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2025-09-17 17:37:24
[Fiscal Belt Tightening: East Africa's Lion Cuts Spending and Borrowing] ⑴ Uganda's Ministry of Finance documents indicate plans for significant public spending cuts in the 2026/27 fiscal year, with an overall reduction projected at 4.1%. This means public spending over the next 12 months will fall from 72.4 trillion Ugandan shillings (approximately US$20.7 billion) in the previous period to 69.4 trillion Ugandan shillings (approximately US$19.9 billion). ⑵ One of the main objectives of this fiscal tightening is to reduce domestic borrowing to lower the burden of interest payments. Planned domestic borrowing through treasury bills and bonds is projected to fall 21.1% from the previous period to 9 trillion Ugandan shillings. ⑶ The document emphasizes that spending in the new fiscal year will prioritize completing the planned East African Crude Oil Pipeline (EACOP) project, aiming for early crude oil production. Funds will also be invested in the quantitative assessment of iron ore, gold, and copper resources, as well as in the construction of refineries and the ongoing standard-gauge railway project. ⑷ The Ministry of Finance stated that the reduction in borrowing is to maintain debt sustainability and keep the ratio of interest expenditure to revenue within a controllable range.
