Kampala – Uganda’s financial inclusion drive received a major boost in July 2025, with mobile money transactions reaching record highs despite sluggish job growth, a widening trade deficit, and environmental pressures, according to the Ministry of Finance’s latest Microeconomic Indicators and Developments (MIND) Report.

The report indicates that digital finance remains a central component of Uganda’s economy. The number of mobile money transactions increased by nearly 20% in just a year, while their total value jumped by almost a quarter. This signals both growing consumer reliance on digital platforms for everyday payments and the continued expansion of the financial sector into previously underbanked communities.

“The volume of mobile money transactions increased by 19.9% from 1.0 billion transactions in March 2024 to 1.2 billion in March 2025. The value of mobile money transactions increased by 23.9% from Shs33.9 trillion to Shs42.0 trillion,” the report highlighted.

Despite these positive strides, the broader economy faced several headwinds. Formal employment slightly contracted, suggesting businesses remain cautious in hiring. The number of employees captured under the PAYE register dropped by almost 700 in July, while the inflow of migrant workers also slowed, reflecting reduced demand for labor.

“Formal employment returns reduced by 0.08% from 890,111 employees in June 2025 to 889,422 employees in July 2025. Migrant workers also declined by 7.3% from 3,213 in June 2025 to 2,980 in July 2025,” the ministry revealed.

At the household level, inflationary pressures softened, giving some relief to families struggling with the high cost of living. Food and non-alcoholic beverage prices fell slightly, while energy and fuel prices also eased. This slowdown in price growth suggests greater stability in household expenditure, despite healthcare remaining a significant cost driver. On average, Ugandans spend about Shs32,000 per month on healthcare, but the disparities are wide — residents in Kampala spend more than four times the amount spent by households in West Nile.

While the cost of living showed some signs of easing, the environment deteriorated sharply. Kampala’s air quality worsened dramatically in July, with particulate matter nearly doubling within a month. This poses serious health risks, particularly for children and those with respiratory conditions, and highlights the challenge of balancing rapid urban growth with environmental sustainability.

“Air quality in Kampala deteriorated significantly, with particulate matter increasing by 90% from 28.75µg/m³ in June 2025 to 54.70µg/m³ in July 2025,” the ministry warned.

Adding to the strain were natural disasters that struck between June and July. Heavy rains, floods, and landslides displaced nearly 15,000 people, destroyed over 500 homes, and left thousands more vulnerable. The economic cost of such disasters continues to weigh heavily on affected communities and the government’s disaster response systems.

Uganda’s external sector also presented a worrying picture. The trade deficit widened dramatically, more than doubling from May to June. Higher import bills for petroleum products and minerals drove this imbalance, underscoring the country’s vulnerability to global price movements. A ballooning trade deficit not only puts pressure on foreign reserves but also risks weakening the shilling if not offset by stronger export growth.

“The monthly trade deficit significantly increased by 146.3% from $110.8 million in May 2025 to $272.9 million in June 2025. The increase was mainly attributed to a rise in import bills for petroleum and mineral products,” the report explained.

Still, there were bright spots. Capital markets recorded strong activity, with the Uganda Securities Exchange All-Share Index climbing by 4.6%. Turnover more than doubled to Shs10.8 billion, signaling renewed investor appetite, particularly in counters such as MTN Uganda and Umeme. At the same time, new business registrations rose by nearly a third in July, indicating growing confidence among entrepreneurs despite broader economic challenges.

Spotlight on Karamoja sub-region

While national averages showed a mixed picture of resilience and vulnerability, the MIND report singled out the Karamoja sub-region as an area of deep concern. With a population of 1.45 million, most of whom depend on subsistence farming and pastoralism, Karamoja continues to lag behind other regions in key development indicators.

The report revealed that poverty in Karamoja has worsened significantly over the past five years, with nearly three-quarters of the population now living below the poverty line. Although income inequality narrowed slightly, overall deprivation remains high. Unemployment in the sub-region stands at 14.5%, just under the national average, but limited formal job opportunities continue to drive dependence on livestock and small-scale agriculture.

“The poverty rate of the sub-region significantly increased by 13% from 65.65% in 2019/20 to 74.20% in 2023/24,” the report revealed.

