Uganda to cut domestic spending and borrowing in 2025/26, says Finance Ministry By Reuters

KAMPALA (Reuters) – Uganda’s government plans to cut spending by just over a fifth and domestic borrowing by just over half in the 2025/26 fiscal year (July-June), the finance ministry said on Friday.

Uganda’s rising public debt has fueled concerns among opposition politicians and also prompted ratings agencies Fitch and Moody’s (NYSE: ) to downgrade the country’s credit rating.

The government says the loans have been used to boost economic growth, which has been faster than many of its African peers since the COVID-19 pandemic.

Total government spending for 2025/2026 is estimated at 57.4 trillion Ugandan shillings ($15.56 billion), compared to 72.1 trillion shillings planned for the current financial year, a draft ministry budget showed.

The government plans to borrow about 4.01 trillion shillings ($1.09 billion) from the domestic market through treasury bonds in the same period, 53.9 percent less than in 2024/2025, the statement said .

The ministry gave no reason for the drop in spending or borrowing figures.

Ramathan Ggoobi, the permanent secretary of the Ministry of Finance, said the government’s funding priorities will be in agro-industrialisation, tourism and minerals, including oil.

Ggoobi said external debt repayments are expected to rise to 4.03 trillion shillings in 2025/26 from 3.1 trillion shillings in the current fiscal year, adding to tightening domestic spending.

($1 = 3,689.0000 Ugandan Shillings)