Uganda: Economic and Political Overview
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. Uganda has navigated the post-pandemic recovery well and remained resilient amid global economic challenges, with growth rising to 6.1% in FY24 from 5.3% the year before. This was driven by broad-based expansion in services (43.1% of GDP) and industry (24.9%), supported by stronger net exports—particularly coffee and gold—greater oil sector investment, and easing global supply chain pressures. According to the World Bank, growth is projected to rise slightly to 6.2% in FY25, led by agriculture and services. Over the medium term, it is expected to accelerate to 10.4% by FY27 with the start of oil production, before stabilising around 6% as output levels off. While oil sector developments are set to drive growth, global trade policy uncertainty and falling commodity prices could weigh on investment and economic performance.
Regarding public finances, Uganda’s fiscal deficit narrowed slightly to 5.1% of GDP in FY24 from 5.2% in FY23, reflecting ongoing consolidation driven mainly by cuts to capital spending. The primary deficit declined to 1.6% but remains affected by weak tax revenue performance, partly due to poor enforcement of the electronic fiscal receipting system. The quality of consolidation remains a concern, with essential social programmes impacted. The deficit was largely financed domestically. The primary balance is expected to worsen to -2.3% in FY25, then gradually improve to a 0.1% surplus by FY27. Efforts to boost domestic revenue—focusing on tax administration and fairness rather than rate increases—are projected to raise tax revenue by 0.5% and 1.3% of GDP in FY25 and FY26, respectively. Public debt is forecast to rise to 52.7% of GDP in FY25, then decline to 51% by FY27 (data World Bank). Headline and core inflation dropped to 3.2% and 3.0%, respectively, in FY24, down from 8.8% and 7.4% in FY23, remaining below the Central Bank’s 5% target. The decline was driven by favourable weather lowering food prices, global economic easing, exchange rate stability, and tight monetary policy. Core inflation is projected to rise to 3.7% in FY25 and reach 5% in FY26. As per the World Bank, Uganda’s key challenges include a persistent human capital gap and the absence of a robust productive jobs strategy amid a growing working-age population. While services dominate the economy, they generate fewer jobs than agriculture, which employs two-thirds of the workforce but suffers from low productivity, limited modernisation, and vulnerability to climate shocks. Moreover, climate adaptation efforts remain insufficient.
According to the National Bureau of Statistics, the unemployment rate stood at 12.3% as of 2024. Poverty at the international poverty line (USD 2.15 in 2017 PPP) was estimated at 41.3% in the same year and is projected to decline slightly in FY25, with a faster reduction expected as economic growth strengthens in the medium term. If oil revenues are effectively invested in social services, infrastructure, and human capital, poverty could drop to 38% by 2027. Lastly, the country’s GDP per capita (PPP) was estimated at USD 3,683 in 2024 by the IMF.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 51.09 | 55.59 | 62.92 | 72.43 | 78.17 |
| GDP (Constant Prices, Annual % Change) | 4.6 | 5.9 | 7.5 | 12.3 | 6.2 |
| GDP per Capita (USD) | 1,123 | 1,187 | 1,304 | 1,450 | 1,497 |
| General Government Gross Debt (in % of GDP) | 51.0 | 51.4 | 50.3 | 44.8 | 41.7 |
| Inflation Rate (%) | 5.4 | 3.5 | 4.4 | 4.9 | 5.0 |
| Current Account (billions USD) | -3.77 | -3.67 | -4.17 | -1.61 | -1.86 |
| Current Account (in % of GDP) | -7.4 | -6.6 | -6.6 | -2.2 | -2.4 |
Source: IMF – World Economic Outlook Database, October 2021
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 the leading sector of the economy, employing 65.9% of the workforce and accounting for 24.1% of the GDP. As per the Food and Agriculture Organization, Uganda possesses fertile agricultural land that can sustainably feed 200 million people. Despite 80% of Uganda's land being arable, only 35% is presently under cultivation. The country boasts a diverse range of agricultural products, including coffee, tea, sugar, livestock, fish, edible oils, cotton, tobacco, plantains, corn, beans, cassava, sweet potatoes, millet, sorghum, and groundnuts. However, the full commercial potential of the sector is hindered by farmers' limited access to fertilizer and high-quality seeds, as well as a lack of irrigation infrastructure, leaving production susceptible to adverse weather conditions and pest outbreaks. As per data by FAO, the agricultural growth rate in FY 2023/24 was 5.1%, driven by increasing production and private sector investments.
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 25.8% of GDP but employs only 7.1% of the workforce. The most important subsectors 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. The manufacturing sector as a whole accounts for 16% of GDP (World Bank).
The services sector in Uganda represents 42.5% of GDP and employs 27% of the active population; however, it is detached from primary sectors like agriculture and manufacturing, thus lacking the ability to spur economic growth. ICT is one of Uganda’s fastest-growing sectors, recording double-digit growth over the last few years, largely driven by the telecommunications sector. Concerning the tourism sector, available data indicates that international tourist arrivals jumped by 7.7% in 2024, climbing from 1,274,210 in 2023 to a remarkable 1,371,895 visitors. This surge in arrivals has led to a record-breaking revenue for the tourism sector, reaching USD 1.28 billion (+26% y-o-y), supported by extended visitor stays and greater tourist expenditure.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 65.9 | 7.1 | 27.0 |
| Value Added (in % of GDP) | 24.1 | 25.8 | 42.5 |
| Value Added (Annual % Change) | 4.5 | 4.0 | 5.9 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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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.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Latest Update: May 2025
