KAMPALA, January 10, 2025 — Uganda’s economy has demonstrated strong resilience and steady growth despite global economic headwinds, according to the Pre-Election Economic and Fiscal Update released on Thursday by the Ministry of Finance, Planning and Economic Development.
The update shows that Uganda’s economy grew by 6.3 percent in financial year [FY] 2024/25, up from 6.1 percent the previous year, driven by robust investment, strong export performance, and continued macroeconomic stability. Inflation has remained firmly within the government’s 5 percent policy target, while the Uganda shilling strengthened against major currencies, supported by rising foreign exchange inflows.
The update presented by Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi said the positive performance reflects effective coordination between fiscal and monetary policy, as well as targeted government interventions aimed at boosting productivity and exports.
“Export earnings from coffee and industrial products have reached new highs, foreign direct investment is at record levels, and remittances from the diaspora continue to grow,” Ggoobi said.
Record FDI, remittances and tourism recovery
According to the report, foreign Direct Investment [FDI] rose to a record US$ 2.98 billion in FY 2024/25, largely driven by oil and gas developments, manufacturing, and infrastructure projects. Remittances from Ugandans abroad increased by 11.8 percent to US$ 1.57bln, while tourism receipts also reached a post-Covid high of US$ 1.57bln, surpassing pre-pandemic levels.
These inflows have strengthened Uganda’s external position, with foreign exchange reserves rising to US$ 4.98bln by September 2025, equivalent to 3.7 months of import cover, up from 2.3 months a year earlier.
Poverty reduction and structural transformation
The update highlights progress in Uganda’s socio-economic transformation agenda, particularly under the Parish Development Model [PDM]. The share of households engaged in subsistence activities declined to 33.1 percent by the end of FY 2023/24, while poverty levels fell to 16.1 percent, down from 20.3 percent in FY 2019/20.
Employment conditions have also improved. According to the Uganda National Household Survey 2023/24, 63.8 percent of the working population is now in employment, compared to 52.1 percent in 2019/20.
Outlook: Growth to accelerate despite election year
Looking ahead, government projects economic growth of 6.6 percent in FY 2025/26, with growth expected to exceed 7 percent over the medium term, even as the country heads into general elections scheduled for January 2026.
FY 2025/26 marks the start of implementing the Fourth National Development Plan [NDP IV] and the ambitious ten-fold growth strategy, which aims to expand Uganda’s economy from US$ 61.99 billion to over US$ 500bln within 15 years. Priority sectors include agro-industrialisation, tourism, mineral development—including oil and gas—and science, technology and innovation.
Fiscal pressures emerge
Despite the strong growth outlook, the update notes emerging fiscal pressures. In the first quarter of FY 2025/26, government recorded a fiscal deficit of Shs 4.16 trillion, nearly 30 percent higher than programmed. This was attributed to revenue shortfalls, lower-than-expected grants, and higher spending on development projects.
Domestic revenue collections fell short of target by Shs 392bln, mainly due to underperformance in customs and indirect taxes, although income tax collections exceeded expectations.
Election financing fully provided
On election preparedness, the Ministry reported that it has so far allocated and released Shs 1.12 trillion to agencies involved in organising the 2026 general elections, out of a total requirement of Shs 1.24 trillion. By November 2025, Shs 838.16bln had already been spent, with the Electoral Commission [EC] accounting for the largest share.
“The Ministry remains committed to ensuring adequate financing for a smooth and credible electoral process, while preserving macroeconomic stability,” Ggoobi said.
The update is published in compliance with the Public Finance Management Act, which requires a pre-election economic and fiscal assessment to promote transparency and accountability ahead of national polls.
https://thecooperator.news/coop-leaders-launch-manifesto-for-inclusive-global-economy-in-doha/
Buy your copy of thecooperator magazine from one of our country-wide vending points or an e-copy on emag.thecooperator.news
