By BM
The Government of Uganda has disbursed Shs 18.43 trillion to fund government operations in the second quarter of the 2025/26 financial year, bringing the total budget releases for the first half of the fiscal year to Shs 38.61 trillion.
This represents 53.4 percent of the approved national budget of Shs 72.38 trillion.
Announcing the release, Patrick Ocailap, representing the Permanent Secretary and Secretary to the Treasury, said the funding aims to sustain critical services and development programs under the government’s Ten-Fold Growth Strategy.
He also used the occasion to provide an update on the state of the economy, which he said remains strong and resilient despite external challenges.
According to final GDP estimates released by the Uganda Bureau of Statistics, the economy grew by 6.3 percent in the financial year 2024/25, up from 6.1 percent the previous year.
The nominal value of the economy increased from Shs 203.71 trillion in 2023/24 to Shs 227.88 trillion.
Ocailap attributed the robust performance to improved aggregate demand, favorable weather conditions, a stable macroeconomic environment, and key government programs such as the Parish Development Model.
Services remained the largest contributor to GDP, accounting for 42.1 percent of output, followed by agriculture at 26.1 percent, and industry at 24.3 percent.
With continued investment in productive sectors, improved regional and global economic conditions, and growing private sector activity, real GDP growth is projected to reach 7 percent in 2025/26 and remain above that in the medium term.
Indicators of economic performance have also remained positive. The Composite Index of Economic Activity stood at 179.4 in August 2025, while the Purchasing Managers Index rose to 54.0 in September, signalling expansion in the private sector.
Business sentiment also improved, with the Business Tendency Index reaching 59.2, reflecting optimism across all sectors.
Inflation remained relatively low, averaging 3.8 percent in the first quarter of the financial year.
However, annual headline inflation ticked up slightly to 4.0 percent in September, mainly due to rising food prices.
The Ugandan Shilling strengthened against the US dollar, appreciating from an average rate of Shs 3,573/USD in August to Shs 3,497/USD in September, driven by increased inflows from remittances, offshore investments, and coffee exports.
Uganda’s external sector also showed significant improvement. Export earnings in the fourth quarter of FY2024/25 rose to USD 3.48 billion, a 55.4 percent increase compared to the same period a year earlier.
Imports grew by 38.5 percent to USD 3.98 billion, largely due to formal non-oil private sector imports.
However, the trade deficit narrowed by over 21 percent as export growth outpaced imports.
Remittances from the Ugandan diaspora reached USD 1.57 billion in the full fiscal year, up nearly 12 percent from the previous year.
On the fiscal side, the government allocated substantial funding to key sectors in the second quarter.
Shs 7.07 trillion was set aside for debt and treasury operations, Shs 2.13 trillion for wages and salaries, and Shs 339 billion for pension and gratuity payments.
Parliament received Shs 223.6 billion, while the Judiciary was allocated Shs 64 billion.
Strategic growth sectors under the government’s ATMS agenda—Agro-industrialisation, Tourism, Minerals and Oil, and Science and Innovation also received targeted funding.
Agro-industrialisation projects received Shs 320 billion, while Shs 53.65 billion went to tourism sector development.
The petroleum sector received Shs 16.64 billion, and Science, Technology, and ICT received a combined Shs 124.25 billion.
Security and governance institutions also featured prominently in the quarter’s allocations.
The Ministry of Defence was allocated Shs 642.8 billion, the Uganda Police Force Shs 161.6 billion, and the Uganda Prisons Service Shs 89.6 billion.
The Electoral Commission received Shs 52.7 billion, bringing the total released for election-related activities to Shs 450 billion.
Infrastructure projects were heavily supported, with Shs 1.7 trillion going to the Ministry of Works and Transport.
This includes funding for road development, maintenance, and completion of major projects such as Entebbe Airport.
The Ministry of Energy received Shs 361.5 billion for rural electrification and power transmission projects, while Kampala Capital City Authority received Shs 145.6 billion for urban development.
In the human capital development sector, the Ministry of Health received Shs 471 billion, and the National Medical Stores was allocated Shs 205.6 billion to ensure availability of essential medicines.
Education and sports institutions, including public universities and the National Council of Sports, also received significant support.
Local governments were allocated Shs 390.7 billion to enable timely implementation of local development projects.
Additionally, Shs 187 billion was released to cover government domestic arrears, including utilities and contributions to international organizations.
Revenue-generating agencies also benefited from the Q2 release, with Uganda Revenue Authority receiving Shs 114.9 billion, the Uganda Registration Services Bureau Shs 8.45 billion, and the Immigration Directorate Shs 61.4 billion.
In his closing remarks, Ocailap emphasized the need for discipline in budget execution.
He instructed all Accounting Officers to ensure that salaries, pensions, and gratuities are paid by the 28th of every month and to avoid committing government funds without adequate budget provision.
Ocailap also warned against unauthorized recruitment and directed that all contracts be executed in Uganda Shillings.
He called on ministries, departments, and local governments to convene Finance Committee meetings to align their priorities with the released funds and the approved budget.
Ocailap concluded by encouraging the media and civil society to continue supporting transparency and public access to budget information, which is available through the Ministry of Finance’s website and call centre. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
