Uganda says it plans to cut external budget support by 84 per cent

The Ministry of Finance of Uganda has announced a significant reduction in external budget support, planning to decrease it by 84% year-on-year starting from the next financial year in July. The anticipated external assistance, typically in the form of loans and grants, is expected to drop from over $586 million to $92.72 million.

While no specific reason for the reduction was provided, the government has indicated a focus on implementing strategies aimed at enhancing domestic revenue mobilization.

Uganda's economy is showing signs of recovery, with revenue projections indicating a 9% increase in the financial year 2026 to 2027. The country is aiming to begin crude oil production this year, with the International Monetary Fund previously suggesting that revenues from oil sales could potentially boost economic growth rates to double digits.

In addition to reducing external budget support, the Ugandan government plans to decrease domestic debt issuance by 21.1% in the upcoming financial year compared to the previous period. This measure is intended to help manage and reduce the country's increasing public debt.

Based on reporting by Africanews.