Minister of State for General Duties, Henry Musasizi, has informed the Parliamentary Committee on the Budget that the government has allocated Shs18.509 trillion under the development budget for the Financial Year 2025/26.
This funding will support high-impact interventions under the Agro-Industrialization, Tourism, Mineral Development, and Science, Technology and Innovation (ATMS) program and associated enablers, in line with the ten-fold growth strategy.
He noted that the projects earmarked for financing are those that comply with the Public Investment Management System (PIMS) framework.
Additionally, Minister Musasizi announced that the government has allocated Shs1.4 trillion in the FY 2025/26 budget for the settlement of various categories of arrears.
According to the Auditor General, domestic arrears increased from Shs10.5 trillion in FY 2022/23 to Shs13.81 trillion by the end of FY 2023/24.
However, of this amount, Shs8.313 trillion was allocated for Bank of Uganda redemptions in the FY 2024/25 budget, leaving an outstanding arrears stock of Shs3.854 trillion.
“At this rate, we shall be able to clear the remaining stock within three financial years,” Minister Musasizi assured the Committee.
The Minister, accompanied by Permanent Secretary and Secretary to the Treasury (PSST) Ramathan Ggoobi and a technical team also appeared before the Committee to respond to queries regarding the draft revenue and expenditure estimates for FY 2025/26.
Minister Musasizi explained that revenue collection has not grown as projected in the Charter for Fiscal Responsibility (CFR), largely due to the slow recovery of businesses from the effects of the COVID-19 pandemic.
In response, the government has extended tax reliefs to affected entities to support their recovery.
He noted that revenue performance has fluctuated between 13.4% and 14% of GDP from FY 2020/21 to FY 2024/25.
Looking ahead, the Minister emphasized the government’s commitment to fully implementing the Domestic Revenue Mobilization Strategy (DRMS).
He highlighted significant investments in the Uganda Revenue Authority aimed at improving tax administration and enhancing efficiency in tax exemptions.
On public debt, Minister Musasizi reported that Uganda’s nominal debt stood at 46.8% of GDP in FY 2023/24 below the projected 47.9%.
He pointed out that actual debt levels have consistently remained under projections.
“Our debt is expected to remain sustainable in FY 2025/26 and over the medium term,” he concluded.
