Uganda's Depreciating Shilling Threatens Kiruddu Hospital's Medical Equipment Procurement

The depreciating Uganda shilling is threatening Kiruddu National Referral Hospital's ability to procure essential medical equipment. Suppliers have revised their quotations upwards due to exchange-rate fluctuations, creating funding gaps and forcing the hospital to reconsider projects in its approved budget. Dr. Charles Kabugo, hospital director and accounting officer, stated that management is struggling to implement a budget prepared before the recent depreciation of the shilling.

The hospital had allocated 40 million Shillings for the procurement of two endoscopes from India. However, suppliers withdrew their earlier quotations and demanded significantly higher prices. A vitrectomy machine for eye surgery, initially estimated to cost 60 million Shillings, now costs 75 million Shillings, leaving a 15 million Shilling deficit. These challenges were discussed during an engagement between hospital management and the Public Accounts Committee.

Tororo South MP Fredrick Angura expressed concern over suppliers revising prices after entering into contractual arrangements with government institutions. He argued 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.

The Ministry of Finance's September 2026 Performance of the Economy report states that the shilling depreciated by 3.7 per cent against the US dollar during the month. The shilling traded at an average mid-rate of 3,868.87 per dollar, compared to 3,730.25 in August. The Ministry attributed the depreciation to rising global oil prices and increased demand for foreign currency.

The pressure on the currency persisted into October, with the shilling trading above 4,200 against the dollar at some point. The Bank of Uganda intervened to moderate volatility in the foreign-exchange market. The depreciation has also prompted the Bank of Uganda to tighten monetary policy 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. The bank cited mounting pressure from the weakening shilling, rising fuel prices, and external economic shocks. The hospital's struggles highlight the impact of economic fluctuations on healthcare services.

The hospital's management is working to address the funding gaps and ensure the procurement of essential medical equipment. The situation underscores the need for effective financial planning and risk management in the face of economic uncertainty.

Key points

• The depreciating shilling has increased the cost of medical equipment for Kiruddu Hospital.
• Suppliers have revised their quotations upwards, creating funding gaps.
• The Bank of Uganda has tightened monetary policy to contain inflation and stabilise the currency.