Uganda to Curb Debt and Deficit in Next Five Years

Uganda is setting its sights on a more fiscally responsible path over the next five years, with plans to significantly lower its fiscal deficit and reduce reliance on commercial borrowing. This strategy is detailed in the new Charter for Fiscal Responsibility for Financial Year 2026/27 to 2030/31, recently presented to Parliament by Finance Minister Henry Musasizi.

The Charter serves as the government’s roadmap for maintaining economic stability, controlling debt levels, and creating room for essential public investments and private sector-driven growth. A key target is to manage public debt, projecting it to peak at 55.1 percent of non-oil Gross Domestic Product (GDP) in the 2027/28 financial year, before a planned reduction to 50 percent by 2030/31.

“The debt rule will remain the key fiscal anchor guiding budget decisions and supporting long-term debt sustainability,” Minister Musasizi stated.

Further demonstrating this commitment, the government aims to decrease commercial borrowing relative to domestic non-oil revenue. This is expected to fall from 33.7 percent in FY2026/27 to 19.3 percent by FY2030/31. Consequently, interest payments on debt are also projected to decrease from 32.5 percent to 20 percent of domestic non-oil revenue during the same period.

The fiscal deficit, excluding oil revenue, is targeted for a substantial reduction, from 6.6 percent of non-oil GDP in FY2026/27 down to 1.5 percent by FY2030/31. This comprehensive fiscal framework was developed in consultation with various key institutions, including the Bank of Uganda and the Uganda Revenue Authority, and aligns with national development plans and manifesto commitments.

Source: https://nilepost.co.ug/news/370010/uganda-targets-lower-debt-fiscal-deficit-over-next-five-years