Uganda’s economy is on a firm upward trajectory, supported by stable inflation, robust private sector activity, and a stronger shilling, according to the latest economic update by the Minister of Finance, Planning and Economic Development, Hon. Matia Kasaija.
Speaking at a press briefing held at the Uganda Media Centre on Tuesday, Kasaija said the economy has remained resilient despite global, regional, and domestic shocks, registering stronger growth and improved investor confidence.
“Uganda’s economy has demonstrated resilience amidst the global, regional, and domestic shocks and is on an upward growth trajectory. We are steadily transforming our economy and setting the stage for sustainable double-digit growth in the coming years,” Kasaija said.
Strong GDP Performance and Growth Momentum
According to Kasaija, the size of Uganda’s economy expanded to Shs 226.3 trillion in FY2024/25, up from Shs 203.7 trillion in FY2023/24, equivalent to an increase from US$53.9 billion to US$61.3 billion. Real GDP growth stood at 6.3%, slightly higher than the 6.1% recorded the previous financial year, while GDP per capita rose from US$1,159 to US$1,263.
This growth, Kasaija noted, was driven by government interventions aimed at boosting household incomes and private sector activity, including the Parish Development Model (PDM), Uganda Development Bank (UDB) financing, the Emyooga programme, and the Agricultural Credit Facility.
“Our wealth creation initiatives continue to bring new growth momentum to the economy, we are prioritizing interventions that support farmers, small businesses, and entrepreneurs to create jobs and generate income,” Kasaija said.
Inflation Remains Under Control
Kasaija highlighted that inflationary pressures remain well-managed, with headline inflation easing to 3.8% in July 2025, down from 3.9% in June. The decline was largely attributed to lower food crop prices and reduced transportation costs following falling fuel prices.
To maintain stability, the Central Bank Rate (CBR) has been held at 9.75% for ten consecutive months, a policy stance aimed at balancing inflation control with economic growth.
“Our prudent fiscal and monetary policies have created a stable macroeconomic environment,” Kasaija said. “We are ensuring that inflation remains within the medium-term target of 5% while supporting investment and socio-economic transformation.”
Investor Confidence and Economic Activity on the Rise
Key economic indicators show growing business activity and renewed investor optimism. The Composite Index of Economic Activity (CIEA) rose from 179.14 in May 2025 to 181.03 in June 2025, reflecting increased output, rising demand, and higher employment across sectors such as agriculture, manufacturing, construction, and services.
Kasaija described the positive trend as a sign of strong private sector participation and growing business confidence.
“Investor confidence remains strong, driven by increased business orders and favorable demand conditions, we are seeing rising output and job creation across key sectors of the economy,” he said.
Shilling Gains Stability and International Recognition
Uganda’s currency has maintained competitiveness against the US dollar, appreciating by 0.5% in July 2025 to an average mid-rate of Shs 3,586 per US$, from Shs 3,606 in June. This performance, was supported by higher foreign exchange inflows from offshore investors, remittances, increased coffee export earnings, and global dollar movements, said the Finance Minister.
Significantly, the International Monetary Fund (IMF) has ranked the Ugandan shilling as the most stable currency in Africa, signaling growing international confidence in the country’s monetary and fiscal management.
Exports Diversify as Gold Overtakes Coffee
Over the past 15 years, Uganda’s economy has seen significant export diversification. Thirty-two new products have entered the export basket, including ceramic tiles, solid soybean residues, veneer sheets, and manufactured tobacco.
Coffee, once Uganda’s dominant export, now accounts for 20.9% of merchandise exports, down from 75.6% in 1995. Gold has emerged as the leading export commodity, contributing 39.3% of total export earnings in 2024, followed by cocoa beans (5.8%), base metals (2.1%), and sugar (1.9%).
In the twelve months ending June 2025, merchandise exports surged by 64.3% to US$1.15 billion, while imports grew by 50.7% to US$1.43 billion.
“The diversification of our export base is reshaping Uganda’s economic landscape,” Kasaija noted. “We are reducing over-reliance on traditional crops and positioning the country for higher-value exports.”
Tourism, FDI, and Remittances Drive Growth
Uganda’s tourism sector continues to recover strongly, generating US$1.52 billion in inflows in the twelve months to March 2025, up from US$1.36 billion in the same period the previous year. This growth is attributed to increased competitiveness, government investment in strategic infrastructure, and sustained peace and security.
Foreign Direct Investment (FDI) has also expanded, reaching US$3.30 billion in 2024 from US$2.99 billion in 2023, largely driven by developments in the oil and gas sector and Uganda’s improving investment climate.
Additionally, diaspora remittances remain a major source of foreign exchange, totaling US$1.4 billion in 2024, further strengthening household incomes and domestic demand.
Revenue Collection Surpasses Targets
Kasaija reported strong revenue performance in FY2024/25, with total collections reaching Shs 32.08 trillion against a target of Shs 31.98 trillion, resulting in a surplus of Shs 96.69 billion.
In July 2025, the first month of FY2025/26, revenues and grants amounted to Shs 2.54 trillion, exceeding the planned Shs 2.46 trillion, largely due to an unplanned grant inflow of Shs 168.21 billion.
“Our revenue mobilization efforts are yielding results. We are strengthening tax administration and improving compliance to ensure sustainable financing for our development agenda,” Kasaija said.
Improving Social Indicators and Poverty Reduction
Uganda’s economic gains are translating into improvements in living standards. According to the Human Development Report 2025, the country advanced from 159th to 157th position globally, with its Human Development Index (HDI) rising from 0.550 in 2022 to 0.582 in 2023.
Life expectancy has also increased from 63.7 years to 68.9 years, while the poverty rate has fallen from 20.3% in FY2019/20 to 16.1% in FY2023/24. Income inequality, measured by the Gini coefficient, improved from 0.413 to 0.382 over the same period.
Kasaija attributed these gains to government investment in wealth creation and social protection programmes targeting youth, women, the elderly, and persons with disabilities.
Tenfold Growth Strategy to Propel $500 Billion Economy
Looking ahead, the government projects GDP growth to accelerate to at least 7% in FY2025/26 and into double digits in the medium term, driven by the expected commencement of oil and gas production.
Over the next 15 years, Uganda plans to grow its economy to US$500 billion under the Tenfold Growth Strategy, a long-term plan designed to accelerate inclusive and sustainable development.
The strategy focuses on four priority sectors that are expected to drive economic transformation: agro-industrialization, which aims to boost agricultural productivity and value addition; tourism development, to position Uganda as a top global destination; mineral-based industrialization, leveraging the country’s vast natural resources for export and industrial growth; and science, technology, and innovation, including ICT and the creative economy, to foster digital transformation and create new economic opportunities.
“Our Tenfold Growth Strategy will transform Uganda into a modern, competitive, and sustainable economy, we are laying the foundation to move from a US$61 billion economy today to a US$500 billion economy within the next fifteen years,” Kasaija said.
The Outlook
Kasaija emphasized that Uganda’s economic fundamentals remain strong and that government policies are geared towards inclusive and sustainable growth. He assured businesses, investors, and citizens that the country is well-positioned to capitalize on its natural resources, human capital, and strategic location to become a regional economic powerhouse.
“Uganda’s economy remains robust, supported by stable inflation, growing economic activity, a stronger shilling, and expanding private sector credit,” Kasaija concluded. “With prudent management and strategic investments, we are confident that Uganda is on the path to achieving its economic transformation goals.”