Finance Ministry Announces Reduced Budget Envelope for FY2027/28

The Ministry of Finance, Planning, and Economic Development has issued a preliminary resource envelope of Shs79.22 trillion for the upcoming Financial Year 2027/28. This figure represents a reduction from the Shs84.39 trillion allocated for FY2026/27.

The Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, released the First Budget Call Circular to guide government entities in preparing their budget framework papers. This tighter spending baseline is a deliberate move towards greater fiscal sustainability and self-reliance.

According to Ggoobi, the reduced envelope underscores the government’s commitment to enhancing domestic revenue collection and decreasing reliance on external borrowing and financing. All accounting officers are mandated to align their budget proposals with the approved Budget Strategy and the established calendar for the FY2027/28 budget process.

The government’s planning for the next financial year will be guided by seven strategic shifts. These include a focus on revenue-led fiscal consolidation, careful management of oil revenues, attracting private capital, and accelerating the implementation of the national Tenfold Growth Strategy. This strategy emphasizes investment in Agro-Industrialisation, Tourism Development, Mineral-Based Industrial Development (including oil and gas), and Science, Technology, ICT, and Creative Arts.

Despite the reduction in the overall resource envelope, the economic outlook for FY2027/28 remains optimistic. The economy is projected to grow by 9.1%, an increase from the 7.6% growth forecast for FY2026/27. This accelerated growth is largely anticipated due to the expected commencement of commercial oil and gas production.

Source: Nile Post