Uganda has announced plans to cut external budget support by 84% in the next financial year, marking a major shift in how the government finances its spending. The move reflects a growing focus on reducing reliance on donor funding and strengthening domestic revenue collection amid changing global aid priorities.
Finance officials said the reduction is part of broader fiscal reforms aimed at boosting tax revenues, improving public financial management, and increasing self-sufficiency. Uganda has been expanding efforts to widen its tax base, curb inefficiencies, and prioritize spending on key sectors such as infrastructure, health, and education.
While the government says the transition will enhance economic resilience and policy independence, analysts warn that the sharp cut could put pressure on public services if domestic revenues fall short. The success of the strategy will largely depend on effective tax administration, economic growth, and the ability to attract alternative financing to sustain development programs.