Economic and Political Overview

flag Uganda Uganda: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Uganda is the third-largest economy in East Africa, after Kenya and Tanzania. The country has achieved astonishing economic performances in the last decades and, although slower, growth remains sustained. Between 1992 and 2010, the country experienced average economic growth of 8%, GDP per capita tripled and the poverty rate was cut in half. The Ugandan economy has shown resilience overcoming recent successive challenges, leading to a growth in GDP to 5.3% during FY23, compared to 4.7% in the preceding year (World Bank). Private consumption witnessed growth, but public investment was reduced due to limited fiscal space, and private investment retreated in response to a stringent monetary policy stance throughout the fiscal year. Uganda's economic growth is projected to surpass 6% annually in the medium term as the Bank of Uganda (BOU) implements monetary policy relaxation. Further growth will be driven by the resurgence of tourism, alongside government initiatives to diversify exports and promote agro-industrialization, as well as investments in supporting crude oil exports. However, significant downward risks persist due to disruptions in global financial conditions and increasingly erratic weather patterns.

Benefiting from the government's endeavors towards fiscal consolidation, the fiscal deficit decreased in FY2023. The total deficit, encompassing grants, reduced from 7.4% of GDP in FY2022 to 5.6% in FY2023. This consolidation was primarily propelled by decreased development spending. Fiscal revenue remained broadly unchanged at 14% of GDP, below the target specified in the Domestic Revenue Mobilization Strategy (DRMS). Through fiscal consolidation efforts, the deficit is projected to decrease to approximately 3.4% of GDP in FY2024. In FY2023, the current account deficit stood at 7.9% of GDP, remaining largely stable compared to FY2022. Despite the recovery in goods exports, tourism, and remittances, the deficit was offset by a significant increase in imports (data World Bank). The country’s debt-to-GDP ratio was estimated at 48.3% in 2023 by the IMF, with a minor decline expected over the forecast horizon (to 46.3% by 2025). Following its peak at 10.7% in October 2022, inflation steadily decreased, falling below the Bank of Uganda's (BOU) target of 5% by June 2023. This decline was attributed to lower international commodity prices, fiscal consolidation efforts, and tight monetary policy. Annual headline and core inflation rates stood at 3.5% and 3.3%, respectively. With the consistent trend of low inflation and reduced inflation expectations, the BOU reduced its policy rate to 9.5% in August 2023, down from the 10% level maintained for 10 consecutive months.

Uganda has surpassed the Millennium Development Goal (MDG) of halving poverty by 2015, but the poverty rate has recently increased, also due to the effects of the pandemic. According to the World Bank, enhanced growth has the potential to decrease poverty (assessed at the USD 2.15/day international poverty threshold) from 41.7% in 2023 to 40.7% by 2025. However, the rate of poverty alleviation will hinge on the evolution of food access and affordability, as well as the occurrence of weather-related and environmental shocks, given households' constrained adaptive capabilities. Data from the World Bank shows that unemployment was estimated at 2.9% in 2022; nevertheless, the share of people active in the informal market is still high.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 48.2452.3957.9063.7569.48
GDP (Constant Prices, Annual % Change) 6.44.65.77.56.8
GDP per Capita (USD) 1,1031,1631,2481,3341,405
General Government Gross Debt (in % of GDP) 48.448.347.746.344.5
Inflation Rate (%) n/a5.84.75.05.0
Current Account (billions USD) -3.97-3.71-4.75-6.57-6.36
Current Account (in % of GDP) -8.2-7.1-8.2-10.3-9.1

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Uganda has considerable natural resources, including fertile soils, regular rainfall, significant reserves of recoverable oil, and small deposits of copper, gold, cobalt, limestone, and other minerals. Agriculture is one of the most important sectors of the economy, employing 66% of the workforce and accounting for 24% of the GDP. As per the Food and Agriculture Organization of the United Nations, Uganda possesses fertile agricultural land with the capacity to sustainably feed 200 million people. Despite 80% of Uganda's land being arable, only 35% is presently under cultivation. Uganda boasts a diverse range of agricultural products, including coffee, tea, sugar, livestock, fish, edible oils, cotton, tobacco, plantains, corn, beans, cassava, sweet potatoes, millet, sorghum, and groundnuts. However, the full commercial potential of the sector is hindered by farmers' limited access to fertilizer and high-quality seeds, as well as a lack of irrigation infrastructure, leaving production susceptible to adverse weather conditions and pest outbreaks.

