KAMPALA (Reuters) - Uganda's government plans to cut spending by just over a fifth and domestic borrowing by just over a half in the 2025/26 (July-June) fiscal year, the finance ministry said on Friday.
Uganda's rising public debt load has been fuelling concerns among oppositions politicians and also triggered ratings agencies Fitch and Moody's (NYSE:MCO) to cut the country's credit rating.
The government says borrowing has been used to drive economic growth, which has been faster than many of its African peers since the COVID-19 pandemic.
Overall government spending for 2025/26 is projected at 57.4 trillion Ugandan shillings ($15.56 billion), compared with 72.1 trillion shillings planned for the present financial year, a draft budget paper from the ministry showed.
The government plans to borrow about 4.01 trillion shillings ($1.09 billion) from the domestic market via Treasury bonds in the same period, 53.9% lower than in 2024/25, it said.
The ministry gave no reason for the drop in spending or borrowing figures.
Ramathan Ggoobi, the Finance Ministry's permanent secretary, said the government's funding priorities would be in agro-industrialisation, tourism, and minerals including petroleum.
Ggoobi said external debt repayments are expected to rise to 4.03 trillion shillings in 2025/26 from 3.1 trillion shillings in the present fiscal year, adding to the squeeze in domestic spending.
($1 = 3,689.0000 Ugandan shillings)