Date: June 16, 2025
Uganda is one of the few countries in Africa that is quietly becoming a powerful hub for business and investment. Even when the world faced economic slowdowns, Uganda's economy remained strong. In the financial year 2023–2024, Uganda's economy grew by 6.1%, a clear jump from the 5.3% in the previous year. This growth didn’t just come from one place. It was driven by the rise in services (which now make up 43.1% of the economy) and industry (24.9%). This shows that Uganda is expanding in a balanced and healthy way.
One of the biggest strengths behind this growth is Uganda’s rising export numbers. Coffee and
gold continue to lead as major exports, and the country has also seen new investments in its oil
sector. The government has also played its part by introducing programs like the Parish
Development Model (PDM), which supports local communities and pushes economic activity
from the grassroots level.
Another strong sign of economic health is the drop in inflation. In the financial year 2024, headline
inflation came down to 3.2% from 8.8% the previous year. Core inflation dropped to 3% from
7.4%. These numbers are even lower than Uganda’s Central Bank target of 5%. Thanks to lower
food prices, smarter monetary policy, better exchange rate stability, and global conditions
improving, the overall cost of living is now under better control.
If you're planning to invest, knowing that a country’s inflation is stable is very important. It means
your money won’t lose value quickly and the business environment is easier to manage.
Now let’s talk about Uganda’s future. Experts expect the country to grow even more, with the
economy set to reach a 6.2% growth rate in the financial year 2024–2025. The main drivers here
will be agriculture and services. But the real game-changer is coming soon—oil production. By
2027, once full oil production begins, Uganda’s economic growth is expected to jump to 10.4%.
That’s huge. Not only will oil bring direct income, but it will also lead to big changes in other parts
of the economy. Roads, infrastructure, and local businesses will grow, and many foreign investors
will want to join in.
Yes, Uganda still faces poverty, with 42% of people living under $2.15 a day. But there is hope. With oil revenues being invested wisely in health, education, and transport, poverty levels are expected to drop to 38% by 2027. That means more people will have better access to basic services, and the market will continue to grow.
Like any country, Uganda has its challenges. The pace of reforms has slowed, and many young people don’t have jobs. Even though services form a large part of the economy, most jobs still come from agriculture. Unfortunately, farming in Uganda is not very modern and is easily affected by climate changes. There is also a need for better adaptation strategies to deal with climate risks. If Uganda wants to grow faster and reduce poverty, it needs to shift workers to better-paying jobs, especially in industries and modern farming. The government must also make it easier for people to start businesses, reduce costs, improve access to money, and use digital tools. These steps will attract private investors and build a strong local economy.
One of the most important things for Uganda to focus on is human capital. This means better
education, healthcare, and job training. Right now, Uganda’s Human Capital Index (HCI) is 0.39,
which is low compared to other countries. It shows that many young people are not reaching their
full potential. While primary school enrolment has grown from 2.6 million in 1995 to 8.7 million
in 2017, many students are not learning enough. On average, children go to school for 6.8 years
but gain only 4.3 years’ worth of education. That needs to change.
Health, however, is improving. Life expectancy in Uganda has gone up from 46.3 years in 1990
to 68.5 years in 2024. Maternal and child mortality rates are lower, and diseases like malaria are
under better control. But new health problems like diabetes, high blood pressure, and health
emergencies need more attention now.
In the long run, Uganda must stick to its budget rules, use oil money wisely, and support other parts of the economy that don’t rely on oil. If it keeps moving in this direction, Uganda will not only grow but also lift millions of people out of poverty.
Uganda is moving forward with real promise. With a growing economy, lower inflation, strong exports, and upcoming oil production, it is a great place for long-term investment. While it still faces challenges like poverty and youth unemployment, the government’s focus on human capital, infrastructure, and business-friendly policies is setting the stage for success. Investing in Uganda today means being part of a country that is building a better tomorrow.
