Uganda’s economic performance is on an upward trajectory, as indicated by the latest Performance of Economy Report for October 2023. The Business Tendency Index (BTI) rose from 58.6 in September 2023 to 60.5 in October 2023, reflecting positive sentiments about doing business in the country.
In September 2023, Uganda witnessed a notable improvement in its trade balance, with a 15.3% reduction in the trade deficit to USD 296.35 million from August 2023’s USD 349.72 million. This positive shift was primarily driven by a decrease in the import bill.
Merchandise exports played a crucial role in this economic rebound, soaring by an impressive 93.1% from USD 327.38 million in September 2022 to USD 632.06 million in September 2023. Key contributors to this export growth included gold, coffee, maize, and other commodities. Despite challenges such as the recent conflict in Sudan impacting tea and coffee exports, Uganda’s economy remains resilient.
The current business environment in Uganda is characterized by steady recovery, with a projected economic growth rate of 5.5% for the fiscal year 2022/23, surpassing last year’s 4.6%. The outlook is optimistic, with a further predicted growth of 6% in 2024. Notably, Uganda’s economic performance surpasses the Sub-Saharan Africa average growth rate, estimated at 3.6% for 2023.
The size of the economy has expanded by 13%, reaching Ushs 184.3 trillion (equivalent to US$ 49.4 billion) in the fiscal year 2022/23, compared to Ushs 162.9 trillion in the previous financial year.
Despite economic growth, Uganda has managed its public debt effectively, projecting it at Shs. 88.9 trillion (US$ 23.7 billion) by June 30, 2023. The Debt to GDP ratio is expected to decrease from 48.6% in June 2022 to 48.2% by the end of June 2023.
The Services sector played a pivotal role in Uganda’s economic revival, growing at 6.2%, up from 4.1% the previous year.
Agriculture also saw robust growth at 5.0%, driven by strong performance in food crops, livestock, and fishing, despite a dry spell in the first quarter.
However, the Industry sector experienced a slight dip, growing at 3.9% compared to 5.4% in the previous year, attributed to lower output from manufacturing and mining & quarrying sub-sectors.
In June 2023, business sentiments remained positive, with the BTI improving to 61.98, up from 58.39 in May. The Stanbic Bank Uganda’s Purchasing Manager Index (PMI) stood at 56.4 in June 2023, reflecting a general improvement in economic activity. The Bank of Uganda maintained the Central Bank Rate (CBR) at 10% in response to easing inflationary pressures.
As the country navigates global challenges, Uganda’s economy continues to demonstrate resilience, fostering an environment conducive to business growth and investment.