Kampala – April 18, 2026
KAMPALA — Uganda’s economy is showing fresh signs of momentum heading into the second quarter of 2026, according to the latest data from the Ministry of Finance, Planning and Economic Development.
The government’s Composite Index of Economic Activity rose by 0.6 percent to 185.6 in February, the ministry said in its latest high-frequency report. The index, which tracks exports, bank lending and domestic demand, signals a quiet but steady recovery after years of global price shocks and the lingering effects of the COVID-19 pandemic.
Private sector activity is also gaining ground. The Purchasing Managers’ Index — a key survey of business conditions — registered 54.3 in March, well above the 50 mark that separates expansion from contraction. Firms across manufacturing and services reported rising new orders, increased output, and—critically for many households—growing employment levels.
Business sentiment is strengthening in tandem. The Business Tendency Index climbed to 57.83 in March, reflecting broad-based optimism. Growth was led by agriculture and financial services—two pillars of Uganda’s economy, where farming employs the majority and banks remain the primary source of credit for small businesses and rural enterprises.
Inflation, a key pressure point for households, edged down slightly to 2.8 percent in March from 2.9 percent the previous month. While fuel prices ticked upward, the cost of food crops and other essentials rose more slowly. For everyday Ugandans—from boda boda riders to market vendors—this moderation offers some relief in managing weekly expenses.
Ramathan Ggoobi, who has overseen the government’s economic strategy, has consistently pointed to deliberate policy choices aimed at maintaining price stability. In earlier remarks reflecting his current approach, he noted that expanding productive participation through initiatives such as the Parish Development Model (PDM) has helped anchor inflation.
> “The key drivers of Uganda’s inflation—food prices, utilities, and the exchange rate—are fully under control. Why? PDM has brought previously idle or underutilized resources, especially subsistence farmers, into the productive economy,” he said.
On the external front, export performance stood out. Shipments surged 63.7 percent year-on-year in February to $1.37 billion, driven largely by gold and coffee. Coffee remains Uganda’s leading cash crop, and stronger export receipts are boosting foreign exchange inflows.
Imports also increased, leaving a trade deficit of $61.91 million. However, the scale of export growth underscores rising global demand for Ugandan goods.
The Ugandan shilling weakened by 4.5 percent against the US dollar in March, averaging Shs 3,730.53. The ministry attributed the depreciation to global dollar strength and sustained demand from importers, pressures amplified by geopolitical tensions, particularly in the Middle East.
Ggoobi recently highlighted the broader global dynamics shaping economic outlooks:
> “The world today, according to *The Economist*: Iran war—impacting oil, inflation and geopolitical realignment; global credit tightening; energy security returning as a macro priority; Africa becoming central in oil dynamics; and AI and technology shaping the next growth cycle.”
These trends feed into Uganda’s long-term economic ambitions. In February, Ggoobi outlined the thinking behind the country’s push toward a $500 billion economy:
> “When we began crafting the strategy to grow Uganda’s economy to $500 billion, we asked ourselves a fundamental question: What will we do differently this time?”
For many Ugandans, the implications of the latest data are increasingly tangible. Businesses are expanding, hiring is picking up, inflation remains contained, and exports are rising—signals that the economy is gradually shifting from stabilization to growth.
Officials at the finance ministry say they will continue to monitor these trends closely to ensure gains are sustained.
For now, the early 2026 indicators send a clear message: Uganda’s recovery is gaining traction where it matters most—in production, trade, and household resilience.
Watchdog Uganda will continue to track how these trends translate into jobs, prices, and economic opportunity across the country.
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