Finance Minister Matia Kasaija has announced a robust economic performance for Uganda during the Financial Year 2024/25 and presented an optimistic outlook for FY 2025/26, as he delivered the National Budget Speech at Kololo Ceremonial Grounds on Thursday.
Addressing Parliament and the nation, Kasaija highlighted Uganda’s resilience in the face of global and regional challenges, projecting GDP growth at 6.3% for the current financial year and 7% in the coming year, buoyed by investments in agriculture, industry, ICT, and services.
“Uganda is among the fastest-growing economies in the world and is projected to become the fastest by 2031,” Kasaija said, citing a Harvard Growth Lab study.
Economy Now Valued at USD 61.3 Billion
The size of Uganda’s economy has expanded to UGX 226.3 trillion (USD 61.3 billion) in FY 2024/25, up from UGX 203.7 trillion the previous year. In purchasing power parity (PPP) terms, this translates to USD 174.2 billion.
Driving this growth, according to the Minister, was “broad-based performance across agriculture, industry and services” with agriculture benefiting from increased productivity under initiatives like the Parish Development Model (PDM), and industry reaping gains from expanded electricity access and improved transport infrastructure.
Coffee Export Earnings Hit USD 2 Billion
Uganda’s export sector witnessed a remarkable surge. Total exports of goods and services reached USD 11.8 billion, up from USD 9.56 billion the previous year. Among the standout performers was coffee, whose earnings more than doubled to cross the USD 2 billion mark — a milestone achieved in record time.
Kasaija praised this development as “a true testament to the transformative potential of value addition and strategic investment in key sectors.”
Inflation, Exchange Rate Under Control
Inflation has remained tame, declining to 3.4% as of May 2025, well within the Bank of Uganda’s 5% policy target. The Uganda Shilling appreciated by 4% year-on-year, with the IMF naming it the most stable currency in Africa. This stability was attributed to strong export receipts, foreign direct investment, and tourism earnings.
Interest rates have also eased slightly, with the average lending rate at 17.7%, and private sector credit growing by 6.4% to UGX 23.3 trillion by March 2025.
Foreign Investment and Tourism Up
Foreign direct investment rose to USD 3.48 billion, from USD 2.99 billion in 2024. Tourism earnings followed suit, hitting USD 1.52 billion—a 13.1% increase—reflecting sustained peace, infrastructure upgrades, and Uganda’s growing appeal in high-value international markets.
Positive Outlook for FY 2025/26
Looking ahead, Uganda’s economy is projected to grow by 7% in FY 2025/26 and is expected to hit UGX 254.2 trillion (USD 66.1 billion), translating into a GDP per capita of USD 1,324.
Kasaija noted that economic transformation is expected to accelerate further with the onset of oil production in 2026, increased industrial output, and continued digital innovation. The budget’s theme, “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access,” underlines the government’s commitment to inclusive and sustained growth.
“The foundation has been laid. The challenge now is to speed up transformation so that every Ugandan feels the impact,” Kasaija concluded.
The 2025/26 national budget of UGX 72.38 trillion will be 60% financed through domestic revenue, with major allocations to infrastructure, health, education, and wealth creation programmes.