KAMPALA, Uganda – The opposition warned that Uganda’s rising debt burden, shifting fiscal targets and controversial tax proposals risk undermining livelihoods, weakening institutions and choking service delivery, according to its alternative budget for the 2026/27 financial year.
Presenting the proposals at Parliament on Tuesday, Leader of the Opposition Joel Ssenyonyi said the country’s current fiscal path is unsustainable, with the bulk of government spending already locked into debt obligations and fixed costs.
He said under the proposed national budget of over 78 trillion shillings, more than half of the resources are pre-committed, leaving limited fiscal space for critical sectors such as health, education and infrastructure.
“For every 1,000 shillings collected in taxes, more than 300 shillings goes directly to lenders,” Ssenyonyi said, warning that “Uganda is increasingly borrowing not for development, but for survival.”
The opposition estimates that only about 34.2 trillion shillings – nearly 44% of the budget – is available for discretionary spending, a squeeze it says is already being felt through underfunded public services, stalled projects and widening inequality.
The opposition singled out several projects including Atiak Sugar Factory, Dei BioPharma, Lubowa International Specialised Hospital and the Inspire Africa coffee initiative, describing them as investments that have absorbed significant public funds without delivering commensurate value.
Ssenyonyi said such projects reflect deeper weaknesses in public finance management and prioritization, arguing the government must shift focus from prestige investments to service delivery.
Civil Society Budget Advocacy Group Executive Director Julius Mukunda said persistent changes in budget estimates point to deeper planning challenges.
“These numbers are a moving target. Today it is 84 trillion shillings, tomorrow 43 trillion shillings. Parliament must work with concrete and consistent figures,” Mukunda said.
He noted that debt servicing alone is consuming nearly 39% of the budget, leaving little room for development expenditure. “We believe your priority is where your money is, and most of the money is going into debt,” he added.
Mukunda also highlighted a financing gap in key government programs, particularly under the National Development Plan, where sectors such as agro-industrialization face a shortfall of about 8.1 trillion shillings. He argued that Uganda can raise more domestic revenue without increasing tax rates by improving efficiency, including leveraging local governments to support tax collection.
Mukunda criticized the increase in tax on imported second-hand clothes, known locally as “mivumba,” from 15% to 30%, arguing it risks hurting low-income earners without a viable local textile industry to fill the gap. He described the proposed taxation of smartphones as a direct barrier to youth entrepreneurship and digital participation.
“The phone is the shop, the office, the address for many young people. Making it expensive is telling them to stay poor,” Mukunda said.
In their budget statement, the opposition further criticized the government for slashing domestic arrears payments from 1.4 trillion shillings to 200 billion shillings, calling it a breach of earlier commitments. Both the opposition and civil society pointed to inefficiencies such as idle loans, where government continues to pay commitment fees on undisbursed funds due to delayed project execution.
The result, they argued, is a cycle of stalled infrastructure projects, with at least 27 major developments reportedly suspended due to funding constraints.
The opposition proposed a scaled-down and more realistic budget of about 71.4 trillion shillings, aligned with actual revenue performance. Key recommendations include reducing domestic borrowing, prioritizing arrears clearance and cutting administrative spending on travel, workshops and government vehicle fleets to create what it described as a “service delivery buffer.”
The alternative framework also calls for capping interest payments, strengthening revenue collection efficiency instead of raising taxes, and prioritizing concessional borrowing over commercial debt.
The opposition raised concerns over underfunding in critical social sectors.
“Health continues to receive only about 6% of the budget, far below the 15% Abuja target, resulting in drug shortages, understaffing and poor service delivery,” the budget statement reads in part.
Ssenyonyi added that agriculture, which employs the majority of Ugandans, remains underfunded with limited investment in irrigation, extension services and market access.
The opposition framed its alternative budget as a choice between maintaining the current trajectory and adopting reforms aimed at protecting citizens’ welfare.
“We must choose discipline over excess, transparency over opacity, and long-term national interest over short-term convenience,” Ssenyonyi said.
