganda’s GDP to grow to UGX 250 trillion (USD 66.1 billion) in FY 2025/26, up from UGX 222.7 trillion (USD 59.3 billion) in FY 2024/25, with income per capita expected to rise from USD 1,236.7 to USD 1,338.7.