The country’s industrial sector is small and is dependent on imported inputs such as refined oil and heavy equipment. A number of supply-side constraints, including insufficient infrastructure, lack of modern technology, and corruption, hamper productivity. The sector contributes to 26.8% of GDP but employs only 7% of the workforce. The most important sectors are the processing of agricultural products, the manufacture of light consumer goods and textiles, and the production of beverages, electricity, and cement. Most industries are small, local firms with limited manufacturing added value, while the larger industries in the country are predominantly foreign-owned. The manufacturing sector as a whole accounts for 16% of GDP (World Bank).

The services sector in Uganda represents 41.7% of GDP and employs 26% of the active population; however, it is detached from primary sectors like agriculture and manufacturing, thus lacking the ability to spur economic growth. The ICT sector is one of Uganda’s fastest-growing sectors, recording double-digit growth over the last few years, largely driven by the telecommunications sector. Concerning the tourism sector, available data indicates that, for the first time since the COVID-19 pandemic began, international tourist arrivals surpassed the one million mark in 2023, compared to 814,508 in 2022 and 473,085 in 2021. This surge in arrivals has led to a record-breaking revenue for the tourism sector, reaching UGX 105 billion in the 12 months leading up to June 2023.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 62.9 9.5 27.6
Value Added (in % of GDP) 24.1 26.8 41.6
Value Added (Annual % Change) 4.4 5.1 4.1

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Uganda Shilling (UGX) - Average Annual Exchange Rate For 1 MUR 96.23104.73109.83105.2694.42

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
58,6/100
World Rank:
106
Regional Rank:
14

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

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Foreign Trade in Figures

Uganda is open to foreign trade, which accounts for 35% of its GDP (World Bank). The country is a member of numerous international organizations, such as the WTO, COMESA, EAC (East African Community), ESAAMLG (anti-money laundering group in Eastern and Southern Africa), and IGAD (Intergovernmental Authority for the Development of the Horn of Africa States). Uganda mainly exports coffee (24.0%), fish and fish products (4.1%), beans and other legumes (3.8%), sugar and sugar confectionery (3.8%), iron and steel (3.4%), animal/vegetable fats & oils (3.3%); whereas imports are led by petroleum (17.9%), medicaments (7.3%), road vehicles (7.2%), iron and steel (6.6%), cereals (5.2%), and plastics (5.2% - data Uganda Bureau of Statistics).

According to the latest figures available by the Uganda Bureau of Statistics, in 2022, China (19.4%), India (13.2%), the United Arab Emirates (11.8%), Kenya (8.7%), Saudi Arabia (4.9%), Japan (4.6%), and Tanzania (4.2%) were the main import partners; whereas exports were mostly directed towards Kenya (16.9%), South Sudan (16.6%), D.R. Congo (15.7%), Italy (6.6%), Tanzania (4.3%), and Germany (4.3%). The country's trade policy aims to encourage cooperation and integration in East Africa to stimulate production and increase export earnings. Tariffs are not very high and the country has few non-tariff barriers to trade. However, corruption and underdeveloped infrastructure remain major obstacles to trade. The political situation in South Sudan, one of the country's main trading partners with Kenya, continues to affect trade flows.

Uganda's trade balance is structurally in deficit. In 2022, exports of goods decreased to USD 3.9 billion (from 4.1 one year earlier), while imports reached USD 9.3 billion (+6.5% y-o-y). As for services, exports totaled USD 1.7 billion, while imports amounted to USD 3.2 billion. The overall trade balance was estimated to be in deficit by 10.5% of GDP by the World Bank (compared to 10.2% one year earlier). According to preliminary data by UBS, in the first nine months of 2023, Uganda’s exports totaled USD 5 billion, whereas imports stood at USD 8.8 billion.