Karamoja is endowed with significant natural resources, including 16.7% of Uganda’s cattle stock and minerals such as gold, marble, and limestone. However, these resources have not translated into sustained local prosperity, with wealth largely bypassing the communities. Tourism potential remains underexploited, as Kidepo Valley National Park, despite being Uganda’s largest game park, attracts only 1.7% of national park visitors.

Financial inclusion remains one of Karamoja’s biggest hurdles. The sub-region has very limited access to banking services, with only Centenary Bank and DFCU Bank present among the institutions listed on the Uganda Securities Exchange. This limited financial infrastructure has hindered access to affordable credit and slowed the uptake of government-led wealth creation initiatives such as GROW loans.

“Among the financial institutions listed on the Uganda Securities Exchange, only Centenary and DFCU Bank have presence in the sub-region. This makes the sub-region underserved in terms of financial inclusion and its inability to access affordable finance,” the ministry noted.

Outlook

Despite the challenges, the Ministry of Finance remained cautiously optimistic. It projected that lower inflation, especially in food and passenger transport, would boost 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, thus pointing to a brighter microeconomic outlook in the near term,” the report concluded.

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The inaugural Uganda Development Finance Summit 2025 officially began, yesterday setting the stage for dynamic discussions, networking, and innovative solutions to Africa’s pressing economic challenges.

Organised by Uganda Development Bank [UDB], the two-day summit being held at Speke Resort Munyonyo, Kampala has attracted delegates from across the globe, marking a pivotal moment for Africa’s economic transformation.

The opening ceremony saw a keynote address from Yoweri Museveni who was accompanied by his Janet. Museveni underscored the importance of vision, integrity, and patient capital for Africa’s growth, highlighting the crucial role of development finance institutions in driving sustainable progress.

“We must prioritise vision, integrity, and patient capital to transform Africa,” said Museveni.

He added, “Development finance institutions are essential for balancing impactful infrastructure and integrating millions of Ugandans into the economy. We need a government institution like the Uganda Development Bank, which focuses on development rather than profit.”

The President also called attention to the challenge posed by commercial banks, citing high interest rates of 22 percent despite inflation being below 5 percent. He proposed the need for a shift towards more development-oriented financial institutions to drive long-term prosperity.

In her remarks for today, Monica Musenero, Uganda’s Minister of Science, Technology, and Innovation, echoed the sentiment, emphasising the transformative power of technology.

“All nations have three vital resources: Natural resources, human capital, and technology. It is the technology that will amplify value,” Musenero asserted.

He further noted, “We must ensure that technology is at the core of Africa’s development agenda.”

The summit also featured insightful perspectives from renowned international experts such as Prof. Jeffrey Sachs of Columbia University. Sachs called for Africa to borrow more from abroad, but with a longer-term focus, citing the region’s limited access to credit and the impact of short-term loans on economic growth.

“Africa’s debts are not too high; they only appear so relative to low GDP levels,” Sachs remarked. “The focus must be on rapid growth and the investments needed to achieve it, without letting debt distress narratives derail long-term thinking.”

Sachs further emphasised that Africa’s population is poised to reach 25 percent of the global total by 2050, which will position the continent at the heart of the global economy. He urged the continent to look beyond traditional Western financial partnerships and embrace collaborations with emerging economies such as China and India.

The importance of empowering Africa’s youth and women was also highlighted on Tuesday by Justine Lumumba Kasule, Minister in the Office of the Prime Minister. She lauded the Uganda Development Bank for creating opportunities for women and youth through targeted financial facilities.

“When government programmes are complemented by financial institutions, the result is not just growth but transformation. Women and youth become employers, farmers are linked to markets, and communities gain access to better services,” Kasule said.

The summit’s parallel session on Economic Transformation in a Technologically Driven World was moderated by Collin Babirukamu, Executive Director of IT at the Bank of Uganda. This session brought together Musenero, Arshad Rab, CEO of the European Organisation for Sustainable Development, and Edem Adzogenu, Executive at Afrochampions, to discuss the future of Africa’s tech ecosystem.

“Technology is set to transform every industry, but Africa risks being left behind if we don’t act now,” said Rab. “We must optimise limited financial resources to close the gap and align government priorities with the needs of the tech sector.”

Didas Kayiranga, Resident Underwriter at ATIDI, discussed the role of capital markets in unlocking potential for SMEs and entrepreneurs. He shared success stories of regional trade initiatives, including the customs transit scheme that is simplifying cross-border trade and reducing transportation costs in East Africa.

