Treasury tightens spending rules ahead of 2027/28 budget
The new approach is anchored on five rules that the Treasury says should guide how public institutions plan, budget and spend: no budget, no commitment; supplementary budgets must remain exceptional; zero tolerance for new domestic arrears; no ready project, no budget; and no wage provision, no recruitment.
Minister of Finance Henry Musasizi. (File photo)
________________
Government is tightening controls on public spending ahead of the preparation of the 2027/28 budget, warning accounting officers and officials responsible for planning, procurement and financial management that there will be less room for unauthorised commitments, poorly prepared projects, unpaid bills and recruitment without funding.
The new approach is anchored on five rules that the Treasury says should guide how public institutions plan, budget and spend: no budget, no commitment; supplementary budgets must remain exceptional; zero tolerance for new domestic arrears; no ready project, no budget; and no wage provision, no recruitment.
The rules were among the key issues discussed on August 19, 2026, at Speke Resort Munyonyo during a national meeting of heads of planning, accounts and procurement units from central and local governments, public universities, referral hospitals and Uganda's missions abroad.
According to the finance ministry, some of the measures are already being implemented under the Budget Discipline and Accountability Charter, while others are being reinforced as part of wider reforms to improve budget credibility and public service delivery.
The reforms are expected to influence the preparation and execution of future budgets, including the 2027/28 financial year, as the Government seeks to ensure that resources approved by Parliament are directed to priorities that can be implemented and produce measurable results.
Finance minister Henry Musasizi told the officials that the Government was changing the way it assesses the performance of public institutions.
The Treasury warned against commitments made outside authorised Government financial management systems and directed planning and accounting officials to stop obligations that do not have the necessary budget and cash backing.
For the 2027/28 budget process, the rule is expected to put greater pressure on ministries, agencies and local governments to ensure that their spending proposals are realistic before they are submitted for funding.
The Treasury's position is that institutions should not commit money on the assumption that additional funding will later be provided.
Patrick Ocailap, the deputy secretary to the Treasury, who represented the permanent secretary and secretary to the Treasury, Ramathan Ggoobi, said the new approach requires officials to plan realistically and account for every shilling.
“This is ‘time for no more sleep.’ That instruction is not rhetoric; it is a mandate to plan realistically, execute disciplined budgets, and account for every shilling without excuse,” Ocailap said.
The rule is also intended to prevent institutions from creating financial obligations that later become domestic arrears.
Government institutions have also been directed not to create new domestic arrears and to settle obligations within statutory and contractual timelines.
The Treasury argues that allowing new arrears to accumulate undermines budget credibility because the Government is eventually forced to divert resources from planned programmes to settle old obligations.
The fourth rule targets projects that enter Government budgets before they are sufficiently prepared for implementation.
The Treasury says projects should only be included in the Public Investment Plan and budget if they have approved feasibility studies, cost designs, procurement and implementation plans, and clear financing arrangements.
Under the new approach, stalled or underperforming projects will also not automatically receive additional funding. Their performance problems must first be addressed through an approved remediation plan.
The measure is intended to reduce the number of projects that consume public resources without delivering services within the planned timeframe.
Gideon Mugulusi, chairperson of the Uganda National Planners' Union and district planner for Buyende, said Uganda's challenge is not a shortage of plans, policies or budgets but the weak connection between them and actual results.
“The fundamental question before us is not whether Uganda has plans, policies, programmes, institutions and budgets. The question is whether these instruments are sufficiently connected to convert national aspirations and public resources into measurable improvements in citizens' lives,” Mugulusi said.