The Ugandan government plans to reduce spending by over 20% and cut domestic borrowing by more than half in the 2025/26 fiscal year, according to the Finance Ministry. This move comes amid growing concerns over the country’s rising public debt, which has prompted credit rating downgrades from Fitch and Moody’s.

Projected government spending for 2025/26 is set at 57.4 trillion Ugandan shillings ($15.56 billion), down from 72.1 trillion shillings in the current fiscal year. The government also plans to reduce domestic borrowing to 4.01 trillion shillings ($1.09 billion), marking a 53.9% decrease compared to 2024/25.

While no specific reason was provided for the cuts, Finance Ministry Permanent Secretary Ramathan Ggoobi stated that the government will prioritize funding in agro-industrialization, tourism, and mineral sectors, including petroleum. He also noted that external debt repayments are expected to rise, further constraining domestic spending.

Uganda has defended its borrowing practices, citing them as essential for driving economic growth, which has outpaced many African nations since the COVID-19 pandemic. However, the increasing debt burden continues to be a point of contention among opposition politicians.