CSBAG Calls On Government to Improve Fiscal Planning , Reduce Costly Project Delays

The Civil Society Budget Advocacy Group (CSBAG) has welcomed Uganda’s improved credit rating by S&P Global but cautioned that the positive outlook should not be mistaken for a clean bill of health.

The remarks were made by its Executive Director Mr Julius mukunda during a press conference held at the CSBAG offices in Ntinda, as part of the organisation’s efforts to unpack the policy issues shaping Uganda’s credit rating and the broader economic landscape.

S&P Global recently revised Uganda’s economic outlook from Stable to Positive, a move seen as a strong vote of confidence in the country’s resilience.

The agency cited Uganda’s steady 6.3% growth in the 2025 financial year, record foreign reserves of USD 5.4 billion, and ongoing progress in oil and gas projects as key drivers of this shift.

“This shows that Uganda has the potential to grow and attract investors,” said Julius Mukunda, the Executive Director of CSBAG. “But for citizens to truly feel this progress, government must ensure inclusive growth, affordable borrowing, and that public money delivers real value.”

Mukunda, however, warned that S&P’s assessment also highlighted serious risks that could derail the country’s progress.

These include high and costly domestic debt—now accounting for 50% of total public debt—persistent supplementary budgets totaling UGX 5.7 trillion in FY2024/25, and low revenue collection, which remains stuck at 14% of GDP.

“Domestic debt is expensive. For every UGX 100 collected in taxes, UGX 25 goes to interest payments alone,” Mukunda noted. “This crowds out private credit and essential services that directly affect citizens.”

He emphasized that reducing reliance on domestic borrowing is key to enhancing debt sustainability.

According to CSBAG’s estimates, lowering domestic interest rates by just one percentage point could save the country between UGX 300 and 400 billion annually.

Uganda’s GDP has jumped from UGX 183 trillion in 2023 to UGX 227.9 trillion (USD 62 billion) in 2025, driven largely by agriculture, construction, and manufacturing.

Inflation has eased to 3.4%, below the Bank of Uganda’s 5% target, while the shilling appreciated by 5.2% a sign of growing macroeconomic stability.

Mukunda further noted that Uganda’s oil and gas exports to North African markets marked a significant step in diversifying trade and deepening regional ties.

Despite the positive developments, CSBAG called on government to improve fiscal planning and reduce costly project delays that often result in penalties on unused borrowed funds.

“We borrow money to implement projects, but when delays happen, we pay fines and higher costs for money we haven’t even used,” Mukunda said.

He urged the government to focus on concessional loans, strengthen public investment management, and ensure that Uganda’s growing economy translates into better living standards for citizens.