Parliament approves sh69.4 trillion Budget Framework Paper for FY 2026/27

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On Thursday, January 29, 2026, Parliament approved the Budget Framework Paper (BFP) for the 2026/27 Financial Year.

Proposed 2026/27 resource envelope

The BFP proposes a sh69.4 trillion resource envelope, representing a reduction of approximately Sh2.976 trillion from the current budget.

This decline is largely due to a slump in external financing for project support (Sh1.308 trillion) and domestic borrowing (Sh2.428 trillion).

Some of the highly funded areas include agro-industrialisation at Sh1.471 trillion, governance and security at Sh9.025 trillion, Parliament at Sh1.059 trillion, human capital development at Sh9.857 trillion and integrated transport infrastructure and services at Sh6.757 trillion.

And yet this funding slightly falls short of the National Development Program (NDP IV) proposed figures.

Under Section 9 (3) of the Public Finance Management Act (PFMA) 2015, the Minister responsible for Finance (MoFPED) is legally required to prepare a Budget Framework Paper that is consistent with the National Development Plan.

Ministerial Policy Statements

With this out of the way, the next agenda item on the House’s budget calendar, going forward, shall be tabling of the Ministerial Policy Statements (MPS) by Government entities.

Section 13(13) of the Public Finance Management Act, 2015, stipulates that “The Minister responsible for a vote, ministry or the head responsible for a vote, shall by the 15th of March submit to Parliament the policy statements for the preceding financial year, for the ministries or the other votes, as the case may be.”

In practice, an MPS sets out the policy priorities of each vote for the coming year, while, on the other hand, the BFP, which must be tabled by December 31 each year, establishes the budget ceilings within which these priorities are to be delivered.

MPs, finance ministry meeting

However, as the House prepares for this exercise, Deputy Speaker Thomas Tayebwa, during plenary on Thursday, January 29, 2026, directed Budget Committee chairperson Patrick Opolot Isiagi (Kachumbala County, NRM) to meet the executive and committee chairpersons to this end.

“Can I guide that you meet as Chairman of the Budget Committee with the Minister of Finance and his team, he will determine who to come with and chairpersons of committees to agree on how you are going to process this budget from MPS’s (Ministerial Policy Statements), so that we make your work easier,” Tayebwa ordered.

Battle lines drawn

The directive followed Isiagi’s earlier warning, urging committee chairpersons not to accept MPSs from government entities unless they are accompanied by a fully costed workplan, stressing that uncosted submissions undermine fiscal accountability.

“I would like us to agree with our colleagues, the sector committees, not to receive the budgets from MDA’s (Ministries, Departments and Agencies of Government) without costed workplans,” he said.

“I would like to agree that there is a lot of money redundant in the budgets which cannot be justified. But now, we need to drill down to the last shilling by all these MDA’s providing costed workplans. You will find money being abandoned,” Isiagi further precited.

Budget saga

However, John Teira, the vice chairperson of the Legal and Parliamentary Affairs Committee, expressed hesitation during the sitting about revisiting what to him appeared as ‘uncharted territory’.

He warned that Parliament risked burning its fingers, as it happened in the 2024/25 Financial Year, where they reportedly re-allocated Sh750 billion, only for President Yoweri Museveni to return the Appropriation Bill to Parliament.

Suffice it to note that an Appropriation Act contains the amount of monies to be spent by each MDA and Local Government, without which, the Government cannot withdraw funds from the consolidated Fund.

“We have had issues with what amounts to budgeting and appropriation. At every time, on the request of costed workplans, the response from finance, usually the PSST (Ramathan Ggoobi), is that we are going into budgeting and not appropriation. So, we have not settled that discussion between the technical team of the Ministry of Finance and this institution,” Teira pointed out.

“That is why in the last budgeting cycle, we had issues which led to the challenges we had in the processing of the budget,” he added.

Finance pushes back

However, State Minister for Finance Henry Musasizi, who, unlike some colleagues, is a familiar face in the House, downplayed any fears. Arguing that the ping-pong between the two arms of Government was normal.

“I don’t know what Teira is trying to drive at, but as far as we are concerned, we have no problem in this process for us, at Finance. It is a consultative process between Parliament and the Ministry of Finance, and we have always agreed by consensus on these issues,” Musasizi intimated.

“I remember in the 9th Parliament, there were times when we would have a lot of back and forth, even to the extent of voting on the budget,” he alluded.

