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Budget tells Uganda’s growth story but…
Uganda’s economic story from 1986 to the projected 2026/27 financial year is, therefore, one of recovery, stabilisation, structural transformation and now accelerated growth.
David Mukholi.
By: David Mukholi, Journalist @New Vision
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OPINION
On Thursday (June 11), the Government unveiled a sh84.4 trillion national budget for the Financial Year 2026/27. It is the largest budget in the country’s history and says a lot about Uganda’s growth trajectory. Year after year, the budget has steadily expanded, an indicator of economic growth. In the ending financial year 2025/26, the budget stood at sh72.4 trillion. The previous financial year, 2024/25, it was sh72.1 trillion, and before that, in 2023/2024, it was sh52.7 trillion.
Domestic revenue in 2026/27 is projected at sh44.18 trillion, accounting for 52.8%, slightly more than half of the national budget. This share has been rising over time, reflecting gradual economic expansion and improved revenue mobilisation.
For comparison, there is no better reference point than 1986, when the National Resistance Movement (NRM) took power. The administration’s first budget stood at just sh10b, which today would be equivalent to the turnover of some medium-sized businesses. Of that amount, sh6.8b was allocated to recurrent expenditure and sh3.2b to development expenditure.
While still in the bush, the NRM and its armed wing, the National Resistance Army (NRA), envisioned that removing “bad leadership” would quickly unlock the economy and improve livelihoods.
However, they encountered a severely broken economy. The country was effectively bankrupt. The sh3.2b development allocation had to focus on rehabilitating roads, schools, hospitals and restoring basic service delivery. It also had to support the restoration of security and the revival of agriculture and industry.
Given the economic ruins, the budget was only a drop in the ocean. The economy had been deteriorating for nearly 15 years since 1971. The expulsion of Asians by President Idi Amin had removed a critical entrepreneurial class, leaving behind industries and businesses that were poorly managed and eventually collapsed. This not only weakened domestic production, but also damaged Uganda’s international reputation as an investment destination, discouraging major foreign investors.
Even after Amin’s fall, political instability persisted, and the Luwero Bush War further deepened economic decline. During the bush war, NRM developed its 10-Point Programme, with point number five emphasising the creation of an independent, integrated and self-sustaining national economy. This envisioned diversification of agriculture, industrialisation and the adoption of appropriate home-grown technology.
Over time, the NRM’s early ideological attraction to centralised economic models, which was common among liberation movements in Africa, faded. A gradual shift towards market-oriented policies and private-sector participation emerged. This transition contributed to improved economic performance and expansion in the following years.
While still in the bush, the NRM and its armed wing, the National Resistance Army (NRA), envisioned that removing “bad leadership” would quickly unlock the economy and improve livelihoods.
However, they encountered a severely broken economy. The country was effectively bankrupt. The sh3.2b development allocation had to focus on rehabilitating roads, schools, hospitals and restoring basic service delivery. It also had to support the restoration of security and the revival of agriculture and industry.
Given the economic ruins, the budget was only a drop in the ocean. The economy had been deteriorating for nearly 15 years since 1971. The expulsion of Asians by President Idi Amin had removed a critical entrepreneurial class, leaving behind industries and businesses that were poorly managed and eventually collapsed. This not only weakened domestic production, but also damaged Uganda’s international reputation as an investment destination, discouraging major foreign investors.
Even after Amin’s fall, political instability persisted, and the Luwero Bush War further deepened economic decline. During the bush war, NRM developed its 10-Point Programme, with point number five emphasising the creation of an independent, integrated and self-sustaining national economy. This envisioned diversification of agriculture, industrialisation and the adoption of appropriate home-grown technology.
Over time, the NRM’s early ideological attraction to centralised economic models, which was common among liberation movements in Africa, faded. A gradual shift towards market-oriented policies and private-sector participation emerged. This transition contributed to improved economic performance and expansion in the following years.
Revenue collection stood at just sh5b in 1986, but it has grown significantly over time. In the 2026/27 budget, domestic revenue is projected at sh44.18 trillion. This contrast reflects the enormous expansion of Uganda’s public finances over nearly four decades. While the 1986/87 and early NRM budgets were measured in billions, today’s budgets are measured in tens of trillions.
Uganda’s economic story from 1986 to the projected 2026/27 financial year is, therefore, one of recovery, stabilisation, structural transformation and now accelerated growth.
