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Uganda’s coffee-fueled export boom pushed trade earnings to record highs in June, but a surge in imports—driven by oil, metals, and food products—underscored the country’s growing vulnerabilities. While investor sentiment remains upbeat and inflation is easing, policymakers face mounting pressure to balance rising import costs with sustaining export momentum.

KAMPALA — Uganda’s latest budget speech marks not just the start of a new fiscal year, but the end of a 15-year chapter in the country’s economic journey. With the economy more than tripling and life expectancy climbing to 68.2 years, the government touts its record as proof of visionary planning. But behind the figures, real challenges persist—rising public expectations, weak implementation, and a population asking when prosperity will be more than a promise.

Uganda has tabled its largest budget yet—Shs 72.1 trillion—promising faster roads, digital transformation, better schools, and more jobs. But with 60% of the financing expected to come from domestic taxes, small businesses and workers are asking: can the government deliver on this grand promise without squeezing the very people it aims to uplift?

With exports climbing and inflation still manageable, Uganda’s economy looks poised for growth. But beneath the surface, soaring spending and weak revenue collection could derail progress unless bold action is taken.

Uganda’s economy is on the rise, with 6.1% GDP growth in FY2023/24 and inflation dropping to 3.2%, according to the World Bank’s 24th Economic Update. The country’s oil production, set to begin in FY2025/26, is expected to drive GDP growth to 10.8%, generating $3.3 billion annually by 2030. However, Uganda faces critical fiscal and trade challenges, including a 7.9% current account deficit, declining foreign reserves, and risks associated with oil revenue management. Will Uganda’s economic policies steer the nation toward sustainable growth, or will external financial pressures derail progress?

Uganda’s economy grew by 6.1% in FY2023/24, driven by strong industrial and service sector performance, while inflation fell to 3.2%. However, challenges remain, including a 7.9% current account deficit, declining foreign exchange reserves, and fiscal discipline concerns. With oil production set to begin in 2025/26, Uganda faces a critical moment to strengthen its economic policies and sustain long-term growth.

Uganda’s economy is showing impressive growth, with GDP rising to 6.7% and export earnings surging by 21.8% in Q1 of FY 2024/25. However, the widening trade deficit and inefficiencies in service delivery pose challenges to sustained progress. The Ministry of Finance projects steady growth and stable inflation but emphasizes the need for export diversification, fiscal discipline, and investment in human capital to secure long-term economic resilience.

In August 2024, Uganda’s trade deficit widened by 16.6% from the previous month, reaching USD 314.10 million as the country saw an upswing in infrastructure-related imports. Yet, year-over-year, the deficit shrank by 8.4%, driven by robust export growth, especially from coffee and mineral products. As Uganda capitalizes on a robust coffee sector and diversified mineral exports, questions arise on balancing the gains with the rising import bill—largely fueled by government-led infrastructure investments.

As thousands of university graduates turn to boda-boda riding to make ends meet, Uganda faces a stark employment crisis. Finance Minister Matia Kasaija’s revelation that nearly half of the country’s one million boda-boda riders are graduates highlights the urgent need for sustainable job creation, education reform, and targeted economic policies. This phenomenon raises critical questions about the effectiveness of Uganda’s current economic strategies and the future of its young workforce.

Uganda’s external sector in 2024 shows strong performance with coffee exports surging by 82%, foreign direct investment hitting record highs, and remittances returning to pre-COVID levels. Inflation remains controlled, and the Ugandan shilling maintains stability against the US dollar. However, challenges in debt management persist as the government navigates domestic financing needs. With oil production on the horizon, Uganda’s economic outlook appears promising, but careful fiscal management remains essential.