By David Mwanje
Kampala– The Ministry of Finance, Planning and Economic Development has released the Budget Execution Circular for Financial Year 2025/26, unveiling a strategic roadmap to kickstart the Fourth National Development Plan (NDP IV) and the Tenfold Growth Strategy. Issued under the Public Finance Management Act, the circular provides policy directives and administrative guidelines to ensure seamless budget execution across central and local governments, state-owned enterprises, and public corporations.
A Pivotal Year for Growth and Elections
Approved by Parliament and assented to by President Yoweri Museveni on June 30, 2025, the FY 2025/26 budget marks the launch of NDP IV, aiming for a tenfold increase in economic growth. With national elections looming, the budget prioritizes secure and peaceful electoral processes while concluding the 2021-2025 Government Manifesto, paving the way for the 2026-2030 vision. “This budget is a bridge to our future, aligning resources with the transformative goals of NDP IV and the aspirations of our people,” said Permanent Secretary Ramathan Ggoobi.
Strategic Focus: ATMS and Enablers
The budget emphasizes four key pillars—Agro-Industrialisation, Tourism, Mineral-Based Industry, and Science, Technology, and Innovation (ATMS)—supported by enablers like peace and security, human capital development, infrastructure, and anti-corruption measures. These priorities aim to drive economic monetization, regional integration, and environmental sustainability. “Our focus on ATMS and enablers is deliberate, ensuring every shilling spent fuels Uganda’s journey toward economic prosperity,” Ggoobi emphasized.
Cash Flow and Fiscal Discipline
A detailed Cash Flow Plan ensures liquidity and timely service delivery, with Accounting Officers urged to adhere strictly to approved budgets. The Ministry has allocated Shs 1.4 trillion to clear verified domestic arrears, targeting suppliers, statutory expenses, and utilities. Ggoobi warned against new arrears, stating, “Accounting Officers who sign contracts without confirmed funds will face personal liability, as we are committed to eliminating arrears within three years.” The Ministry will reject in-year requests for additional expenditure limits, reinforcing fiscal consolidation to boost revenue and reduce deficits.
Tackling Arrears and Tax Compliance
To curb arrears, payments will prioritize verified claims, with an independent audit firm ensuring transparency. Accounting Officers must remit taxes and social security deductions promptly to the Uganda Revenue Authority (URA) and National Social Security Fund (NSSF). “Timely remittance of taxes and deductions is non-negotiable; failure to comply will face strict corrective measures,” Ggoobi declared, highlighting quarterly compliance reports to prevent further arrears.
Local Government Reforms and Transparency
Local governments will benefit from enhanced fiscal transfers via the Programme Budgeting System (PBS) and Integrated Financial Management System (IFMS). The Parish Development Model (PDM) receives Shs 1,096.9 billion to support grassroots economic activities, with strict guidelines to prevent fraud. The Uganda Inter-Governmental Fiscal Transfers Programme (UgIFT) focuses on completing health and education infrastructure by December 31, 2025. Accounting Officers are mandated to hold accountability days and submit timely performance reports, with the State of the Parish Economy and Asset Register (SPEAR) framework deepening parish-level planning.
Accountability and Performance
The circular stresses transparency, requiring quarterly performance reports within 30 days of each quarter’s end. Non-compliance risks suspension of IFMS access and public disclosure of defaulting officers. Local governments must share progress reports with District Chairpersons and Resident District Commissioners to enhance oversight. The Ministry also introduced the Area Based Commodity Development (ABCD) Portal to streamline commodity value chain data, launching in Q1 FY 2025/26.
A Call to Action
Ggoobi urged Accounting Officers to avoid “budget execution games” like misreporting emergencies to secure funds, emphasizing diligent execution. “This circular is our blueprint for transformative growth. We expect unwavering commitment to transparency, efficiency, and service delivery to realize NDP IV’s ambitions,” he concluded. As Uganda embarks on this pivotal financial year, the government’s focus on strategic investments, fiscal discipline, and grassroots development signals a bold stride toward inclusive economic prosperity.
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