Mobile money transactions soar in July amid mixed economic signals in Uganda
KAMPALA, September 21, 2025 – Uganda’s push for financial inclusion gained renewed momentum in July 2025, as mobile money transactions hit record levels, even as job growth slowed, the trade deficit widened, and environmental conditions deteriorated, according to the Ministry of Finance’s latest Microeconomic Indicators and Developments [MIND] report.
The report highlights the increasing centrality of digital finance in Uganda’s economic landscape. The number of mobile money transactions rose by nearly 20 percent year-on-year, while the total value increased by almost 24 percent, underscoring growing consumer reliance on mobile platforms and their role in expanding access to finance for underbanked communities.
“The volume of mobile money transactions increased by 19.9 percent, from 1.0 billion in March 2024 to 1.2bln in March 2025. The value rose by 23.9 percent, from Shs 33.9 trillion to Shs 42.0trn,” the report noted.
Labour market stagnation
Despite gains in the digital economy, the formal labour market showed signs of strain. The number of employees registered under the pay-as-you-earn [PAYE] system fell slightly in July, and inflows of migrant workers declined, indicating subdued labour demand.
“Formal employment returns reduced by 0.08 percent, from 890,111 in June to 889,422 in July 2025. Migrant workers decreased by 7.3 percent, from 3,213 to 2,980 over the same period,” the ministry reported.
Household pressures ease, but environment suffers
On the household front, inflationary pressures eased somewhat, offering modest relief from the cost of living. Prices for food and non-alcoholic beverages dipped slightly, and energy and fuel prices also moderated. However, healthcare remained a significant burden, with average monthly expenditure estimated at Shs 32,000. Notably, residents of Kampala spend more than four times as much on healthcare as households in West Nile.
Environmental indicators, meanwhile, deteriorated sharply. Air quality in Kampala worsened dramatically, with particulate matter levels nearly doubling in just one month.
“Air quality in Kampala deteriorated significantly, with particulate matter rising by 90 percent, from 28.75µg/m³ in June to 54.70µg/m³ in July 2025,” the ministry warned.
The month also saw a series of natural disasters. Heavy rains, floods, and landslides between June and July displaced nearly 15,000 people, destroyed more than 500 homes, and severely disrupted livelihoods in affected areas.
Trade deficit widens
Uganda’s external sector showed signs of vulnerability, with the trade deficit more than doubling between May and June 2025. Rising import costs, particularly for petroleum and mineral products, were the main drivers of this deterioration.
“The monthly trade deficit rose by 146.3 percent, from USD 110.8 million in May to US$ 272.9 million in June 2025,” the report revealed.
Such a widening gap places pressure on foreign reserves and could destabilise the shilling unless counterbalanced by stronger export performance.
Market and enterprise growth offer hope
Despite these challenges, there were bright spots. Capital markets posted strong performance, with the Uganda Securities Exchange All-Share Index rising by 4.6 percent, and turnover more than doubling to Shs 10.8 billion. Renewed investor interest was particularly visible in MTN Uganda and UMEME shares.
Business sentiment also improved, with new business registrations increasing by nearly a third in July, suggesting growing confidence among entrepreneurs.
Spotlight: Karamoja Sub-region
The report drew particular attention to the Karamoja sub-region, which continues to lag behind national development trends. With a population of 1.45 million, most dependent on subsistence farming and pastoralism, Karamoja faces entrenched poverty and underdevelopment.
“The poverty rate in Karamoja rose significantly by 13 percent, from 65.65 percent in 2019/20 to 74.20 percent in 2023/24,” the report stated.
While the region holds 16.7 percent of Uganda’s cattle stock and significant mineral resources—including gold, marble, and limestone—these assets have not translated into local prosperity. Tourism potential remains largely untapped; despite being Uganda’s largest national park, Kidepo Valley attracts only 1.7 percent of national park visitors.
Financial inclusion is a major constraint. Only Centenary Bank and DFCU Bank, among institutions listed on the Uganda Securities Exchange, operate in Karamoja. This limited access to banking services hampers uptake of government initiatives like the Generating Growth Opportunities and Productivity for Women Enterprises [GROW] loan scheme.
“Karamoja remains underserved in terms of financial inclusion and access to affordable finance,” the report noted.
Outlook
Despite the headwinds, the Finance ministry maintains a cautiously optimistic outlook. Easing inflation, particularly in food and transport, is expected to spur consumer demand in the coming months.
“With a reduction in inflation pressures due to lower food crop and passenger transport prices during July 2025, aggregate demand is expected to increase. Domestic economic activity has remained resilient, pointing to a brighter microeconomic outlook in the near term,” the report concluded.
https://thecooperator.news/govt-asked-to-deal-with-illegal-online-money-lenders/
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