Government has released Shs21.82 trillion to finance public services, infrastructure development, wealth creation programmes and strategic investments during the second quarter of the 2026/2027 financial year.
The funds, equivalent to about 26 per cent of the approved annual budget, will support key sectors, including health, education, agriculture, tourism, transport infrastructure and science and technology, as government seeks to sustain economic growth and improve service delivery.
According to the Treasury, Shs457.4 billion has been allocated to local governments to support service delivery and capital development projects, while the Ministry of Health will receive Shs416.5 billion to finance operations, procure vaccines and purchase ambulances for constituencies that have not received them.
The National Medical Stores (NMS) has been allocated Shs284.7 billion for the procurement of essential drugs and medicines, while national and regional referral hospitals will receive Shs94.5 billion to support their operations.
The Uganda Cancer Institute and Uganda Heart Institute will share Shs165.5 billion to finance operations, provide specialised cancer and cardiovascular health services, and develop the nuclear medicine and positron emission tomography (PET) centre.
In education, the Ministry of Education and Sports will receive Shs154.6 billion, while public universities have been allocated Shs209.1 billion to support their operations.
The government has also allocated Shs260.5 billion to the National Council of Sports to accelerate preparations for the 2027 Africa Cup of Nations (AFCON), which Uganda will co-host with Kenya and Tanzania.
In a statement issued on October 15, Patrick Ocailap, representative to the Secretary to the Treasury, said the releases were designed to sustain economic activity, protect essential public services and finance strategic investments despite emerging global economic pressures.
He said the expenditure priorities would focus on agro-industrialisation, tourism, mineral-based development, and science, technology and innovation, including information and communication technology and the creative industry.
“The Q2 expenditure releases therefore seek to sustain economic activity, protect essential public services and finance strategic investments in the ATMS and their enablers, while safeguarding fiscal and debt sustainability,” the statement reads.
Under agro-industrialisation, government has allocated Shs224.5 billion for agricultural research, innovation and critical programme interventions.
Tourism development and promotion initiatives, including the Explore Uganda campaign, will receive Shs48.2 billion, while Shs46.7 billion has been allocated to the Uganda National Oil Company and the Petroleum Authority of Uganda to accelerate preparations for the start of commercial oil production.
Science, technology and innovation initiatives, including internet connectivity and digitisation of the economy, will receive Shs372.9 billion.
The Ministry of Works and Transport has been allocated Shs1.48 trillion to support ongoing transport infrastructure development and maintenance projects, Uganda Airlines, Uganda Railways, Kalangala Infrastructure Services and the Standard Gauge Railway.
The Ministry of Energy and Mineral Development will receive Shs337.1 billion for rural electrification, transmission lines and power-generation projects, while Kampala Capital City Authority has been allocated Shs223.8 billion for social services and urban development, including roads and drainage.
The Ministry of Kampala Capital City and Metropolitan Affairs will receive Shs67.9 billion to support the Greater Kampala Metropolitan Area Urban Development Project, which includes road, drainage and sanitation improvements.
The releases also include Shs2.42 trillion for government wages and salaries, Shs376.6 billion for pensions and gratuity, Shs242.5 billion for Parliament, Shs79.5 billion for the Judiciary and Shs21.2 billion for the Office of the Auditor General.
Government has further provided Shs130 billion to clear verified salary, pension, gratuity and utility arrears.
Ocailap said accounting officers had been directed to ensure that public funds are spent within approved limits, procurement processes are completed on time and resources deliver measurable results.
He said government was strengthening budget execution through tighter expenditure controls, improved accountability, timely implementation of projects and measures to prevent the accumulation of arrears.
The reforms include enforcing the Budget Discipline and Accountability Charter, centralising counterpart funding for externally financed projects, operationalising a contributory public service pension fund and expanding electronic government procurement systems.
Government has also eliminated state-funded celebrations on public holidays, with religious holidays remaining an exception in accordance with presidential guidance.
The Treasury said the measures were intended to protect priority programmes, improve value for money and maintain fiscal discipline amid rising global oil prices, inflationary pressures and exchange-rate fluctuations.
Uganda’s economy grew by 6.4 per cent in the 2025/2026 financial year, up from 6.3 per cent in the preceding financial year, while its nominal size increased to Shs250.45 trillion from Shs227.87 trillion.
The government projects economic growth of 7.6 per cent in the 2026/2027 financial year and 9.1 per cent in 2027/2028, supported by planned commercial oil production, continued investment in strategic sectors and export growth.
However, annual headline inflation increased from four per cent in July to 4.6 per cent in September 2026, largely due to rising transport and energy costs.
The Treasury also reported that the shilling had depreciated by six per cent against the US dollar since the beginning of August, amid increased demand for foreign exchange and rising global oil prices.
Despite the pressures, foreign exchange reserves increased to $6.7 billion as of October 6, 2026, equivalent to 3.74 months of import cover, excluding oil project-related imports.
Total export earnings rose by 23.9 per cent during July and August 2026 compared with the corresponding period in the previous financial year. However, the import bill increased by 44.8 per cent, widening the merchandise trade deficit.
Ocailap said government would continue implementing measures to promote exports, support value addition, attract investment and strengthen economic and commercial diplomacy.
He urged accounting officers to ensure that every shilling released translates into improved public services, job creation and higher household incomes, while maintaining accountability and prudent management of public resources.