GDP stood at about $3.92b (approximately sh2.0 trillion) in 1986. It is projected to reach about $66.1 billion (about sh275 trillion) by the end of FY 2025/2026, representing roughly a 17-fold increase.
In 1986/87, the economy was emerging from prolonged conflict and institutional collapse. Growth remained uneven in the years that followed, with occasional setbacks. It was not until around FY2023/24, after the disruption of the COVID-19 pandemic, that the economy regained stronger momentum. By 2023/24, GDP had risen to about $52b, reflecting significant structural change since 1986. Growth averaged around 5%, driven by a more diversified economy in which services, such as telecommunications, banking, trade and construction became dominant. Public investment in infrastructure and social programmes also supported this growth, alongside a steadily modernising agricultural sector.
In 2024/25, GDP expanded further to an estimated $57-65b, with growth rising to about 6%–6.5%. This period reflected consolidation and expansion, as infrastructure development, industrial activity and private consumption began reinforcing each other more strongly. The economy was also increasingly shaped by large-scale public investment and improved regional trade integration.
The 2025/26 financial year marked a turning point. GDP is projected at more than $66.1b. This acceleration is largely linked to the anticipated start of commercial oil production, which introduces a new structural driver into the economy. For the first time, extractive revenues are expected to significantly influence national output, investment flows and export earnings.
According to the Ministry of Finance, in 2026/27, Uganda’s economy is projected to grow by about 10.4%, up from 6.3%.
The 2026/27 national budget, therefore, represents the culmination of a long transformation from a post-conflict recovery economy of under $5b in 1986/87 to a multi-sector, resource-enhanced economy approaching $80.8b by 2026/27. Early growth was driven largely by reconstruction and basic stabilisation, while the current phase is defined by structural diversification and the emerging influence of oil as a new growth engine.
But there is always a “however.” For this growth trajectory to remain sustainable, corruption must be decisively addressed. These impressive figures lose meaning if public resources are undermined by graft. Although several anti-corruption institutions exist, reports of corruption persist. If anything continues to erode the gains of the NRM era, it is corruption, despite its early recognition in the 10-Point Programme, point number seven stresses the elimination of corruption and misuse of power.
Uganda’s economic story from 1986 to the projected 2026/27 financial year is, therefore, one of recovery, stabilisation, structural transformation and now accelerated growth.
GDP stood at about $3.92b (approximately sh2.0 trillion) in 1986. It is projected to reach about $66.1 billion (about sh275 trillion) by the end of FY 2025/2026, representing roughly a 17-fold increase.
In 1986/87, the economy was emerging from prolonged conflict and institutional collapse. Growth remained uneven in the years that followed, with occasional setbacks. It was not until around FY2023/24, after the disruption of the COVID-19 pandemic, that the economy regained stronger momentum. By 2023/24, GDP had risen to about $52b, reflecting significant structural change since 1986. Growth averaged around 5%, driven by a more diversified economy in which services, such as telecommunications, banking, trade and construction became dominant. Public investment in infrastructure and social programmes also supported this growth, alongside a steadily modernising agricultural sector.
In 2024/25, GDP expanded further to an estimated $57-65b, with growth rising to about 6%–6.5%. This period reflected consolidation and expansion, as infrastructure development, industrial activity and private consumption began reinforcing each other more strongly. The economy was also increasingly shaped by large-scale public investment and improved regional trade integration.
The 2025/26 financial year marked a turning point. GDP is projected at more than $66.1b. This acceleration is largely linked to the anticipated start of commercial oil production, which introduces a new structural driver into the economy. For the first time, extractive revenues are expected to significantly influence national output, investment flows and export earnings.
According to the Ministry of Finance, in 2026/27, Uganda’s economy is projected to grow by about 10.4%, up from 6.3%.
The 2026/27 national budget, therefore, represents the culmination of a long transformation from a post-conflict recovery economy of under $5b in 1986/87 to a multi-sector, resource-enhanced economy approaching $80.8b by 2026/27. Early growth was driven largely by reconstruction and basic stabilisation, while the current phase is defined by structural diversification and the emerging influence of oil as a new growth engine.
But there is always a “however.” For this growth trajectory to remain sustainable, corruption must be decisively addressed. These impressive figures lose meaning if public resources are undermined by graft. Although several anti-corruption institutions exist, reports of corruption persist. If anything continues to erode the gains of the NRM era, it is corruption, despite its early recognition in the 10-Point Programme, point number seven stresses the elimination of corruption and misuse of power.
X-@dmukholi1 dmukholi@gmail.com