WILFRED ARINDA: 2026: NRM Hunting the Poor

In the aftermath of the 2026 general elections, where President Yoweri Museveni and the National Resistance Movement (NRM) secured another term with a 71.65 per cent of the presidential vote, Ugandans might have expected some respite. After all, the electorate had once again “gifted” the ruling party the mandate to govern. Yet, barely months into the new term, the government has tabled a raft of tax proposals for the 2026/27 financial year that read less like a development blueprint and more like a calculated assault on the very poor who form the backbone of NRM’s rural and urban support base.

Coupled with aggressive enforcement of urban “clean-up” operations demolitions of unplanned structures and forced eviction of street vendors, and the newly tabled Protection of Sovereignty Bill, 2026, this year is shaping up to be a year of profound hardship for the ordinary mwananchi.

Let’s look at the numbers. The Ministry of Finance is pushing tax measures designed to raise an additional Shs4.8 trillion, with Shs2.3 trillion expected from new or increased levies. Among the most punitive are those hitting daily essentials and the informal economy. The Excise Duty (Amendment) Bill, 2026, proposes a flat Shs1,000 levy per 50-kilogram bag of cement and excise duties of Shs50 per litre or kilogram on locally manufactured paints (rising to Shs2,000 on imports). Fuel excise will jump by Shs200 per litre for both petrol and diesel. Stamp duty on land transfers is to be doubled from 1.5 per cent to 3 per cent. Traders are also staring at higher taxes on second-hand clothes (including a proposed 30 per cent environmental levy on imports), sugar, cooking oil and motorcycle registrations. These are not abstract figures. They strike directly at the informal sector that dominates Uganda’s labour market.

According to the Uganda Bureau of Statistics (UBOS) Labour Market Survey 2025, informal employment stands at 89.2 per cent nationally. This means nearly nine in every ten Ugandan workers operate without formal contracts, social security, or regulatory protections. In absolute terms, informal establishments employ about 7.35 million people, compared to just 2.37 million in the formal sector, out of a total employed population of around 11.8 million. Even when agriculture, forestry and fishing are excluded, informal employment remains stubbornly high at 87.6 per cent nationally, rising to 95.1 per cent among youth aged 15-24 years and 91.5 per cent for those aged 18-30 years.

Informal trade alone accounts for 53.1 per cent of employment within informal establishments, making it the single largest source of jobs outside agriculture. These statistics reveal an economy where low-productivity, unregulated activities, from street vending and boda riding to small-scale masonry and market trading, sustain the majority of households.The dominance of informality is not a minor feature; it is structural. Recent government reviews indicate that the informal sector now contributes 54.5 per cent of Uganda’s GDP (up from earlier targets aimed at reduction under NDP III), underscoring its central role in economic output while simultaneously explaining the persistently low tax-to-GDP ratio.

Vulnerable employment, self-employed or unpaid family labour, affects 52 per cent of workers, and multidimensional poverty afflicts 27 per cent of Ugandans, with deprivations most acute in rural areas and among those reliant on informal livelihoods. For these citizens, every extra Shs200 on fuel or Shs1,000 on cement is not a minor inconvenience; it is the difference between eating once or twice a day, or between repairing a leaking roof and sleeping under rain.

Higher costs on sugar, cooking oil, paints and second-hand clothes directly erode the thin margins of market women, carpenters and small traders who have no formal safety net.The pain does not end with taxes. In parallel, authorities are executing a nationwide crackdown on “unplanned” urban spaces. Kampala Capital City Authority (KCCA) began evicting street vendors from the Central Business District in February 2026, giving them days to relocate to formal markets or face demolition of their stalls. Similar operations are underway in Kabale, Moroto, Ntungamo and other municipalities, backed by a March 2026 directive from the Ministry of Local Government ordering the removal of illegal trading structures, kiosks and boda stages. The human cost is immediate and statistical. Street vending and small informal trade employ millions, particularly women and youth, in a country where over 90 per cent of young employed people work informally and where formal job creation has lagged far behind population growth.

Evicting vendors without viable, affordable alternatives does not formalise the economy; it destroys livelihoods overnight. The same poor households already reeling from higher transport and construction costs will now lose their only source of daily income. In a nation where the informal sector contributes over 54 per cent of GDP and where nearly 90 per cent of workers depend on it for survival, these policies risk pushing more citizens deeper into poverty rather than lifting them out. Youth unemployment stands at 17.9 per cent nationally (18 per cent for ages 15-24), with some sub-regions like Bukedi recording rates as high as 37 per cent, leaving young people with few options beyond informal hustles that are now under siege.

Adding to this burden is the recently tabled Protection of Sovereignty Bill, 2026, introduced in Parliament on April 15 by State Minister for Internal Affairs Gen David Muhoozi. The Bill seeks to regulate dealings with foreigners, requiring Cabinet approval for certain interactions involving foreign funding, influence or partnerships, with stiff penalties including fines up to Shs4 billion for companies and Shs2 billion or 20 years in prison for individuals. While framed as a shield for national sovereignty, its sweeping provisions risk choking the flow of foreign investment, remittances, tourism, and NGO support that indirectly sustain many poor Ugandans. Diaspora remittances, estimated at US$2.5 billion (about Shs9.3 trillion) in 2025, equivalent to roughly 3.8 per cent of GDP and delivered through over 16 million small transactions, serve as a critical lifeline for low-income households, funding food, school fees, healthcare and small businesses. Bureaucratic hurdles could disrupt these flows, hitting the very informal households that rely on them most. Tourism and NGO services, which support countless small vendors, guides and community programmes, may similarly contract, reducing income opportunities in the informal sector already battered by taxes and demolitions.

There is bitter irony here. The very voters who handed NRM another five years, largely the rural poor, informal traders and urban hustlers, are the first to feel the fiscal fist. The government argues these measures are necessary to close a widening fiscal deficit, service a public debt now exceeding Shs126 trillion, and fund infrastructure while protecting sovereignty. Yet when the burden falls heaviest on those least able to pay, when cement becomes dearer for the muzigo dweller, when a vendor’s kiosk is reduced to rubble, and when sovereignty measures threaten the modest external support that keeps many afloat, one cannot escape a conclusion that the fish eating its own.

If 2026 is to be remembered as anything other than the year the government turned decisively against its most vulnerable citizens, a fundamental rethink is urgent. Taxes must target the untaxed wealthy and genuine economic growth, not consumption by the struggling masses. Urban planning must include, not evict, the informal sector that keeps Uganda’s cities alive. And sovereignty protections must be calibrated to avoid collateral damage on the very citizens they claim to defend.

The writer is the LC 5 Male Youth Councillor for Rubanda District
wilfredarinda@gmail.com