Business 28 March 2026 Daily Monitor (Uganda)
Uganda's Shrinking Fiscal Space Sparks Alarm, Warns CSBAG Leader
Civil Society Budget Advocacy Group Executive Director Julius Mukunda highlights surging public debt, low tax-to-GDP ratios, and fiscal mismanagement in the 2025 Auditor General's report, warning of severe constraints on essential services. He urges reforms to address inefficiencies in revenue collection, arrears, and key sectors like health and education. Source: https://www.monitor.co.ug/uganda/business/finance/our-limited-fiscal-headroom-must-be-a-cause-of-concern-says-mukuda-5406230
Julius Mukunda, Executive Director of the Civil Society Budget Advocacy Group (CSBAG), has raised serious concerns over Uganda’s fiscal health based on the 2025 Auditor General’s report. Public debt has ballooned from Shs70 trillion in FY2020/2021 to over Shs115 trillion in FY2024/2025, pushing the debt-to-GDP ratio near the critical 51% threshold.
Interest payments now consume 23% of domestic revenues, far exceeding the 12.5% benchmark, leaving limited funds for health, education, agriculture, and infrastructure. Domestic debt has also surged to Shs60 trillion, comprising 51% of total debt and potentially squeezing private sector borrowing.
Despite revenue growth from Shs22 trillion to Shs32.3 trillion over four years, Uganda’s tax-to-GDP ratio lags behind regional and global averages. Only 48% of 5.2 million registered taxpayers contribute, with agriculture—26% of GDP—providing just 1.6% of taxes, highlighting an unbalanced system.
Positive notes include a 56% rise in VAT collections post-Efris implementation, boosting compliance. However, domestic arrears remain a drag, climbing to Shs13.8 trillion before partial restructuring, straining suppliers and eroding trust.
Sectoral woes persist: health faces funding shortfalls, with Mulago Hospital receiving only 25% of needed funds and heavy donor reliance set to end. Land management under UgNLIS suffers from delays and fraud risks, while state enterprises like UETCL and UBC post massive losses.
Project delays have incurred Shs63.7 billion in commitment fees, and Universal Secondary Education schools lack basic facilities, from labs to safe classrooms. Mukunda calls for stronger oversight, compliance, and reforms to safeguard fiscal stability.
Source: Daily Monitor (Uganda)