KAMPALA, December 28, 2025 — Uganda’s economic growth remains robust, with real gross domestic product [GDP] rising to 6.3 per cent in the 2024/25 financial year, up from 6.1 per cent the previous year. A new World Bank report attributes this performance to a recovery in household consumption, accelerated government spending and continued investment growth.
The 26th edition of the Uganda Economic Update, published days ago, notes that growth was broad-based across agriculture, industry and services. As a result, poverty is projected to have declined in FY2024/25.
The report also shows that tight monetary policy helped keep inflation at 3.5 per cent, below the central bank’s medium-term target of 5 per cent. However, fiscal pressures have intensified, with a widening deficit alongside higher debt levels and servicing costs. This underscores the need to return to fiscal consolidation, as signalled in the government’s FY2025/26 budget.
Looking ahead, the report projects a positive medium-term outlook, supported by moderating spending growth after the general elections, the expected start of oil revenues in 2027, continued export dynamism and sustained foreign direct investment inflows.
Inflation is expected to remain low, anchored by prudent monetary policy and stable commodity prices. In line with these projections, poverty is expected to decline further in 2026 and 2027.
However, risks to the outlook remain. These include possible fiscal slippages, delays in oil sector development, further reductions in overseas development assistance, and heightened global uncertainty that could affect commodity prices and global financial conditions. In addition, climate shocks and lower-than-expected rainfall could increase poverty in the absence of mitigating measures, as most of the poor depend on rain-fed agriculture.
“Uganda’s growth remains strong; however, economic activity is currently concentrated in low-productivity and climate-vulnerable agriculture and informal jobs, which offer limited opportunities for income growth and upward mobility,” said Francisca Ayodeji Akala, World Bank Country Manager for Uganda.
She added that transforming the economy towards higher value-added activities is essential to deliver on the country’s Ten-Fold Growth Strategy. “Agro-industrialisation can be a key cornerstone of this transformation, leveraging agriculture as a platform for industrial growth and job creation,” Akala said.
This edition of the Uganda Economic Update focuses on identifying and addressing constraints to agro-industrialisation, which has significant potential for job creation, value addition and inclusive growth.
“The building blocks to pursue the agro-industrial agenda in Uganda are consistent with the World Bank’s AgriConnect initiative, which aims to integrate smallholders into agribusiness and transform the sector into an engine of sustainable growth, job creation and food security,” said Armine Juergenliemk, Senior Agricultural Economist and co-author of the report.
“This initiative opens opportunities for productive public–private partnerships to facilitate technology adoption, de-risk value chains, expand service delivery and ultimately create more jobs in agriculture and the rural economy,” Juergenliemk added.
To support Uganda’s agro-industrialisation path, the report recommends strengthening foundations and infrastructure through the development and dissemination of climate-smart agricultural technologies and innovations to sustainably increase productivity. It also calls for greater investment in irrigation to build agro-climatic resilience, the establishment of co-located infrastructure such as rural roads, energy and water, skills development, and the use of digital solutions to improve agricultural service delivery.
The World Bank further urges improvements in the policy and enabling environment by reforming policies, strengthening institutions, supporting farmer cooperatives, enabling competition among private sector players, and enhancing the capacity of public institutions to deliver high-quality public goods.
Policy reforms should aim to improve private sector participation in seed development—particularly multiplication—strengthen the public sector’s role in seed certification, de-risk the sector, increase access to finance and harmonise policies at the regional level to remove trade barriers.
The report also emphasises the need to mobilise private capital and strengthen market linkages by scaling up innovative financing, leveraging digital platforms and enhancing trade competitiveness. Private capital mobilisation should focus on developing instruments for whole-of-value-chain financing and expanding access to finance through innovative tools such as lease-to-own guarantees, insurance and blended finance.
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