MPs raise concerns as UDC takes 82 percent of Trade ministry budget
According to a report by parliament's Committee on Tourism, Trade and Industry presented during plenary on Wednesday, Deputy Chairperson Boniface Okot said that although the ministry’s budget has increased to Shs 514.96bln, only Shs 92.6bln will be shared among the remaining votes
KAMPALA, April 16, 2026 — Members of Parliament have raised concern after learning that a single entity is set to receive the lion’s share of funding under the Ministry of Trade, Industry and Cooperatives [MTIC].
The ministry’s proposed budget for financial year [FY] 2026/27 allocates Shs 422.35 billion, equivalent to 82 per cent, to the Uganda Development Corporation [UDC], leaving other key units significantly underfunded.
According to a report by parliament’s Committee on Tourism, Trade and Industry presented during plenary on Wednesday, Deputy Chairperson Boniface Okot said that although the ministry’s budget has increased to Shs 514.96bln, only Shs 92.6bln will be shared among the remaining votes.
“The committee notes that the increase in the ministry budget is largely driven by the capitalisation of UDC, which takes the largest share of the allocation,” Okot told the House during a sitting chaired by Speaker Anita Annet Among.
He warned that such concentration of resources risks weakening the broader trade and industrial ecosystem, as institutions responsible for standards, research, export promotion and enterprise development are left operating under tight financial constraints.
The committee report indicates that the remaining Shs 92.6bln will fund the ministry headquarters, the Uganda National Bureau of Standards [UNBS], the Uganda Industrial Research Institute [UIRI], the Uganda Free Zones and Export Promotion Authority [UFZEPA], and other sector interventions, including support to cooperatives and local governments.
“This level of concentration in one vote may limit the effectiveness of other institutions that are essential for trade growth and industrialisation,” Okot said.
The imbalance is already evident in critical gaps across the sector.
Parliament heard that despite the government’s push for industrialisation, UIRI, mandated to support innovation and value addition, is operating below capacity. The committee found that UIRI’s flagship facility in Namanve remains underutilised due to a lack of key machinery worth about Shs 6.2bln, limiting its ability to support industries with technology development and product testing.
Lawmakers said this reflects a contradiction in policy implementation, where substantial resources are channelled into industrial investments through UDC, while a key institution required to sustain industrial growth remains underfunded.
Meanwhile, UNBS continues to face funding shortfalls that constrain enforcement of standards and public awareness on certified products. UFZEPA has also come under scrutiny over rising operational costs, including a sharp increase in legal expenses.
At the policy level, the ministry headquarters is operating with limited resources despite its central role in coordinating trade, cooperatives and industrial development programmes.
Beyond the trade docket, Parliament also highlighted imbalances across the wider tourism, trade and industry sector.
The committee noted that the Tourism Development Programme is projected to receive only about 71 per cent of its planned allocation under the National Development Plan, raising concerns about Uganda’s ability to fully harness tourism as a source of foreign exchange and employment.
Similarly, allocations to local governments for trade and tourism development were found to be inadequate and unevenly distributed, with some districts receiving minimal funding that lawmakers said is unlikely to deliver meaningful impact.
The committee also pointed to persistent systemic challenges affecting the sector, including low absorption of funds due to procurement delays, weak planning, and compliance gaps such as delayed submission of gender and equity certificates. It further noted limited follow-up on previous recommendations, particularly those arising from the Auditor General’s reports.
While acknowledging the importance of capitalising UDC to drive industrialisation, the committee cautioned that this approach must be matched with balanced investment across the entire value chain.
Speaker Anita Annet Among questioned whether UDC should instead have its own vote rather than operate under a subvention.
“UDC should be able to take charge, not just be instructed, and give its own position on institutions to be funded,” she said.
In response, Okot agreed, noting that although UDC holds significant investments, returns remain low.
The report, which now moves to the Budget Committee, is expected to guide debate as Parliament considers approval of the national budget for the 2026/27 financial year.
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