Uganda to Slash Public Spending and Borrowing to Strengthen Fiscal Health in 2026/27

What’s happening Uganda plans to reduce overall public spending by 4.1%, from 72.4 trillion shillings to 69.4 trillion in the 2026/27 financial year. Domestic borrowing (via Treasury bills and bonds) will be cut by around 21.1%, down to ~ 9 trillion shillings.
Why The cutbacks are aimed at ensuring debt sustainability, reducing interest payments relative to government revenue, and ensuring borrowing does not crowd out other priorities.
What will be prioritized Key infrastructure projects (e.g. East African Crude Oil Pipeline (EACOP)), completing mineral quantification (copper, gold, iron ore), building/refining operations (refinery), advancing standard gauge railway work.
Challenges / Risks. • Cutting spending and borrowing could reduce funds for some public services or delay non-essential development. • Domestic borrowing cuts might limit opportunities for government to engage local investors or fund urgent projects. • If revenue projections don’t hold up, the government may have to borrow externally or run deficits, which can bring currency risk, inflation.
Implications. • Possible tighter cashflows for government departments and contractors. • Potential for private sector “crowding-in”: less competition with government for credit. • Debt service burden may moderate. • Could affect public expectations: fewer freebies, possibly deferred or scaled down services. • Could impact Uganda’s credit rating positively if seen as prudent.

How these cuts will impact ordinary Ugandans (health, education, infrastructure).

The trade-off between infrastructure investment and service delivery.

Perspectives from economists / civil society: are the cuts deep enough? Too much?

What this means for Uganda’s debt to GDP ratio, credit ratings.

“Every shilling spent must yield tangible results for the Ugandan people.” (or similar)

“We must ensure debt sustainability so future generations are not burdened.”