Finance ministry urges prioritisation as Shs 21.82 trillion released for Q2 of FY 2026/27
KAMPALA, October 16, 2026 – The Ministry of Finance, Planning and Economic Development [MoFPED] has urged government ministries, departments and agencies [MDAs] to prioritise expenditure as rising fuel and food prices put pressure on available resources.
Speaking on Thursday to journalists at the ministry’s head office in Kampala, during a briefing on the Second Quarter [Q2: October, November and December] budget releases for the 2026/2027 financial year [FY], Patrick Ocailap, the Deputy Secretary to the Treasury at MoFPED, said government agencies would have to operate within their approved budgets despite rising costs. Shs 21.82 trillion has been released for the second quarter, representing about 26 percent of the approved annual budget for FY 2026/2027.
Ocailap said the quarterly releases are guided by government annual and quarterly workplans, projected domestic revenue collections, available cash resources and anticipated external disbursements.
He said higher fuel prices would require government agencies to cut non-essential travel and redirect available resources towards activities critical to service delivery.
Explaining the need for government institutions to prioritise expenditure, Ocailap said: “What it means is that if Shs 50 million was buying the Minister of Finance 20 litres last quarter, the Minister of Finance will still live within the Shs 50mln this quarter and buy less fuel.”
He added that government agencies would need to adjust their spending plans to ensure that essential programmes continue despite pressure on their budgets.
Of the funds released, Shs 10.75trn will cater for statutory obligations and institutions, including debt and Treasury operations, while Shs 2.42trn is for wages and salaries and Shs 376.6 billion for pensions and gratuity.
Under the Agro-Industrialisation Transformation and Modernisation Strategy [ATMS], which supports the government’s Tenfold Growth Strategy, agro-industrialisation was allocated Shs 224.5bln for agro-industrial research and innovation, operations and other critical government activities.
Tourism development received Shs 48.2bln for tourism promotion, including the “Explore Uganda” campaign.
Among the ATMS enablers, the Ministry of Works and Transport received Shs 1.48trn for ongoing road projects, Uganda Airlines, Uganda Railways, Kalangala Infrastructure Services and the Standard Gauge Railway.
The Ministry of Energy and Mineral Development received Shs 337.1bln to support rural electrification, development of transmission lines and power-generation projects, among other activities.
Kampala Capital City Authority [KCCA] received Shs 223.8bln to fund education, health and roads, among other services.
The Ministry of Kampala Capital City and Metropolitan Affairs received Shs 67.9bln for roads, drainage and sanitation improvements under the Greater Kampala Metropolitan Area Urban Development Project.
The Ministry of Health received Shs 416.5bln for operational expenses, GAVI vaccines and the procurement of ambulances, while the National Medical Stores received Shs 284.7bln to purchase essential drugs and medicines.
The Uganda Cancer Institute and Uganda Heart Institute received Shs 165.5bln for the provision of oncology and cardiovascular health services, as well as the development of the nuclear medicine Positron Emission Tomography [PET] centre.
The National Council of Sports received Shs 260.5bln to fast-track preparations for the 2027 Africa Cup of Nations [AFCON 2027], which will be jointly hosted by Uganda, Kenya and Tanzania.
Local governments received a total of Shs 457.4bln in conditional and unconditional grants, of which Shs 292bln will go towards capital development.
Ocailap also urged households to adjust their expenditure in response to higher transport costs, including reducing unnecessary journeys and using public transport where it is more affordable.
ACODE calls for coordinated interventions
Commenting on the budget releases, Dr Arthur Bainomugisha, Executive Director of the Advocates Coalition for Development and Environment [ACODE], called for coordinated government interventions to strengthen economic resilience, particularly through climate-smart agriculture, water management and environmental restoration.
Bainomugisha said government intervention was necessary to manage the economic pressures but cautioned that some measures could also have implications for private-sector investment.
He said higher interest rates could make borrowing more expensive for businesses, potentially limiting investment and production at a time when the private sector is expected to drive economic growth.
“If they don’t borrow and invest and produce, then it has to be balanced,” he said, emphasising the need to balance economic intervention with conditions that allow businesses to expand and increase production.
On agriculture, Bainomugisha welcomed investments in solar-powered irrigation and large-scale water storage but stressed that the interventions must be coordinated among government institutions responsible for water, environment and energy.
He said agriculture remains a major driver of Uganda’s economy and called for consistent communication among ministries to ensure farmers receive clear information about government programmes.
Bainomugisha also urged the government to invest in restoring degraded ecosystems and water sources, arguing that environmental protection should complement infrastructure investments aimed at improving access to water.
Uganda’s national budget for the 2026/2027 financial year is approximately Shs 84.3trn. For the first quarter [July, August and September] of FY 2026/2027, government released Shs 23.03trn in expenditure limits.
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