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

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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. In 2021, however, the economy grew 4.7%, and it is expected to continue growing in 2022 and 2023, at an estimated rate of 5.1% and 6.6%, respectively. Public investment was a key driver of growth in 2021. In 2022, growth expected to be more dynamic mainly thanks to household consumption.

In 2021, the country's current account deficit widened to USD 3.85, as the increase in export revenues linked to the recovery in activity following the initial shock of the pandemic was offset by imports of capital goods, especially those needed for the country's hydrocarbon projects. Public debt increased to 49.1%, mainly due to interest on domestic debt, which will continue to weigh on public finances in the coming years. Still, the debt-to-GDP ratio should remain stable in 2022 and 2023, at around 50.2% and 49.3%, respectively. Inflation slightly decrease to 2.2% in 2021, but it is expected to double in 2022, and reach 5% - a trend that should continue in 2023, when the inflation rate is expected to reach 6.2%. To mitigate the effect of the pandemic, the World Bank has provided the country with USD 300 million, which has been essential in Uganda's economic recovery following the crisis. In 2021, recovery has strengthened throughout the country, underpinned by improved business and trading conditions as COVID-19 restrictions eased.

Uganda has surpassed the Millennium Development Goal (MDG) of halving poverty by 2015, but the poverty rate has recently increased. According to the World Bank, one in five people lives in extreme poverty and about a third live on less than USD 1.90 / day . These rates have been heightened by the pandemic, and added to the 8.7 million people living below the poverty line in Uganda. The crisis effect has been worsened by heavy rains, flooding, and a locust invasion that has impacted agricultural production. In 2021, the unemployment rate in the country was at 2.3% (ILO Estimate). However, this figure does not reflect reality since a significant part of the population work in the informal sector.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 37.5242.9648.3552.4057.69
GDP (Constant Prices, Annual % Change) -1.46.74.45.96.0
GDP per Capita (USD) 9101111
General Government Gross Debt (in % of GDP) 46.351.852.251.351.0
Inflation Rate (%) 2.82.26.46.45.7
Current Account (billions USD) -3.55-3.58-3.88-5.36-6.54
Current Account (in % of GDP) -9.5-8.3-8.0-10.2-11.3

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 72.1% of the work force and accounting for 23.9% of the GDP. Following job losses and closure of small businesses brought on by the pandemic, many Ugandans turned to agriculture to manage and survive the crisis, which further strained natural resources that were already under pressure from Uganda's rapid population growth, urbanisation, and industrialisation.

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 26.4% of GDP, but employs only 6.5% 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. In 2021, the industry sector began to show signs of recovery following the decline in industrial activity brought on by the pandemic.

The services sector in Uganda represents 42.8% of GDP and employs 21.3% 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. In 2021, increased domestic demand boosted the services sector following the negative impacts that were felt throughout the sector during the initial phases of the pandemic.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 72.1 6.5 21.4
Value Added (in % of GDP) 24.0 26.2 43.0
Value Added (Annual % Change) 4.8 2.2 2.9

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
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.

 
 

Find out all the exchange rates daily on our service Currency Converter.

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

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Uganda is open to foreign trade, which accounts for 34.8% of its GDP (World Bank). The country is a member of numerous international organisations, 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). The country mainly exports gold (43.8%), coffee (12.4%), cocoa beans (2.4%), tea (1.9%), and petroleum oils (1.9%). Its main imports are gold (22.3%), petroleum oils (11.3¨%), medicaments (3.6%), palm oil (3.3%), and motor cars (2.2%).

Uganda's main trading partners are the United Arab Emirates, Kenya, China, India,Tanzania, South Sudan, the Democratic Republic of Congo, and Italy. 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. Besides, weak global growth, affected by trade tensions between the United States and China and stagnant growth in Europe, may negatively impact Ugandan exports. The wealth of natural resources, the improvement of national security, and the return of Indo-Ugandan entrepreneurs in exile are factors favouring foreign trade.

