Uganda’s Minister of Finance, Planning and Economic Development, Hon. Matia Kasaija, a few days ago unveiled the UGX 72.3 trillion National Budget for FY 2025/2026.
According to Anita Badagawa Mpora, a Ugandan energy expert with the Petroleum Authority of Uganda (PAU), the budget, themed “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access,” has significant implications for the energy sector.
Key Energy Sector Allocations
Badagawa notes that the budget allocates substantial funds to the energy sector, including:
Mineral-Based Industrial Development (Including Oil and Gas):
Badagawa noted that a sum of Shs875.8 billion has been earmarked for mineral and petroleum development.
The key projects to fund include the completion of the oil pipeline, issuance of new oil exploration licenses, and construction of the 60,000-barrel-per-day oil refinery.
Electricity Access and Infrastructure Development:
She highlights that a significant amount of Shs1.04 trillion has been allocated for power infrastructure, including additional investment in the Uganda Electricity Distribution Company Limited (UEDCL) to improve reliability and affordability of electricity distribution.
The money will also be used for scaling up access through the Electricity Access Scale-Up Project (EASP) and new hydropower plant developments.
Impact on Ugandans
The budget allocations, according to Badagawa, are expected to have a positive impact on Ugandans and their standards of living, including:
Expanded Electricity Access
More households, especially in rural areas, will gain access to reliable power, improving healthcare, education, and household livelihoods.
Job Creation
Infrastructure development in oil, gas, and renewables will unlock opportunities across the construction, engineering, and maintenance sectors.
Industrial Boost
Enhanced supply to industrial parks can reduce operating costs and foster a more competitive local manufacturing ecosystem.
Environmental Wins
The emphasis on renewable energy and clean technologies supports Uganda’s sustainable development goals and reduces environmental degradation.
Oil and Gas Developments
Badagawa points out that the budget highlights significant developments in Uganda’s oil and gas sector, including:
First oil expected in 2026
The Tilenga and Kingfisher projects are on track, with projected revenue of USD 1-2.5 billion annually.
Local content
She notes that 84% of Tier 1 oil contracts are awarded to Ugandan firms, and over 17,000 direct and 39,567 indirect jobs have been created.
Kabalega International Airport
The airport is nearly complete, and because of the facility, the Uganda National Oil Company Limited (UNOC) is stabilising fuel prices and saving Shs282 billion annually.
Challenges and Opportunities
She contends, however, that while the budget presents opportunities for growth and development, there are also challenges to watch, including:
Debt Pressure
With over 35% of the budget allocated to debt servicing, funding for sectors like health and education remains constrained.
Equitable Access
Ensuring fair and inclusive access to energy, especially for marginalised communities, will require intentional policies and monitoring.
The 2025/2026 budget thus marks a pivotal shift in Uganda’s energy landscape, laying a strong foundation for future growth through infrastructure, industrialisation, and energy access.
With efficient execution, transparency, and citizen-centred planning, the budget allocations can drive sustainable development and improve the lives of Ugandans.