Uganda’s Economy Grows to Shs 226 Trillion, GDP Up 6.3%

Uganda’s economy has shown remarkable resilience in the face of global, regional, and domestic shocks, posting steady growth in the 2024/25 financial year.

While addressing a press conference at Uganda Media Centre in Kampala on Tuesday, the Minister of Finance, Planning and Economic Development, Hon. Matia Kasaija, said the size of the economy expanded to Shs 226.3 trillion (US$61.3 billion) in FY2024/25, up from Shs 203.7 trillion (US$53.9 billion) the previous year. GDP per capita also rose from US$1,159 to US$1,263, while real GDP growth accelerated to 6.3 percent, compared to 6.1 percent in FY2023/24.

“This growth has been broad-based, covering agriculture, industry, and services such as ICT, and was largely driven by government wealth creation programs and sound fiscal and monetary management,” Kasaija said.

Meanwhile, Kasaija noted that inflation remained stable, easing to 3.8% in July 2025 from 3.9% the previous month, largely due to lower food prices and reduced transport costs following a drop in fuel prices. To keep inflation within the 5% target, the Central Bank Rate was maintained at 9.75% for the tenth consecutive month.

According to the finance minister, the Composite Index of Economic Activity (CIEA) rose from 179.14 in May 2025 to 181.03 in June 2025, indicating growing business activity. Investor confidence is buoyed by rising demand, higher employment, and increased output in agriculture, construction, manufacturing, services, and trade.

Exchange Rate and Currency Stability

The Ugandan shilling strengthened, appreciating by 0.5% to Shs 3,586 per US dollar in July 2025. This was supported by higher forex inflows from offshore investors, remittances, and export earnings, particularly coffee. The IMF recently ranked the shilling the most stable currency in Africa.

Also, Private sector credit grew by 7.5%, reaching Shs 23.9 trillion in June 2025 from Shs 22.2 trillion a year earlier. This reflects rising economic activity and stronger private sector participation.

Kasija told reporters that Uganda’s export base has diversified significantly, with 32 new export products emerging over the past 15 years, including ceramic tiles, soy residues, manufactured tobacco, and hair products.

As of June 2025, merchandise exports grew by 64.3% to US$1.15 billion, driven by coffee, minerals, tea, fish, and flowers. Imports rose by 50.7% to US$1.43 billion. Coffee’s dominance has declined from 75.6% of total exports in 1995 to 20.9% in 2025, as gold, cocoa, metals, and sugar gain ground.

Tourism also performed strongly, with inflows climbing to US$1.52 billion in the 12 months to March 2025, up from US$1.36 billion the previous year. Foreign Direct Investment rose to US$3.3 billion in 2024, largely due to oil and gas sector developments.

Domestic Revenues and Grants

Government revenues exceeded targets, with collections of Shs 32.08 trillion in FY2024/25, against the target of Shs 31.98 trillion. In July 2025 alone, revenues and grants amounted to Shs 2.54 trillion, boosted by Shs 168.2 billion in additional grants.

According to Kasaija, Uganda recently achieved lower-middle-income status and improved its Human Development Index from 0.550 in 2022 to 0.582 in 2023, moving up two positions in global rankings.

Life expectancy has risen from 63.7 years to 68.9 years, poverty levels dropped from 20.3% in 2019/20 to 16.1% in 2023/24, and income inequality (Gini coefficient) improved from 0.413 to 0.382.

“These gains are attributed to government wealth creation initiatives targeting youth, women, the elderly, and persons with disabilities,” the minister noted.

Looking ahead, the minister says that Uganda’s economy is projected to grow by at least 7% in FY2025/26, with prospects of double-digit growth in the medium term as oil and gas production commences.

Over the next 15 years, government expects the economy to expand to US$500 billion, anchored on the Ten-Fold Growth Strategy, which prioritizes agro-industrialization, tourism, mineral-based industrial development, and science, technology, and innovation.

“Uganda’s economy remains robust, supported by stable inflation, a stronger shilling, and vibrant private sector growth. Our Ten-Fold Growth Strategy will propel Uganda from a US$61 billion to a US$500 billion economy,” Kasaija emphasized.