Uganda's trade balance is structurally in deficit. In 2020, exports of goods amounted to USD 4.14 billion, while imports reached USD 2.25 billion, resulting on a negative trade balance of USD 4.1 billion. As for services, exports reached USD 882 million, while imports amounted to USD 3 billion. Imports of goods and services should remain high in the coming years due to investment in major infrastructure projects, food needs, and economic growth, which have boosted demand for consumer goods.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 5,0995,5966,7297,5188,251
Exports of Goods (million USD) 2,5432,9013,0873,4774,149
Imports of Services (million USD) 2,2712,0482,5282,6533,004
Exports of Services (million USD) 1,6061,3751,6101,752882
Imports of Goods and Services (Annual % Change) -8.82.58.47.0-9.7
Exports of Goods and Services (Annual % Change) 2.934.29.34.33.3
Imports of Goods and Services (in % of GDP) 18.920.221.622.419.7
Exports of Goods and Services (in % of GDP) 12.516.715.117.215.0
Trade Balance (million USD) -1,597-1,714-2,458-2,757n/a
Trade Balance (Including Service) (million USD) -1,708-2,122-3,013-3,416n/a
Foreign Trade (in % of GDP) 31.336.836.739.634.8

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

 

Main Partner Countries

Main Customers
(% of Exports)
2020
United Arab Emirates 44.5%
Kenya 11.2%
South Sudan 8.6%
Democratic Republic of Congo 6.4%
Italy 3.3%
See More Countries 25.9%
Main Suppliers
(% of Imports)
2020
China 16.4%
India 11.6%
Kenya 9.4%
Tanzania 9.0%
United Arab Emirates 6.0%
See More Countries 47.6%

Source: Comtrade, Latest Available Data

 
 

Main Products

4.2 bn USD of products exported in 2020
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 43.8%
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 12.4%
Cocoa beans, whole or broken, raw or roastedCocoa beans, whole or broken, raw or roasted 2.4%
Tea, whether or not flavouredTea, whether or not flavoured 1.9%
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 1.9%
See More Products 37.6%
8.3 bn USD of products imported in 2020
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 22.3%
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 11.3%
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) 3.6%
Palm oil and its fractions, whether or not refined...Palm oil and its fractions, whether or not refined (excl. chemically modified) 3.3%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.2%
See More Products 57.3%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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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
General elections: 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: Alliance for National Transformation (ANT), Justice Forum (JEEMA), and People's Progressive Party (PPP).

Type of State
Democratic Republic influenced by country's army.
Executive Power
The Ugandan President holds executive power; he assumes the functions of head of state 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.
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: 499 of those seats are filled using first-past-the-post voting in single winner constituencies, out of which 146 are reserved for women. 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

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Uganda, please visit the Ministry of Health’s Coronavirus (Pandemic) COVID-19 website.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures
To find out about the latest public health situation in Uganda consult the Ministry of Health’s Coronavirus (Pandemic) COVID-19 website, especially Be Ready for COVID-19.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports), refer to Progress In Implementing the Standard Operating Procedures By The Trade Industry And Cooperatives Sector During The Coronavirus/COVID-19 Pandemic and Ban on Used Footwear and Used Textile Products –Uganda Bureau of Standards.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For information on the economic recovery scheme put in place by the Ugandan government to address the impact of the COVID19 pandemic on the Ugandan economy, refer to KPMG Uganda’s report Government and institution measures in response to COVID-19.

For a general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Ugandan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Uganda in the IMF’s Policy Tracker platform.
Support plan for businesses
For information on the local business support scheme established by the Ugandan government and other organizations to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity refer to KPMG Uganda’s report Government and institution measures in response to COVID-19.
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For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
There are no specific support plans for exporters in Uganda so far. For future possible up-to-date information please visit the website of the Uganda Trade Portal.
 

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Latest Update: November 2022