Finance releases sh19.7 trillion for fourth quarter expenditure

KAMPALA - Three months to the end of the 2024/25 financial year, the finance ministry has released sh19.7 trillion with a directive to all accounting officers to prioritise the payment of service providers and civil servants’ salaries. 

The ministry’s permanent secretary, Ramathan Ggoobi, on Tuesday (April 1, 2025) said that in order to eliminate the accumulation of domestic arrears and penalties, sh1.9 trillion has been released to cater for debts owed to contractors for work done on national roads, district, urban and community access roads. 

This money will also be used to pay for preliminary works for the implementation of the Standard Gauge Railway connecting Kampala to the Uganda-Kenya border of Malaba (273km) as well as the Kalangala Infrastructure service ferry, among others. 

Another sh1.9 trillion has been released to cater for wages and salaries of civil servants across government entities. 

“All accounting officers are instructed to comply with the commitment to pay salaries, pensions and gratuity by the 28th day of every month as per the approved salary scales. Accounting officers are directed to prioritise payment of service providers on time. We have released the money on time and I don’t want to hear that Ugandans are not receiving their salaries on time or that service providers have not been paid,” Ggoobi said. 

He added that the fourth quarter release was derived from the quarterly work plans and procurement plans of ministries, departments, agencies and local governments while taking into consideration the projected resource inflows. 

Out of the total budget of sh77.1 trillion for the financial year 2024/25, Ggoobi said a total of sh76.4 trillion has so far been released indicating a 99% performance. 

He said of the total release, sh8.9 trillion is for wages, for non-wage recurrent and development projects, sh2.6 trillion is for external financing, sh8.1 trillion is to cater for debt and treasury operations and sh83.8b is to help in local revenue collection. 

The Ministry of Finance permanent secretary, Ramathan Ggoobi.

He said Parliament approved the full transfer of budget functions for institutions affected by the rationalisation of government agencies and public expenditure process and the funds have been released. 

Ggoobi said the budget for this financial year was designed to support the implementation of the ten-fold growth strategy, with more emphasis on ATMS (agro-industrialisation, tourism, manufacturing as well as science and technology), and the corresponding accelerator actions. 

“As Government, our main objective is to promote technical efficiency by ensuring that all ministries, departments, agencies and local governments deliver better services to Ugandans at the lowest cost; as we put more emphasis on growth drivers and their enablers,” Ggoobi said.

State of the economy 

On the state of the economy, Ggoobi said the country’s GDP grew by 6.7% in the first quarter of the current financial year (2024/25) and by 5.3% in the second quarter, compared to the growth rates of 5.6% and 5.8% respectively over the same period in the previous financial year (2023/24). 

He attributed the growth to increased manufacturing activity by industries, food crop production, as well as wholesale trade and transport services. 

The finance ministry’s permanent secretary expressed optimism of a 6.4 % growth that by the end of the 2024/25 financial year. Statistics provided showed that headline inflation decreased to 3.4% in March 2025 from 3.7% in February.

This was largely due to a reduction in core inflation, particularly in the cost of services such as passenger transport and hotel lodging, and lower prices of food crops, particularly onions, matooke, fresh cassava and mangoes. 

Ggoobi, however, said inflation is expected to remain within the policy target of 5% for the remainder of the financial year, supported by prudent monetary and fiscal policies. 

He noted that the Ugandan shilling maintained relative stability against the US dollar, trading at an average mid-rate of sh3,667.9 per dollar in March, compared to sh3,677.7 per dollar in February. 

The permanent secretary attributed the stability to increased dollar inflows, particularly from offshore portfolio investors, good export performance, remittances and foreign direct investments, especially in the oil sector. 

It was also noted that Uganda’s total export earnings in the second quarter amounted to $2.17b (sh9.9 trillion) due to an increase in coffee export prices, mineral products, fish, simsim and electricity.

The import bill grew to $3.43b (sh12.5 trillion) in the same period due to higher value and volume of non-oil imports. 

By the end of March 2025, Ggoobi said the Government had collected domestic revenues amounting to sh22.3 trillion against a target of sh22.5 trillion, implying a cumulative shortfall of sh136.64b. 

He said during the final quarter of the financial year, the Uganda Revenue Authority and other revenue-collecting institutions are expected to collect a total of sh9.37 trillion.

Reactions 

Works and transport minister Gen. Edward Katumba Wamala said the payment for contractors is a big relief to the ministry since they have been patient for a long time. 

“Our expectation is that all those who had slowed down or abandoned the construction sites will resume work with a new vigour,” he said. The Civil Society Budget Advocacy Group executive director, Julius Mukunda, thanked the finance ministry for the proposed tax exemption on start-up businesses owned by citizens. 

However, Mukunda expressed concern over the increasing public debt and wondered what the finance ministry is doing to mitigate the problem. Mukunda also expressed concern over unpredicted budget figures, which have been changing from sh57 trillion at the beginning of the financial year and is now at sh71.9 trillion. 

“These changing figures have not been very well explained. It is important that he (Ggoobi) explains so that the public can rely on the figures. Secondly, I notice that there’s a weakening of monitoring of ministries, departments and agencies to ensure that they set their priorities right. This is why we have so many supplementary budgets. The question is; are we budgeting for the right priorities?” Mukunda asked. 

Despite billions of shillings released, Dr Arthur Bainomugisha, the Advocates Coalition for Development and Environment executive director, wondered why the money was not reflected in people’s pockets. “Why isn’t this money in people’s pockets?” he wondered.