KAMPALA, UGANDA – The government has outlined measures to strengthen Domestic Revenue Mobilization (DRM) ahead of the 2025/26 budget process.
Minister of State for Investment and Privatisation, Evelyn Anite, announced the measures during a Budget Consultative Workshop for FY 2025/26 in Arua.
“We shall finance the budget for FY 2025/2026 using our domestically generated resources, as well as external resources. Considering that external financing has reduced, emphasis will be on strengthening our Domestic Revenue Mobilization Strategy,” Minister Anite said.
The government will repurpose resources in the current budget to improve allocative efficiency and focus on high-impact sectors. Minister Anite noted that effective implementation of the Domestic Revenue Mobilization Strategy (DRMS) will also be prioritized.
To boost domestic revenue, the government will enhance Local Revenue performance through automation of systems. This move is expected to streamline revenue collection and reduce leakages.
The government will also incentivize diversification of private capital to balance government securities vis-à-vis other forms of private finance. Rethinking the reform of the pension sector, insurance, and capital markets is expected to unlock huge financing potential.
Further exploration of Oil & Gas reserves is also expected to increase revenue. Minister Anite explained that leveraging affordable and sustainable financing through adequate capitalization of key institutions such as Uganda Development Bank (UDB), Uganda Development Corporation (UDC), Agricultural Credit Facility (ACF), Small Business Recovery Fund (SBRF), Emyooga, and the Parish Development Model (PDM) will be crucial.
The government will diversify public finance options by implementing the Public Investment Financing Strategy. This includes exploring concessional and commercial loans, Islamic finance, and Climate Finance.
Minister Anite emphasized the importance of aligning local government budgets with the national strategic direction. “I implore you to pay interest in ensuring that your budgets are in line with the priorities of Government to grow the economy ten-fold in line with the Strategic Direction in the NDPIV.”
The workshop aimed to provide feedback on previous budget consultations, convey the government’s strategic direction and budget strategy for FY 2025/26, and disseminate indicative planning figures and grant program guidelines.
The government’s ambitious plan to grow the economy ten-fold by 2040, as outlined in the Fourth National Development Plan (NDP IV), will guide the budget process.
“Growing the economy ten-fold by 2040 requires shifting to a higher growth trajectory of propelling the economy to double-digit growth; raising the tax-to-GDP ratio to 30%; and raising per capita GDP from the current USD 1,146 to USD 7,000,” Minister Anite explained.
State Minister for Northern Uganda Kenneth Omona applauded the government’s consultative and transparent nature of the budget formulation process. “I commend all players spreading the gospel of development and mobilizing communities to participate in wealth creation initiatives and ultimately contribute to national development,” he said.
Omona encouraged those who have not participated to quickly take advantage of the various wealth creation initiatives, including the Parish Development Model (PDM), Emyooga, UDB financing GROW project, and agricultural credit fund.
“Northern Uganda is one of the regions with fertile soils; we can do better in agriculture. Coffee and cotton are some crops we can highly concentrate on to help our people recover from poverty and improve livelihoods,” said Omona. He also called upon leaders to prioritize the road infrastructure in the region to improve connectivity and trade.
