By Emmanuel Mihiingo Kaija
Kampala — Uganda’s 2026/27 national budget is shaping up to be one of the most significant in recent years, as oil revenues take centre stage in the country’s fiscal planning. Government estimates indicate that Uganda could earn more than UGX 2.2 trillion from oil in the coming financial year, with about UGX 1.4 trillion expected to be available for the national budget. This comes at a time when the economy is showing encouraging signs, including steady growth and manageable inflation.
The budget framework projects an overall economic growth rate of 10.4 percent, boosted largely by the start of commercial oil production and continued investment in priority sectors. Officials expect first oil production by July 2026, following progress on key projects such as Tilenga, Kingfisher, and the East African Crude Oil Pipeline (EACOP).
Oil revenues present an opportunity to expand spending on infrastructure, health, education, and industrialization. If managed well, they could create jobs and strengthen public services. But oil income is unpredictable. Global price fluctuations, changes in demand, and delays in production could affect government forecasts, making careful planning essential.
Fiscal experts warn that relying too heavily on oil could create risks. Traditional revenue sources are still under pressure, and without improved domestic revenue mobilisation, oil alone may not cover all planned expenditures. Analysts also emphasise the importance of transparent spending and strong governance to ensure that revenue benefits are shared widely.
The effects of oil projects are also being felt locally. Communities in the Albertine region have experienced changes to land use and livelihoods, and environmental concerns persist. Authorities report that nearly all affected landowners have received compensation, but environmental groups continue to highlight potential risks to ecosystems from oil activities.
Uganda has put in place rules to protect oil revenue, including a petroleum reserve fund to buffer against price swings. Experts say strict oversight, transparent reporting, and public engagement are critical to ensure the funds are used responsibly. Citizens, civil society, and lawmakers all play a role in holding authorities accountable.
The challenge for the 2026/27 budget is clear: Uganda must turn oil revenue into tangible development benefits without jeopardizing fiscal stability or ignoring local and environmental concerns. How the country manages this balance will determine whether oil becomes a driver of sustainable growth or a source of economic vulnerability.
References:
Business Focus. (2026, March 25). Uganda to earn over UGX 2.2 trillion in oil revenue in 2026/27 — Gov’t. https://businessfocus.co.ug/uganda-to-earn-over-ugx2-2-trillion-in-oil-revenue-in-2026-27-govt/
Ministry of Finance, Planning & Economic Development. (2026). National Budget Framework Paper FY 2026/27. https://budget.finance.go.ug/sites/default/files/National%20Budget%20docs/National%20Budget%20Framework%20Paper%20FY%202026-27.pdf
Soft Power News. (2026, March 26). URA allocated Shs877bn to boost revenue collection. https://softpower.ug/ura-allocated-shs877bn-to-boost-revenue-collection/
Climate Change News. (2026, March 26). Ugandan farmers use British court to try to stop oil pipeline. https://www.climatechangenews.com/2026/03/26/ugandan-farmers-use-british-court-to-try-to-stop-oil-pipeline/
Kampala Post. (2026, March 12). EACOP compensation nears completion as Uganda targets first oil in July. https://kampalapost.com/business/2026/03/12/eacop-compensation-nears-completion-as-uganda-targets-first-oil-in-july
Nnakayima, D. (2018). Impacts of upstream oil and gas activities on environment, well-being and tourism in the Albertine Region of Uganda: Local community perspectives (Master’s thesis). Makerere University.
ACODE. (2026). Budget transparency and oil revenue management in Uganda. https://www.acode-u.org
