Kampala, Uganda | URN | The weakening of the Uganda shilling against the US dollar is threatening Kiruddu National Referral Hospital’s ability to procure essential medical equipment, as suppliers revise quotations upwards, creating funding gaps and forcing the facility to reconsider projects already included in its approved budget.
The hospital says exchange-rate fluctuations have increased the cost of equipment beyond the amounts allocated in its budget, raising concerns that some planned outputs for the 2026/2027 financial year may not be achieved.
Dr Charles Kabugo, the hospital director and accounting officer, told Parliament early this week that management is struggling to implement a budget prepared during the previous financial year, before the recent depreciation of the shilling.
Kabugo cited the planned procurement of two endoscopes from India, for which the hospital had allocated 40 million Shillings following a market survey. However, when management approached suppliers to conclude the procurement process, some withdrew their earlier quotations and demanded significantly higher prices.
The hospital is also facing a funding shortfall in the procurement of a vitrectomy machine used in eye surgery. Kabugo said the equipment had initially been estimated to cost 60 million Shillings, but the supplier has since raised the price to 75 million Shillings, leaving the hospital with a 15 million Shillings deficit.
The challenges emerged during an engagement between the hospital management and the Public Accounts Committee (PAC-Central), where Tororo South MP Fredrick Angura questioned the implications of the weakening shilling on the hospital’s operations, particularly the rising cost of supplies and the ability of contractors to honour procurement commitments.
Angura expressed concern over suppliers who revise prices after entering into contractual arrangements with government institutions, arguing that signed contracts should provide safeguards against financial risks arising from market fluctuations.
The procurement challenges at Kiruddu Hospital reflect the broader economic consequences of the shilling’s depreciation, which has increased the cost of imported fuel, machinery, industrial inputs, pharmaceuticals and other essential commodities.
According to the Ministry of Finance’s September 2026 Performance of the Economy report, the shilling depreciated by 3.7 per cent against the US dollar during the month, trading at an average mid-rate of Shillings 3,868.87 per dollar, compared to Shillings 3,730.25 in August.
The Ministry attributed the depreciation to rising global oil prices, increased demand for foreign currency by importers, stronger US Treasury yields and reduced foreign-exchange earnings from some agricultural exports and tourism.
The pressure on the currency persisted into October, when the shilling traded above Shillings 4,200 against the dollar at some point, despite interventions by the Bank of Uganda to moderate volatility in the foreign-exchange market.
The depreciation has also prompted the Bank of Uganda to tighten monetary policy in an effort to contain inflation and stabilise the currency.
On October 14, 2026, the Central Bank raised its benchmark Central Bank Rate from 9.75 per cent to 12 per cent, citing mounting pressure from the weakening shilling, rising fuel prices and external economic shocks.
