Government earmarks UGX 2.2 trillion for five-year local government plan

KAMPALA, Uganda — The government has unveiled an ambitious five-year strategic plan for the Ministry of Local Government, earmarking 2.2 trillion shillings to bolster decentralization and drive more citizens into the formal economy.

The plan, which runs from the 2025-26 through the 2029-30 fiscal years, aims to reduce the number of Ugandans living outside the “money economy” by 17% in the short term. According to Ministry Permanent Secretary Ben Kumumanya, approximately 30% of the population remains outside the cash economy, a figure the government hopes to slash through improved service delivery and local economic development.

“If everyone is in the money economy after five years, then the country will go to another level of service delivery,” Kumumanya said during the plan’s launch in Kampala on Friday.

The 2.2 trillion shilling budget is divided into four primary pillars:

1 trillion shillings for local economic development.

4 billion shillings for strengthening decentralization and local government systems.

8 billion shillings for institutional and policy coordination.

2 billion shillings for local government financing.

The ministry is targeting a significant increase in local revenue. Currently, local governments contribute an average of only 18% to their own budgets. The new plan aims to push that figure to 45% while increasing community satisfaction with local governance from 80% to 90%.

Despite the bold targets, the plan faces a substantial funding gap. The current national planning frameworks provide only 530.6 billion shillings, leaving a deficit of 1.7 trillion shillings. Kumumanya said the ministry would bridge this gap by courting development partners, including the World Bank and the African Development Bank, and pursuing public-private partnerships for infrastructure projects such as roads and waste management.

The strategic plan also builds on the successes of the Parish Development Model (PDM). Government data suggests the PDM has already helped reduce the percentage of households in subsistence farming from 39% to 34%. By the end of the 2024-25 financial year, the government had disbursed 2.7 trillion shillings to over 10,000 PDM savings and credit cooperatives nationwide.

Victoria Rusoke Businge, the state minister for local government, emphasized that the plan is more than “mere paperwork.”

“We are the engine of implementation in education, health, roads, and agriculture,” she said. “For our people to benefit, it matters a lot that technical staff are well appointed, funded, and supervised.”

However, local leaders expressed concerns over obstacles to revenue collection. Gerald Nsiro Kalunda, the Kiboga district chairperson, noted that sudden executive pronouncements abolishing certain taxes often undermine local collection efforts and leave departments without basic resources like transport.