This budget is designed to support the implementation of Uganda's «Tenfold Growth Strategy» through investments in agriculture, tourism, mineral processing, oil and gas, science, technology, innovation and related infrastructure. The opportunities offered by such strategic investments, oil production, and access to AfCFTA markets can enhance productivity, competitiveness, and export diversification. However, in order to effectively exploit this potential, significant investments and access to affordable medium- and long-term financing will be required.
According to the Uganda Banking Association (UBA), in order to implement the ATM strategy (agriculture, tourism, minerals, oil and gas, science, Technology and Innovation) and achieve a «Tenfold Growth Strategy», private sector lending should grow from 28.6 trillion shillings in 2025 to 490 trillion shillings by 2040, and Capital markets will have to mobilize an additional 440 trillion shillings during the implementation period of the plan. These funds will be directed not only to priority areas, but also to supporting industries, including transport, energy, telecommunications, manufacturing, real estate, and services.
Over the past 20 years, Uganda has consistently invested in basic development conditions. The country increased access to electricity for more than 58% of the population in fiscal year 2023/24, expanded its paved road network to more than 6,199 km by 2025, improved digital connectivity — Internet penetration rose to 53% in 2022 from 1.8% in 2010 — and invested in education and healthcare, which This led to an increase in life expectancy to 68.2 years in fiscal year 2023/24 from 50.4 years in fiscal year 2010/11, according to the latest reports from the National Planning Administration and the Ministry of Finance, Planning and Economic Development.
Although these successes have increased production capacity and competitive advantages, infrastructure alone is not enough to ensure an economic turnaround. A true transformation will happen only when businesses begin to invest strategically, introduce technology, expand production, create added value for raw materials, enter domestic, regional and international markets, and create productive jobs.
At the center of this transformation process is a key element: financing development. According to the latest data from the Bank of Uganda, personal and consumer loans account for 25.6 percent of total private sector lending, while construction, mortgages and real estate transactions account for 18.6%. For comparison, the manufacturing industry accounts for 12.5%, agriculture — 11.4%, and the mining industry — only 2%. This means that the manufacturing sectors, which play a central role in the structural restructuring of the economy, are still in dire need of greater access to affordable medium- and long-term capital.
Development finance plays a crucial role in solving this problem by providing businesses with affordable "patient" capital and advisory support, which stimulates productive investments in key sectors of the economy and benefits both small and medium-sized businesses (SMEs) and large companies with significant socio-economic impact. Through tools such as long-term loans, asset financing, project financing, trade finance, guarantees, and equity participation, development institutions enable companies to implement projects that cannot be adequately secured by traditional sources of financing.
Of particular importance is that the flexible terms and extended repayment periods offered by development institutions give businesses enough time to generate cash flow, expand operations, increase competitiveness, and achieve long-term sustainability. In addition, in addition to providing funds, such institutions provide consulting services, contributing to more professional management of enterprises and reducing the risk of default on funded projects.
International experience shows that many States relied on national development banks as a mechanism for providing this type of financing and, as a result, successfully changed the structure of their economies. Germany's KfW supported the post-war reconstruction and modernization of industry, Brazil's BNDES financed infrastructure and industry expansion, East Asian development banks promoted export-oriented industrialization, and the Development Bank of South Africa still finances strategic infrastructure and regional integration projects.
This experience confirms: Countries that have managed to achieve an industrial breakthrough have created institutions capable of mobilizing and channeling affordable long-term financing into productive investments. In Uganda, priority areas under the «Tenfold Growth Strategy», including agriculture, tourism, mineral resource development, as well as science, technology and innovation, are capital-intensive and require strong support from development institutions.
Aware of this challenge, the Government continues to capitalize and revitalize institutions that support productive investment and structural transformation. In total, it has sent 1.96 trillion shillings to the Uganda Development Bank (UDB) to provide «patient» capital to strategic sectors that are key to industrialization and value creation. It is noteworthy that UDB has funded more than 100,000 recipients directly or through other innovative financial mechanisms.
Thus, further strengthening of UDB's capital base is important not only because it increases access to affordable medium- and long-term financing, but also because it increases the country's ability to support strategic investments in industries critical to industrialization, export growth, and job creation.
Ultimately, achieving tenfold growth will require more than infrastructure and macroeconomic stability. Uganda must mobilize long-term capital, deepen capital markets, strengthen development finance institutions, expand mixed and concessional financing, and increase private investment. Consequently, development finance is not just an auxiliary mechanism, but one of the key pillars on which the successful implementation of Uganda's «Tenfold Growth Strategy» depends.
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