Economists and budget analysts have warned that rising election-related spending is placing increasing pressure on Uganda’s public finances, potentially crowding out critical development priorities and driving up public borrowing.

Julius Mukunda, Executive Director of the Civil Society Budget Advocacy Group (CSBAG), said the surge in election-linked expenditures—often through large supplementary budget requests—comes at a time when the country is already grappling with financing gaps following the withdrawal of some external assistance.

“Uganda was recently assessed as being at low risk of debt distress. Over time, this shifted to moderate risk, and the concern now is that we are moving closer to a high-risk position. At that point, there is no buffer left,” Mukunda said.

He urged the Bank of Uganda to maintain a tight monetary policy to keep inflation within the five per cent target, noting that price stability will be critical as the country approaches an election year.

“Bank of Uganda should maintain a tight monetary policy to keep inflation within the five per cent target, which it has successfully done in 2025. This is essential as we draw closer to the election period,” he said.

Mukunda expressed cautious optimism that the newly introduced Public Investment Management system could help enforce more disciplined spending and reduce fiscal slippages during the politically sensitive period.

On economic growth, Mukunda noted that while Uganda’s economy continues to expand—partly supported by expectations around the oil and gas sector—the key challenge remains ensuring that ordinary citizens benefit meaningfully from that growth.

Uganda’s economy grew by 6.3 per cent in the 2024/2025 financial year, with government projecting growth of seven per cent this year. The International Monetary Fund, however, estimates growth at a more modest 6.4 per cent.

“As we recieve the FY2026/27 we continue to caution government to be deliberate in addressing common service delivery challenges . For example, most of our people die due to inadequate emergency medical care services in our hospitals and this is simply not because Government doesn’t have enough resources but where these resources are prioritized,” Mukunda said.

Economist and university lecturer Dr Fred Muhumuza cautioned against overreliance on optimism surrounding the oil sector, arguing that critical infrastructure such as the East African Crude Oil Pipeline (EACOP) is unlikely to be completed by 2026.

“To achieve real economic transformation, Uganda would need growth rates of at least 13 per cent,” Muhumuza said.

His major concern, however, is the rising public debt burden, which he said is consuming an increasing share of domestic revenues and limiting investment in productive and social sectors.

Muhumuza also challenged the position often advanced by government and the IMF that debt is only problematic when used for consumption rather than infrastructure. He argued that transparency alone is insufficient without stronger domestic revenue mobilisation and firm expenditure restraint.

While analysts broadly agree that Uganda’s economy remains stable, they warn that fiscal choices, rising debt, governance challenges and external shocks are increasingly testing the country’s economic resilience as the election cycle approaches.