KAMPALA, UGANDA — Uganda is under growing financial pressure as foreign aid from development partners continues to decline, raising urgent concerns about the government’s ability to sustain essential services and development projects without external support.
Recent data from the Global Partnership for Effective Development Co-operation reveals that only 31 percent of development aid to Uganda was channeled through public financial systems in 2023 down sharply from 58 percent in 2018. Similarly, the share of on-budget aid has fallen from nearly 50 percent to just over 40 percent in the same period. This shift has severely affected the operations of key ministries and agencies, with delays and cancellations of projects in healthcare, education, rural electrification, and water access becoming increasingly common.
Analysts say this is not just a result of global funding constraints, but a deeper reflection of eroding trust in Uganda’s fiscal governance. Concerns over corruption, rising public expenditure, and a lack of coordination between government and donors have caused many development partners to bypass official channels, preferring to work through NGOs or private sector actors. “Uganda is increasingly seen as a high-risk environment for aid,” said one economic analyst. “Without strong accountability and transparency, donors will continue shifting their support elsewhere.”
This decline in aid comes at a time when the country is already grappling with rising debt obligations and budgetary pressures. The proposed Shs72.4 trillion national budget for 2025/26 includes Shs19.2 trillion over one-third allocated to debt servicing. With limited revenue generation and reduced external support, domestic resources are being stretched thin. Medical interns are still waiting for unpaid allowances, schools in rural areas lack basic supplies, and infrastructure projects under the Parish Development Model remain underfunded.
Civil society organizations and policy experts are urging the government to act swiftly to rebuild confidence among donors. Proposed measures include improving public financial oversight, strengthening collaboration with development partners, increasing transparency in procurement, and aligning spending with national development goals. “If the government wants to attract donor funding back into the budget, it must show that every shilling is accounted for,” said Julius Mukunda, Executive Director of the Civil Society Budget Advocacy Group.
As Uganda moves forward, the challenge will be balancing the demands of debt management, service delivery, and development without the level of donor support it once relied on. Without bold reforms and greater fiscal discipline, the country risks slipping deeper into economic strain jeopardizing not only its development trajectory but also the livelihoods of millions of its citizens.