Uganda’s Ministry of Finance has revealed that shortfalls in domestic revenue has forced government to borrow extra money to meet the unplanned expenses.
This is contained in the Performance of the Economy Monthly Report for October 2025 released last week by Ministry of Finance’s Macroeconomic Policy Department.
“Preliminary data indicates that government fiscal operations in October 2025 resulted in an overall fiscal deficit (net borrowing) of Shs 1,479.65 billion, higher than the programmed Shs 1,352.55 billion. The deviation was driven by shortfalls in domestic revenue and grants, coupled with higher-than-planned expenses,” Ministry of Finance’s report reveals.
According to the report, total revenues and grants amounted to Shs 2,573.09 billion, achieving 89.2 percent of the programmed target (Shs 2,884.89 billion).
“The underperformance was attributed to lower than-expected collections from direct taxes, indirect taxes and non-tax revenues, as well as less than programmed grant disbursements,” the report says, adding that government expenses during the month of October 2025 amounted to Shs 3,272.03 billion, reflecting a 104.3 percent performance rate against the planned Shs 3,136.08 billion for the month.
This performance was mainly driven by higher than planned spending for the purchase of goods & services as well as grants, particularly to Local Governments.
“Net acquisition of non-financial assets in October 2025 was lower than planned, amounting to Shs 780.71 billion compared to Shs 1,101.35 billion. This shortfall was mainly registered under externally funded projects on account of delays in disbursements of required funds during the month,” the report says.
It should be noted that Uganda’s public debt has registered an astronomical increase in recent years.
According to the Ministry of Finance, as of June 2025, Uganda’s total public debt stood at approximately Shs 116.2 trillion (about $32.3 billion), which represents a 26.2% increase from the previous year. The debt includes about UGX 66 trillion in external debt and roughly UGX 60 trillion in domestic debt. However, this has since skyrocketed considering the fact that Parliament recently approved multiple loans and grants totaling over UGX 9.7 trillion. The largest single loan package within this approval was a loan of up to US$1.341 billion (approximately UGX 4.68 trillion) from the World Bank for infrastructure and other development programs.
