economy 26 June 2026 Daily Monitor (Uganda)
Uganda's Ambitious Budget: Will the Informal Sector Benefit?
As Uganda launches its largest-ever budget aimed at tenfold economic growth, questions arise about the inclusion of the informal sector, which employs the vast majority of the workforce. The true success of the strategy hinges on improving the livelihoods of ordinary citizens, not just large-scale projects. Source: https://www.monitor.co.ug/uganda/oped/commentary/will-the-informal-sector-share-in-the-tenfold-growth-dream--5509880
Uganda has rolled out its most substantial budget to date, standing at Shs84.39 trillion for the 2026/27 financial year. This ambitious budget is designed to propel the nation towards a $500 billion economy, with key investments slated for oil production, industrialization, commercial agriculture, infrastructure, and technological advancements. The government’s commitment to economic transformation is evident.
However, a crucial aspect needing careful consideration is the role and benefit of the informal sector within this grand strategy. This sector is the bedrock of Uganda’s employment, absorbing over 80 percent of the workforce and serving as a critical engine for poverty reduction. While it may not contribute significantly to formal tax revenues, its contribution to livelihoods is undeniable.
Despite government initiatives like Emyooga and the Parish Development Model (PDM) aimed at improving access to finance, many informal businesses still struggle. Limited access to affordable credit, coupled with insufficient business skills, market access challenges, and implementation hurdles, hampers their growth. The rising costs of transport, fuel, rent, and electricity further squeeze their already thin profit margins.
While infrastructure projects like the Standard Gauge Railway and the operationalization of Kabalega International Airport are expected to boost economic activity, their benefits must be made accessible to small enterprises. Similarly, the agricultural sector, despite receiving Shs2.26 trillion, requires enhanced support through irrigation, research, extension services, and market access to translate allocations into improved farmer incomes.
Investments in science and technology could offer efficiency gains through digital platforms, but this requires parallel investment in digital literacy and affordable technology. The significant portion of the budget, nearly 40 percent or Shs33.4 trillion, dedicated to debt servicing also raises concerns about sustainable growth and future fiscal flexibility.
The ultimate success of Uganda’s tenfold growth dream will be measured by its inclusivity. Attention must now shift from budget presentation to effective implementation, prioritizing interventions that empower small and medium enterprises through accessible credit, skills development, and easier formalization processes.
Official sources indicate this article is based on reporting from the Daily Monitor (Uganda).