Summary:

• Uganda’s government plans a 10% spending increase to Shs 58.3 trillion for FY 2024/25, focusing on economic monetization through agriculture, industry, and digitalization. Proposed tax changes aim to boost revenue, but concerns persist about their impact. Experts stress the need for careful budget management to align with national priorities and avoid disruptions.

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In the forthcoming fiscal year of 2024/25, the Ugandan government is considering a substantial increase in spending by 10%, totaling Shs 58.3 trillion. This proposal, amid concerns of potential budget cuts including those affecting parliament, aims to prioritize various sectors for economic advancement.

Presenting the budget to parliament, the government outlined its intentions to drive full monetization of the economy through agricultural enhancement, industrial growth, service expansion, digital innovation, and improved market accessibility. Henry Musasizi, the state minister for finance (General Duties), emphasized investments in wealth creation, social sectors such as education and health, as well as manufacturing, among other priority areas.

Key areas of focus also include peace and security, infrastructure development including strategic roads and the standard gauge railway, as well as energy transmission and utilization.

The adjustment in the budget proposal necessitates a reassessment of budget priorities to accommodate the increased figures, ensuring vital development areas receive adequate funding.

Initially proposed at Shs 52.7 trillion, the national budget for FY 2024/25 had projected a slight increase from the current fiscal year’s budget. Notably, the stock of public debt has risen, albeit with a decrease in its share of Gross Domestic Product (GDP) over the same period.

Allocations in the proposed budget span various sectors, with significant investments earmarked for Development Plans Implementation, Human Capital Development, Integrated Transport Infrastructure, Governance and Security, among others.

To boost tax revenues, the government has introduced several strategies, including amendments to key tax legislation bills. These proposals, currently under review by the House Committee on Finance, aim to adjust excise duties on certain products, impose taxes on mineral water and fuel products, and introduce withholding taxes on specific gains.

While these proposals aim to enhance revenue streams, concerns have been raised about their potential impact on certain segments of the population.

Experts emphasize the importance of ensuring that the increased budget aligns with national priorities and is effectively managed to avoid mid-year supplementary requests that may disrupt financial planning.

The budget for FY 2024/25 aligns with the overarching goal of full monetization of Uganda’s economy, as outlined in the Third National Development Plan. It seeks to drive economic growth, transition towards a manufacturing-centered economy, and achieve long-term sustainable development goals.