By Our reporter

KAMPALA – The government has released more funds than initially approved for the current financial year ending June 30, underscoring an aggressive push to sustain economic growth while raising fresh concerns about fiscal discipline.

Figures unveiled by the Ministry of Finance, Planning and Economic Development on April 9, show fourth-quarter disbursements of Shs17.444 trillion, bringing total releases to Shs77.001 trillion, equivalent to 106.4% of the approved budget and 95.1% of the revised plan.

Presenting the data, Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi said the disclosures aim to improve transparency in public finance management.

“This is intended to give Ugandans and stakeholders a clear picture of how public resources are being deployed and to support effective monitoring of service delivery,” Ggoobi noted.

The latest figures highlight a spending profile increasingly dominated by mandatory obligations. Debt and treasury operations absorbed Shs6.38 trillion in the fourth quarter alone, reflecting the growing burden of debt servicing. Wages and salaries accounted for Shs2.04 trillion, while pensions and gratuity took Shs343.39 billion. Allocations to parliament, judiciary and the Office of the Auditor General stood at Shs204.04 billion, Shs73.01 billion and Shs12.66 billion, respectively.

Ggoobi, however, signalled the risks of rising fixed costs. “We must remain vigilant to ensure that mandatory expenditures do not crowd out critical investments that drive growth and transformation,” he said.

Focus growth areas

At the same time, the government maintained funding for its growth strategy focused on agro-industrialisation, tourism, mineral development, and science and technology. Agro-industrialisation received Shs314.9 billion, science and innovation Shs184.5 billion, tourism Shs48.6 billion, and oil and gas development Shs24.3 billion.

“Our focus remains on sectors that can unlock value, create jobs and expand exports. That is how we sustain high and inclusive growth,” Ggoobi said.

Spending on wealth creation programs also remained significant. The government released Shs542.3 billion for the Parish Development Model and Shs74.7 billion for other financing schemes, including capitalisation of the Uganda Development Bank and the Uganda Development Corporation.

“The real impact of these releases will depend on how efficiently they are deployed at the last mile, particularly in empowering households and small enterprises,” Ggoobi said.

Infrastructure continued to anchor public investment, with the Ministry of Works and Transport receiving Shs1.762 trillion, largely financed externally. Energy projects attracted Shs331.03 billion, while urban development in Greater Kampala drew funding for roads, drainage and sanitation upgrades.

“Investments in infrastructure are not optional—they are foundational to lowering the cost of doing business and enhancing competitiveness,” he said.

In the social sectors, health received Shs372.88 billion, with the National Medical Stores allocated Shs342 billion for essential medicines. Education funding included Shs257.54 billion for the ministry and Shs113.76 billion for public universities.

“We cannot achieve sustainable growth without investing in the health and skills of our population,” Ggoobi said.

The government also stepped up efforts to clear arrears, releasing Shs454.2 billion in the fourth quarter and bringing the annual total to Shs973.1 billion.

“All Accounting Officers must ensure that resources released for arrears are used for that purpose and that no new arrears are created,” he said.

Faster economic growth

The spending expansion comes as macroeconomic indicators strengthen. According to the finance ministry, the economy grew 8.5% in the second quarter of FY2025/26, up from 5.4% a year earlier, with first-half growth averaging 6.7%. Full-year growth is projected at 7.0%, with GDP expected to reach $68.4 billion by June 2026. Inflation remains contained at 3.3%, and the currency has been stable.

“This resilience reflects prudent macroeconomic management and a strong foundation for sustained growth,” Ggoobi said.

Still, the budget overrun sharpens questions about fiscal consolidation. Higher spending may support near-term growth and service delivery, but it also risks undermining efforts to rein in deficits if not matched by revenue gains and tighter controls.

“We are sustaining growth momentum while remaining within the broader framework of fiscal consolidation. This requires careful prioritisation and disciplined execution,” Ggoobi said.

As the fiscal year closes, policymakers face a familiar trade-off: maintaining growth through targeted spending while ensuring value for money and long-term fiscal stability.

“The objective is clear: sustain macroeconomic stability while ensuring that public spending translates into real outcomes for citizens,” he said.