Minister of State for General Duties, Hon. Henry Musasizi, has assured Parliament that Uganda’s fiscal position remains sustainable and focused on recovery, despite challenges in revenue performance.
Appearing before the Committee on Budget to discuss the draft estimates of revenue and expenditure for FY 2025/26, Musasizi outlined key priorities including domestic revenue mobilization, development spending, and clearing domestic arrears.
He was accompanied by the Permanent Secretary and Secretary to the Treasury (PSST), Ramathan Ggoobi, and a team of technical officials from the Ministry of Finance, who provided technical support in addressing queries raised by the Committee.
Musasizi admitted that revenue collection has not grown as anticipated under the Charter for Fiscal Responsibility, largely due to the lingering effects of the COVID-19 pandemic on business activity.
“Revenue collection has not increased as projected in the Charter for Fiscal Responsibility due to slow recovery of businesses from effects of Covid-19,” he said.
To support recovery, he added, the government has extended tax relief measures for affected entities. Over the past five years, revenue performance has fluctuated between 13.4% and 14% of GDP.
To improve this outlook, Musasizi said the government is implementing the Domestic Revenue Mobilization Strategy (DRMS) at full scale, with major investments in the Uganda Revenue Authority (URA) to strengthen tax administration and manage exemptions more efficiently.
On public debt, the minister noted that Uganda’s nominal debt stood at 46.80% of GDP in FY 2023/24—below the projected 47.9%.
“Our debt is expected to remain sustainable in FY 2025/26 and over the medium term,” Musasizi told the Committee.
He also revealed that Shs. 18.509 trillion has been allocated under the development budget for projects with high economic return, in line with the Agro-Industrialization, Tourism, Minerals and Oil & Gas Strategy (ATMS) and the government’s ten-fold growth plan.
“The projects to be financed are those that are compliant with the Public Investment Management System (PIMS) framework,” he said.
Turning to domestic arrears, Musasizi disclosed that Shs. 1.4 trillion has been provided in FY 2025/26 as part of a phased plan to clear all categories of arrears.
The Auditor General’s report shows that domestic arrears increased from Shs. 10.5 trillion in FY 2022/23 to Shs. 13.81 trillion in FY 2023/24. However, a significant portion—Shs. 8.313 trillion for Bank of Uganda redemptions—was already catered for in the current FY 2024/25 budget, leaving a remaining stock of Shs. 3.854 trillion.
“At this rate, therefore, we shall be able to clear the remaining stock within three financial years,” Musasizi assured.
