Kampala, Uganda – With the reading of the Fiscal Year 2025/2026 National Budget set for today, Uganda’s manufacturing sector is keenly watching to see how the government plans to address critical hurdles and enact policies that can genuinely enable business growth. The budget, themed “Full monetization of the Ugandan economy through commercial agriculture, industrialization, expanding and broadening services, digital transformation, and market access,” is seen as a pivotal opportunity to translate strategic goals into tangible support for the industry.

The stakes are high for manufacturers who, despite an optimistic national economic outlook with growth projected at over 6.5%, continue to navigate a challenging landscape marked by high interest rates, complex tax administration, and unreliable power supply. The sector’s perspective will be a key focus of public discourse, with a panel discussion featuring the Uganda Manufacturers Association’s (UMA) Policy and Advocacy Director, Mr. Deo Ssenyondwa, scheduled for this Friday, June 13th, on NTV Uganda to dissect the budget’s implications.

As manufacturers tune into the budget speech, their hopes and concerns are centered on several key areas that could define their competitiveness over the next fiscal year.

Key Budget Enablers Manufacturers Are Watching For:

1. A Fair and Predictable Tax Regime: Taxation remains the most significant area of concern. While the government aims to boost domestic revenue, manufacturers are looking for a tax framework that supports rather than stifles growth. Key proposals in the recently tabled tax amendment bills will be a major focus:

• Income Tax Exemption for New Businesses: A proposed three-year tax holiday for new citizen-owned businesses with an investment capital under UGX 500 million is a welcome move. However, UMA has been advocating for an extension to five years, arguing that most startups do not achieve profitability within the initial three years.
• VAT and Excise Duty Reforms: Manufacturers will be listening for details on VAT changes that level the playing field, such as the crackdown on importers who split consignments to avoid VAT. A significant proposed win is the introduction of a formal mechanism for remission of excise duty paid on damaged or expired goods, a long-standing advocacy point for the sector.

2. Access to Affordable, Long-Term Capital: The high cost of credit remains a primary barrier to expansion and investment in new technology. Manufacturers will be looking for budgetary commitments to enhance the capacity of development finance institutions like the Uganda Development Bank (UDB). Measures that can de-risk lending to the private sector and bring down commercial interest rates are considered essential for fueling industrial growth.

3. Investments in Core Infrastructure: The cost of doing business in Uganda is heavily influenced by the state of infrastructure. Reliable and affordable electricity is paramount, as power outages and high tariffs directly impact production costs and capacity utilization. Furthermore, continued budgetary allocation to improve transport logistics—including roads and rail—is critical for the efficient movement of raw materials and finished goods, both locally and to export markets.

4. Championing Local Content and Market Access: In line with the budget’s theme of “market access,” manufacturers are hopeful for strong policies that promote the Buy Uganda, Build Uganda (BUBU) initiative. The budget provides an opportunity to reinforce government procurement rules that prioritize locally manufactured goods, providing a vital and sustainable market for local industries.

As the Finance Minister lays out the nation’s economic plan, the manufacturing community will be analyzing the details beyond the headline figures. The real test of the FY 2025/2026 budget will be in its ability to foster an environment where businesses can innovate, scale, and compete. The subsequent reflections from industry leaders like Mr. Ssenyondwa will be crucial for the entire sector to navigate the opportunities and challenges of the year ahead.