Uganda plans to reduce its budget next year by 13 percent and finance three-quarters of the spending plan from tax revenue, State Minister for Finance Fred Omach said.
The East African nation, which is the continent’s biggest coffee exporter and is on the cusp of becoming an oil producer, will spend about 21 trillion shillings ($6.2 billion) in the fiscal year beginning July 1, Omach said in an interview in the Rwandan capital, Kigali.
“The budget is expected to be slightly over 21 trillion shillings,” he said. The 24 trillion-shillings spending planned for the current year was higher because of some “transformational activities” that were no longer necessary in the coming year, he said, without elaborating.
Donors would finance a quarter of the budget, up from 20 percent in the current fiscal year, Omach said.
Uganda plans to borrow $200 million from the Eastern and Southern African Trade and Development Bank this year to finance projects in the health sector, Omach said. Last year, lawmakers rejected the proposal to borrow from the lender, but the government will resubmit the request to parliament with better justification, he said.
The state will also consider raising dollar-denominated debt because borrowing costs on the domestic market are at about 25 percent, he said.