Members of Parliament have raised a red flag after learning that a single entity is lined up to take the lion’s share of funding to the Ministry of Trade, Industry and Cooperatives.
The sharp imbalance proposed in the fiscal year 2026/27 budget for the ministry would see the Uganda Development Corp. allocated 422.35 billion shillings, equivalent to 82% of the budget, leaving other critical institutions underfunded.
According to the report of the Committee on Tourism, Trade and Industry presented during plenary on Wednesday, Deputy Chairperson Boniface Okot said although the ministry’s budget has risen to 514.96 billion shillings, only 92.6 billion shillings would be available for other votes.
“The committee notes that the increase in the ministry budget is largely driven by the capitalisation of UDC, which takes the largest share of the allocation,” Okot told the House, in a session chaired by Speaker Anita Annet Among.
He warned that this concentration of resources risks weakening the broader trade and industrial ecosystem, as institutions responsible for standards, research, export promotion and enterprise development are left to operate within tight financial limits.
The committee report shows the remaining 92.6 billion shillings is expected to fund the ministry headquarters, the Uganda National Bureau of Standards, the Uganda Industrial Research Institute, the Uganda Free Zones and Export Promotion Authority, and other sector interventions including support for cooperatives and local governments.
“This level of concentration in one vote may limit the effectiveness of other institutions that are essential for trade growth and industrialisation,” Okot said.
The imbalance is already manifesting in critical gaps within the sector. Parliament heard that despite the government’s push for industrialisation, the Uganda Industrial Research Institute, mandated to support innovation and value addition, is operating below capacity.
The committee found that UIRI’s flagship facility in Namanve remains underutilised because of a lack of key machinery worth about 6.2 billion shillings, constraining its ability to support industries with technology development and product testing.
Lawmakers noted this presents a contradiction in policy implementation, where substantial resources are channeled into industrial investments through UDC while a key institution required to sustain industrial growth remains underfunded.
The Uganda National Bureau of Standards continues to face funding gaps that limit enforcement of standards and public awareness of certified products, while the free zones authority has come under scrutiny for rising operational costs, including a sharp increase in legal expenses.
At the policy level, the ministry headquarters is also operating with limited resources despite its central role in coordinating trade, cooperatives and industrial development programs.
Beyond the trade docket, Parliament highlighted imbalances across the wider tourism, trade and industry sector. The committee noted that the Tourism Development Program is projected to receive only about 71% of its planned allocation under the National Development Plan, raising concerns about the country’s ability to fully exploit tourism as a source of foreign exchange and employment.
Similarly, allocations to local governments for trade and tourism development were found to be both inadequate and unevenly distributed, with some districts receiving minimal funding that lawmakers said is unlikely to deliver meaningful impact.
The committee also pointed to persistent systemic challenges affecting the sector, including low absorption of funds because of procurement delays, weak planning, and gaps in compliance such as delayed submission of gender and equity certificates. It further noted limited follow-up on previous recommendations, particularly those arising from the auditor general’s reports.
Despite acknowledging the importance of capitalising UDC to drive industrialisation, the committee cautioned that the approach must be matched with balanced investment across the entire value chain.
Speaker Among questioned whether UDC should have its own vote instead of receiving a subvention. “UDC should be able to take charge, not just be instructed, and give their own opinion on the institution that is to be given money,” Among said.
Okot, who responded in the affirmative, said UDC has significant investments but with very low returns on investment.
The report, which now moves to the Budget Committee, is expected to guide debate as Parliament considers approval of the national budget for the 2026/27 financial year.
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