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 6,7297,6968,2518,7939,366
Exports of Goods (million USD) 3,0873,5644,1494,1793,973
Imports of Services (million USD) 2,6352,9453,0993,1643,232
Exports of Services (million USD) 2,2932,0761,1011,6831,781
Imports of Goods and Services (Annual % Change) 8.47.10.418.9-8.0
Exports of Goods and Services (Annual % Change) 9.44.3-1.20.2-19.8
Imports of Goods and Services (in % of GDP) 21.622.321.625.922.5
Exports of Goods and Services (in % of GDP) 15.117.115.415.812.0
Trade Balance (million USD) -2,453-2,755-2,637-3,046n/a
Trade Balance (Including Service) (million USD) -2,795-3,623-4,635-4,527n/a
Foreign Trade (in % of GDP) 36.639.437.041.734.5

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2021
United Arab Emirates 26.8%
Kenya 13.3%
South Sudan 12.2%
Democratic Republic of Congo 8.6%
Italy 5.3%
See More Countries 33.9%
Main Suppliers
(% of Imports)
2021
China 18.2%
India 11.6%
Tanzania 9.0%
United Arab Emirates 8.9%
Kenya 8.5%
See More Countries 43.8%

Source: Comtrade, Latest Available Data

 
 

Main Products

4.0 bn USD of products exported in 2021
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 26.0%
Coffee, whether or not roasted or decaffeinated;...Coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee in any proportion 18.1%
Cocoa beans, whole or broken, raw or roastedCocoa beans, whole or broken, raw or roasted 2.7%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 2.5%
Dried leguminous vegetables, shelled, whether or...Dried leguminous vegetables, shelled, whether or not skinned or split 2.5%
See More Products 48.2%
9.1 bn USD of products imported in 2021
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 13.6%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 12.0%
Palm oil and its fractions, whether or not refined...Palm oil and its fractions, whether or not refined (excl. chemically modified) 4.0%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.2%
RiceRice 2.5%
See More Products 64.7%

Source: Comtrade, Latest Available Data

 
 

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Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Official list of ministries
Ministry of Finance, Planning and Economic Development
Ministry of Agriculture, Animal Industry and Fisheries
Ministry of Energy and Mineral Development
Ministry of Commerce, Industry and Cooperatives
Ministry of Water and the Environment
Ministry of Tourism, Wildlife and Antiquities
Statistical Office
Uganda Bureau of Statistics – UBOS
Central Bank
Bank of Uganda
Stock Exchange
Uganda Securities Exchange (USE)
Search Engines
Google Uganda
Uganda Business Directory
Data.ug
Economic Portals
Financial Times
Uganda Business News

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Political Outline

Current Political Leaders
President - Gen. Yoweri Kaguta Museveni (since 29 January 1986)
Vice President - Jessica Alupo (since 21 June 2021)
Prime Minister - Robinah Nabbanja (since 21 June 2021)
Next Election Dates
Presidential: 2026
Legislative: 2026
Main Political Parties
In 2005, Ugandans held a referendum and voted for a return to multi-party politics. Before that, only one political organisation, the National Resistance Movement, was allowed to operate in the country.
However, the National Resistance Movement (also known simply as the Movement) is still the ruling political party in Uganda. The party was originally founded as a liberation movement to oppose dictatorial regimes. In the 2021 general election, the Movement obtained 336 out of 529 seats.
Other major parties include the National Unity Platform (the main opposition party, with 57 seats in the Parliament), the Forum for Democratic Change (opposition party, 32 seats); the Democratic Party (moderate conservative, with 9 seats in the Parliament) and the Uganda People's Congress (which also holds 9 seats in the Parliament).

Other minor parties in the country are: Justice Forum (JEEMA), People's Progressive Party (PPP), and Alliance for National Transformation (ANT).

Type of State
Democratic Republic influenced by the country's army.
Executive Power
The Ugandan President holds executive power; he assumes the functions of head of state, head of government, and commander-in-chief of the armed forces. The President is responsible for the appointment of Cabinet, as well as the implementation and enforcement of laws drafted by Parliament. The president is elected for a five-year term, with the possibility of reelection without any term limits.
Legislative Power
According to the 1995 Constitution, the legislative power is vested in both the government and the National Assembly. The term of the unicameral Parliament is seven years from the date of its first sitting after a general election. Currently, the Ugandan Parliament is composed of 529 representatives: 353 of those seats are filled using first-past-the-post voting in single winner constituencies, 146 are reserved for women, and the remaining 30 seats are indirectly filled via special electoral colleges: 10 by the Uganda People's Defence Forces, 5 by the youth, 5 by the elderly, 5 by people with disabilities, and 5 by workers unions. In each of these groups, at least one woman must be elected (except for the Defence Force group, which must have at least two women).
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
125/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
6/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Uganda, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: April 2024