Uganda’s GDP per capita rises to US$ 1,420 as trade deficit widens, air quality worsens

KAMPALA, July 1, 2026 — Uganda’s economy registered a mixed performance in May 2026, with new government data showing improvements in income per person, investment, exports and business registrations, while the country also experienced rising fuel prices, worsening air quality, higher malaria prevalence and a widening trade deficit.

The findings are contained in the May 2026 Microeconomic Indicators and Developments [MIND] Update released by the Ministry of Finance, Planning and Economic Development [MOFPED], which tracks developments across employment, living standards, productivity, competitiveness, environmental sustainability and markets.

According to the report, Uganda’s GDP per capita increased by 4 percent, rising from US$1,360 in 2024/25 financial year [FY] to US$ 1,420 in FY2025/26, reflecting continued growth in average income per person. At the same time, the number of migrant workers registered by the Directorate of Immigration declined by 26 percent, dropping from 2,569 workers in April 2026 to 1,898 workers in May 2026.

The report also paints a mixed picture of household welfare. While monthly inflation for food and non-alcoholic beverages eased to 0.6 percent in May from 1.1 percent in April, inflation for Energy, Fuels and Utilities [EFU] accelerated to 3 percent, up from 1.8 percent the previous month.

“The increase was mainly attributed to higher prices of energy products, with kerosene inflation rising from 6.9 percent to 16.6 percent, petrol from 4.2 percent to 8.8 percent, and diesel from 8.2 percent to 10.6 percent,” the report states.

Despite the increase in fuel prices, internet costs continued to decline. The average cost of 1GB of mobile data reduced by 3 percent, from Shs 2,102 in December 2025 to Shs 2,039 in March 2026.

However, household spending weakened, with final household consumption expenditure falling by 14 percent, from Shs 42.44 trillion in the second quarter of FY2025/26 to Shs 36.10 trillion in the third quarter.

The Ministry also highlighted persistent gaps in social protection despite Uganda’s growing workforce.

“Out of Uganda’s total population in employment of 11.8 million as of 2025, only 4 million workers [15 percent] are covered under the existing retirement benefits arrangements,” the report notes.

It explains that the limited coverage is largely because pension and retirement benefit schemes have traditionally been confined to workers in the formal sector, leaving millions employed in the informal economy without retirement protection.

On environmental sustainability, the report shows that Kampala’s air quality deteriorated during May, with particulate matter concentrations increasing by 26 percent, from 21.6 micrograms per cubic metre [µg/m³] in April to 27.2µg/m³ in May.

“The deterioration was likely attributed to dry, sunny and dusty weather conditions,” the report says.

Health indicators also worsened during the month, with malaria prevalence increasing by 10.5 percent, from 1.9 deaths per 1,000 persons in April to 2.1 deaths per 1,000 persons in May.

The Ministry attributed the increase to the onset of rains, which created favourable mosquito breeding conditions during the early part of May.

The report further indicates that competitiveness faced mixed outcomes. Inflation for liquid energy fuels rose sharply to 9.3 percent in May from 4.8 percent in April, while communication costs also increased, with voice call rates rising by 15 percent, from Shs0.430 per second in December 2025 to Shs 0.495 per second in March 2026.

On a positive note, investment continued to strengthen. Fixed Capital Formation, which measures investment growth, increased by 1.4 percent, from Shs 14.25 trillion in the second quarter of FY2025/26 to Shs 14.46 trillion in the third quarter.

Export performance also improved significantly, with export earnings rising by 11 percent, from Shs 15.5 trillion in the second quarter to Shs 17.25 trillion in the third quarter of the financial year.

Financial markets remained relatively stable during the month. The Uganda Securities Exchange All Share Price Index edged up by 0.2 percent, increasing from 1,957.88 points in April to 1,961.44 points in May.

According to the report, the improvement was driven by strong gains in the share prices of Quality Chemical Industries Limited, Uganda Clays Limited and Airtel Uganda Limited.

The report also recorded increased business activity, with new business registrations growing by 2.6 percent, from 2,679 in April to 2,749 in May.

Globally, the International Monetary Fund Primary Commodity Price Index increased by 1 percent, from 214.26 to 216.61, supported by rising prices of base metals and industrial inputs.

However, Uganda’s trade balance deteriorated significantly.

“The monthly trade deficit increased by 127 percent, from US$ 47.7 million in March 2026 to US$ 108.17 million in April 2026,” the report states.

The Ministry attributes the increase largely to higher import bills for machinery, equipment, vehicles and accessories, whose value rose from US$ 256.85 million to US$ 282.43 million over the same period.

Looking ahead, the ministry projects that continued affirmative action programmes and the rollout of new wealth creation initiatives such as the Katale Loan will accelerate inclusive growth by reducing poverty, increasing household spending, improving labour productivity and strengthening resilience to economic shocks, ultimately supporting Uganda’s long-term development agenda and the government’s Tenfold Growth Strategy, a transformative economic blueprint aimed at expanding the country’s GDP from nearly US$ 50 billion to US$ 500bln by 2040.

https://thecooperator.news/three-indices-point-to-positive-outlook-for-ugandan-economy/

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