Wednesday, 17th September 2025.
by inAfrika Reporter
Uganda’s headline on 17 September is not another spending wish list; it is a deliberate turn of the wheel. Treasury says next year’s budget will be smaller—UGX 69.4 trillion, about $19.9 billion—and domestic borrowing will drop by a fifth to UGX 9 trillion, roughly $2.6 billion at about UGX 3,490 to the dollar. The language is plain: slow the growth of debt service, protect credibility, and finish the big build that is supposed to change the economy’s slope. The list of protected priorities is familiar but sharper this time—get the East African Crude Oil Pipeline over the line to unlock first oil, complete mineral quantification and the refinery groundwork, and keep the standard gauge railway moving. For readers who track the macro pulse, the pivot lands in a monetary environment that has held steady all quarter: the Bank of Uganda kept the policy rate at 9.75% in August, with inflation contained and growth guidance intact. That backdrop lowers the political temperature for consolidation; it also shortens the distance between policy and confidence on the ground.
A smaller budget is not a smaller ambition; it is a different financing mix. Lower treasury-bill and bond issuance should ease pressure on lending rates over time and leave more oxygen for the private sector to borrow in shillings at spreads that make sense. If that happens while the pipeline and associated upstream projects keep hiring, buying, and contracting, the demand that matters—jobs, cash to firms, local content orders—continues without the signal to markets that Uganda is trying to outspend its way to growth. The credibility test is sequencing and delivery. The government has tied its colors to “completion,” and that word now carries deadlines: pipeline welds, terminal systems in Tanga, right-of-way disputes closed, compensation accounts settled, and the refinery decisions made on a timetable investors can price. Independent industry reporting at the end of August suggested EACOP works were roughly two-thirds complete, a number that concentrates minds because it turns an argument into a finish line.
The budget signal also meets a household reality. Every Ugandan feels prices at the pump, the cost of a kilowatt-hour, and the price of a taxi ride before they notice the shape of a fiscal framework. Stabilising borrowing will not cancel those monthly shocks, but it can dull them by anchoring the currency and lowering the risk premium that feeds into everything from fuel cargoes to supermarket shelves. It also sets a tone for line ministries: deliver on the assets that change the productive base, resist the temptation to add pet projects to a tightening envelope, and prove to lenders—domestic and foreign—that Uganda can sequence capital expenditure with discipline. In practical terms, that means engineers finishing jobs and accountants closing projects on time; it means fewer headlines about procurement restarts and more boring communiqués about milestones met.
If there is a lesson from the last two years, it is that Uganda does better when its story is boring in the right places. Investors want splice rates and commissioning dates, not drama; households want price stability and predictable services. A budget that is smaller and a borrowing plan that is lighter will not win applause on their own. But combined with steady monetary policy and a short, honest list of national priorities, they can buy what every economy needs more than slogans: time. If this fiscal turn delivers a pipeline that flows, a railway that moves freight, and a mining map that attracts responsible capital, it will be money saved today to earn hard currency tomorrow. The choice is not austerity versus growth. It is credibility now versus fragility later—and on that score, 17 September reads like a grown-up decision.
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