Uganda’s economy remains resilient and firm on a growth path despite global uncertainties, according to the pre-election economic and fiscal update released by the Ministry of Finance ahead of the January 2026 general elections.
Presenting the update, the Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi said the report was prepared in line with the Public Finance Management Act Cap. 171, which requires the government to publish an economic and fiscal outlook not earlier than four months before polling day.
“This update has been written in accordance with the law and is based on all policy decisions and other circumstances with economic and fiscal implications known to the government at the time of its finalisation,” Ggoobi said.
The Ministry reported that Uganda’s domestic economy has demonstrated strong resilience despite global headwinds, including trade wars and heightened geopolitical tensions. Economic growth stood at 6.3 percent in the financial year 2024/25, supported by macroeconomic stability arising from effective coordination between fiscal and monetary policy.
“Inflation has remained within the five percent policy target, the exchange rate has stayed stable with a bias towards appreciation, and export earnings from coffee and industrial products have reached new highs,” Ggoobi noted. “These outcomes signal that recent government measures to promote exports and raise productivity are beginning to deliver tangible results.”
The strength of the economy has also been reflected in rising investor confidence. Foreign Direct Investment increased to $2.98 billion in FY 2024/25, largely driven by developments in the oil and gas sector. At the same time, remittances from the Ugandan diaspora rose to $1.57 billion, while tourism receipts recovered to the same level following the slump caused by the #COVID-19 pandemic.
“Together, these represent the highest levels of foreign direct investment and remittances ever recorded in a single financial year,” the update states.
As a result of the improved external position, foreign exchange reserves strengthened to 3.7 months of future imports by September 2025, up from 2.3 months a year earlier, excluding oil project related imports.
On the social economic front, the Ministry reported notable progress in reducing poverty and subsistence livelihoods, largely attributed to government interventions such as the Parish Development Model.
“The share of households operating in the subsistence economy declined to 33.1 percent by the end of FY 2023/24, while poverty levels fell to 16.1 percent from 20.3 percent in FY 2019/20,” Ggoobi said, describing the gains as a strong foundation for further transformation.
Looking ahead, FY 2025/26 is described as pivotal despite being an election year. It marks the first year of implementing the Fourth National Development Plan alongside the tenfold growth strategy aimed at expanding the economy from about $62 billion to over $500 billion dollars within the next fifteen years.
“With stability preserved, economic growth is projected at 6.6 percent in FY 2025/26 and is expected to strengthen to over seven percent over the medium term,” Ggoobi said.
He added that the government would continue prioritising agro-industrialisation, tourism development, mineral development, including oil and gas, and science and technology innovation, supported by investments in infrastructure, security, and human capital.
On election financing, the Ministry assured the public that adequate resources have been provided to support the electoral process.
“Since the start of FY 2023/24, the government has allocated and released a total of Shs1.116 trillion to agencies implementing the electoral roadmap. We remain committed to further supporting the process to ensure smooth delivery of the general elections,” Ggoobi said.
The update also shows that while Uganda’s trade deficit narrowed in FY 2024/25 due to strong export growth, it widened in the first quarter of FY 2025/26 as imports increased to support investments in the oil and gas sector ahead of first oil.
On domestic revenue, collections in the first quarter of FY 2025/26 amounted to Shs7.55 trillion, falling short of the target due to lower than expected performance in customs, indirect domestic taxes, and non-tax revenue. However, income taxes performed above target, with strong growth in corporate tax, withholding tax, and taxes on interest.
Government expenditure slightly exceeded plans during the quarter as implementation of domestically financed development projects was accelerated. Significant resources were directed towards agro industrialisation, science and technology, mineral development, tourism, infrastructure, human capital development and security.
“As the country enters the election period, the government will continue taking deliberate efforts to preserve a stable macroeconomic environment. Peace, stability, and sound economic management remain essential to sustaining growth and safeguarding the progress Uganda has made,” Ggoobi said.