Skyrocketing debt

Yet, his counterpart in the shadow cabinet, Kiira MP Ibrahim Semujju Nganda, says the government has long disregarded guiding frameworks such as the 2021–2026 Charter for Fiscal Responsibility, which aimed to reduce public debt to below 50 percent of Gross Domestic Product (GDP). Turning them, in his view, into paper tigers they can trash at their volition.

Section 5(2) of PFMA mandates that the Charter be published no later than one month after Parliament’s approval, or within a timeline set by Parliament. Section 6 obliges the Cabinet to adhere to the Charter when making decisions with implications for public finances.

And yet, while public debt has grown to Sh116 trillion (representing 51 percent debt-to-GDP ratio), Semujju, while presenting the minority report, said that the country’s borrowing appetite shows no signs of slowing.

“The NRM government plans to borrow over Sh18.5 trillion from the domestic market (commercial banks) to finance the budget. The Sh8.9 trillion will be new loans to finance the budget, and Sh9.6 trillion to rollover maturing debt. The Central Bank is concerned with the domestic debt to private sector credit. By over-borrowing from commercial banks, the NRM government is crowding out the private sector,” he warned.

Increased interest payments

Many of these loans, Semujju said, are expensive. A phenomenon, he contended, partly explains why interest payments are projected to rise from Sh11.3 trillion in FY 2025/26 to Sh12.73 trillion in FY 2026/27.

Of this, interest on domestic debt alone is expected to consume Sh10.7 trillion, which is more than a quarter of the projected Shs40 trillion revenue collection.

Stalled projects

Among the sixty-six worst performing donor-funded projects, he cited Kampala–Jinja Expressway, which was scheduled to start on January 1, 2014 and finish by June 30, 2023. The project is funded by the Government of Uganda (GOU) counterpart funding of $600 million (Sh2.14 trillion) and an African Development Bank (AfDB) loan of $229.5 million (Sh818 billion).

“The loan was signed on 16th March 2021, with an effectiveness date of 5th July 2021 and an expiry date of 30th June 2027, for Phase 1 (Kampala-Namagunga, covering 35 km). The budget for right-of-way (RoW) acquisition was estimated at Sh1.284 trillion, out of which Sh498.4 billion (38.8%) was paid. The physical progress of the project is zero percent,” Semujju explained.

Others he cited include the $547.543 million Busega–Mpigi Expressway project, which was expected to end on May 27, 2022. And yet, despite its completion dates being revised twice, Semujju predicts that chances are high the road will not be completed in the decade to come. 

AG observations

It is worth recalling that in his report to Parliament for the year ended June 30, 2025, Auditor General (AG) Edward Akol reviewed the decision matrix of 106 Government of Uganda (GoU) funded projects and found that, despite slow implementation, the Government, as of July 1, 2025, had on-boarded 149 new, fully GoU-funded projects worth Sh19.584 trillion.

“I reviewed the project performance as reported in the project master file and project budget performance data from 2020/2021 to 2024/2025 and noted that the Government budgeted solely to fund 106 projects worth Sh13.3Tn. However, only UGX10.07Tn was released to the projects, leading to a shortfall of Sh3.2Tn (24 percent),” he added.

What others say

Wilson Muruli Mukasa (Minister for Public Service), I wish to implore the Ministry of Finance that in the next budget circular that is coming, surely that aspect of enhancement, particularly of the teachers and Local Government (LG) workers, is not left out.

William Chemonges (Kween County, NRM): We have invested money even in these industrial skilling centres, and we are now thinking about many other ways of creating jobs, like industrialisation. But the issue is power, even in the seed schools we have invested money, you find we have computers, but don’t have power. We have Health Centre III’s, which don’t have power.

Enos Asiimwe (Kabula County, NRM): The policy preamble is beautiful and smartly addresses our policy direction. But when it comes to allocations, it doesn’t reflect the policy direction. For example, I am seeing they have preliminarily allocated Sh84 billion to Uganda Development Bank (UDB) from sh414 billion.

Isaac Otimgiw (Padyere County, NRM): In the beginning, we had over 20,000 villages not connected to safe water. It is sad that even at this point, there is not much emphasis being done in terms of providing safe water to our communities.

Christine Kaaya Nakimwero (Kiboga DWR, NUP): We need some special investigations on people who own land prior to project activities, especially in swamps.

Dr Samuel Opio Acuti (Kole North, Indep); Within this Budget Framework Paper, one of the issues is the level of alignment to NDP IV……When you look at the report, there is no provision for some of these core projects. For example, the construction of the Karuma bridge, which connects us to South Sudan and even Congo. Last year, we had serious issues with it, and the repairs we were told would only be temporary.