“We have removed the tedious process of buying a bond at every border, streamlining trade between countries like Kenya and Burundi,” Kayiranga explained.

The summit also featured Prof. David Luke, a leading trade economist from the London School of Economics [LSE], who delivered the keynote address on the importance of intra-African trade. He highlighted the impressive 12.4 percent increase in intra-African trade reported by Afreximbank and emphasised that trade flows are a cornerstone of Africa’s development.

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Dr. Ould Tah on Monday, September 1^st took the oath of office, taking over the leadership of Africa’s premier development finance institution. He succeeds Dr. Akinwumi A. Adesina, who completed two terms as President.

Côte d’Ivoire’s President Alassane Ouattara and Mauritania’s President Mohamed Ould Ghazouani graced the high-level ceremony at the Sofitel Abidjan Hôtel Ivoire. Also in attendance were former AfDB Presidents Dr. Adesina and Dr. Donald Kaberuka, members of the Board of Governors, Executive Directors, staff, and international dignitaries. The ceremony was presided over by Ludovic Ngatse, Minister of Economy of the Republic of the Congo and Chair of the AfDB Board of Governors.

Dr. Ould Tah, 60, from the Islamic Republic of Mauritania, was elected on 29 May 2025 with more than 76% of shareholder votes—the highest margin ever for a first-term President in the Bank’s history.

President Ouattara described the transition as a “milestone which comes at a historic moment in the life of our pan-African institution” and one that “paves the way for a new era of hope for the Bank.”

In his remarks, President Ghazouani emphasized the weight of responsibility entrusted to Dr. Ould Tah: “He must ensure that the Bank strengthens its role in promoting Africa’s economic and social development, fulfilling the aspirations of our people for peace, prosperity, and progress.”

In his inaugural address, Dr. Ould Tah pledged that under his leadership, the Bank would be “the bridge between regions, between ambitions and execution, between public and private, between urgency and bureaucracy. Let us move forward together—with urgency, unity, and unwavering accountability.”

He laid out his “Four Cardinal Points” to guide his first 100 days in office: Listening intently; Launching a fast-track reform agenda; Deepening partnerships; and Accelerating delivery of real solutions.

“The Bank will be attentive, responsive, and capable of setting priorities that matter,” he said, stressing the importance of working closely with governments, the private sector, and international partners to “create a financial framework that serves Africa on its own terms.”

Acknowledging key development partners—including Finance in Common, the Alliance of African Financial Institutions, the International Development Finance Club, and the Arab Coordination Group—he pledged to broaden collaboration to include sovereign wealth funds, pension funds, and other new actors. He further committed to “urgently revisit our investment models to include a dedicated pillar for investment in peace.”

Dr. Ould Tah also announced plans to host a town hall meeting with staff, describing them as “the institution’s most valuable resource.”

Positioning the Bank as a guide for Africa amid the 21st-century challenges of demographics, technology, and climate change, he remarked: “Africa must look North, South, East and West—not to imitate, but to draw wisdom and strength from every direction while defining its own course. Like a navigator guided by the compass, the Bank should help Africa navigate megatrends toward greater self-reliance, ambition, and agency.” However, he cautioned that the Bank “should not aim to be everything to everyone,” but rather focus where it can make the greatest impact, always in partnership.

Dr. Ould Tah previously served as President of the Arab Bank for Economic Development in Africa (BADEA), where he oversaw a landmark transformation that grew assets from $4 billion to nearly $7 billion, increased annual approvals twelvefold, expanded disbursements eightfold, and secured AA+/AAA credit ratings. He also served as Mauritania’s Minister of Economy and Finance (2008–2015), and represented the country on the boards of the AfDB, the World Bank, and the Islamic Development Bank.

Fluent in Arabic, English, and French, with working proficiency in Portuguese and Spanish, Dr. Ould Tah holds a PhD in Economics from the University of Nice Sophia Antipolis in France, and advanced degrees from Paris VII-Jussieu and the University of Nouakchott.

He assumes leadership of a Bank with strong fundamentals: $318 billion in capital, AAA credit ratings maintained for ten consecutive years, and the world’s highest transparency score for a sovereign portfolio at 98.8%. Over the past decade, the AfDB has approved $102 billion in development financing.

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