“The MPC assessed that inflation could rise moderately during the second half of2026 before stabilizing around the medium-term target. However, uncertainty remains unusually elevated, with a wide range of possible outcomes depending on the duration of the conflict, implying that monetary policy needs to remain agile and responsive,” he said.

He said, “Against this backdrop, the MPC judged it appropriate to maintain the CNBR at 9.75 percent as it continues to assess developments in the global economic environment.”

Atingi-Ego said monetary policy remains focused on mitigating the impact of the current fuel price increase on inflation, while supporting the economy’s adjustment to global headwinds. The CBR has been at 9.75% for well over a year.

However commercial banks have been directed have more cash available at hand. “To contain liquidity conditions in the banking system while ensuring that inflation expectations remain anchored around the medium-term target, the Bank of Uganda increased the Cash Reserve Requirement (CRR) to 11 pc from the 9.5 percent in March 2026.”

CRR is a key monetary policy tool used to manage banking system liquidity, control inflation, and ensure banks can meet customer withdrawals.

Over the 2 months to April 22026, inflation remained below the medium-term target of five percent, reflecting the continued effectiveness of monetary policy. According to an MPC statement, Annual headline and core inflation averaged 3.4 percent and 3.5 percent respectively. However, the conflict in the Middle East has resulted in significantly higher global oil prices and heightened uncertainty surrounding the economic outlook.

Although the Uganda economy continues to face challenges arising from global developments and geopolitical uncertainty, it remains on an upward trajectory. Real economic growth strengthened in the first half of FY20225/226, supported by broad-based improvements across the agriculture, industry and services sectors. During the first two quarters of 2025/2026, economic activity expanded at a pace consistent with the current potential growth, averaging 6.7 percent.

The forecast for GDP growth in FY2026/2027 remains broadly unchanged from the February 2026 projection round. While the conflict in the Middle East could alter the sectoral composition of growth, higher global oil prices, in particular, could increase the value of Uganda’s oil exports even as they place pressure on household consumption and business costs.

Over the medium term, economic growth is projected to average around eight percent, supported by stronger export growth and increased business investment.

The post Uganda central bank rate stays at 9.75% as banks told to cash up appeared first on 256 Business News.

According to a EAC Secretariat press release, the meeting brought together representatives from key stakeholder institutions, including Ministries of Finance, Central Banks, the Capital Markets Authorities, Securities Exchanges, and Secretariat staff.

In his opening remarks, Dr. Moise Bigirimana, Executive Director, Financial Sector Conduct and Development, National Bank of Rwanda (BNR), said the cross-border trading initiative remains a key pillar in advancing regional financial integration and deepening EAC capital markets.

Dr. Bigirimana said, “A coordinated regional approach is essential for the successful implementation of cross-border trading of government securities. I urge Partner States to fully implement the Council Directives within their national legal and regulatory frameworks. Institutions should also align their internal processes to support cross-border trading, while the Regional Technical Working Group should continue to serve as a platform for peer learning and knowledge sharing.”

The regional experts had previously met to identify key pillars necessary to support cross-border trading of government securities. These pillars included the development of appropriate market infrastructure and the adoption of a regional trading model. The Kigali meeting assessed whether existing EAC Council Directives on Securities Markets adequately support these earlier proposals.

Speaking during the meeting, the Chairperson, Dickson Ssembuya, Director of Research and Market Development, Capital Markets Authority, Uganda, emphasised the importance of strengthening regional capital market integration and aligning EAC securities markets with global standards.

He said, “The free movement of capital, as provided for under the EAC Common Market Protocol, remains one of the most important commitments made by Partner States to citizens and investors. As we advance regional integration, it is essential that our discussions are guided by international best practices. Many of the challenges we face in integrating our securities markets are not unique to the EAC, and we can learn valuable lessons from other regional blocs that have successfully implemented similar reforms.”

The EAC Council Directives on Securities Markets, gazetted in Partner States between 2015 and 2017, were introduced to harmonise rules and procedures across EAC securities markets. However, given the passage of time, there is a need to review the directives to reflect market developments, technological advancements, and international best practices.

Harmonisation of rules and regulations through Council Directives is critical to facilitating the free movement of goods, services, and capital within the region, as provided for under the Protocol on the Establishment of the East African Community Common Market.

During the meeting, the Regional Technical and Legal Working Group undertook a comprehensive review of several key Council Directives critical to the development of integrated regional securities markets. These included directives relating to Admission to Trading on a Secondary Exchange; Public Offers (Debt) in the Securities Market; Regional Listings in the Securities Market; Central Securities Depositories (CSDs); and Securities Exchanges.

The review generated recommendations aimed at improving legal clarity, strengthening regulatory alignment, harmonising market practices, and accelerating the integration of EAC capital markets.

As next steps, the Technical Working Group will submit its observations and recommendations to the EAC Monetary Affairs Committee (MAC), the Committee on Fiscal Affairs (CFA), and the Capital Markets, Insurance and Pensions Committee (CMIPC) for consideration.

Once amendments to the Council Directives are approved, the EAC Secretariat will work closely with Partner States to support their implementation, with the ultimate goal of enabling efficient cross-border trading of government securities across the region.

The post Regional technocrats meet to drive EAC cross-border government securities trading appeared first on 256 Business News.

In the run-up to event which will involve some 300 participants, Kamil Alawadhi, IATA’s Regional Vice President for Africa and the Middle East said, “Aviation has the potential to do much more to enable Africa’s economic and social development. Improving safety, harmonizing regulations, and reducing costs while increasing operational efficiency are at the top of the agenda for this edition of the IATA Focus Africa Conference.”

He said, “The demand to support a three to four percent growth annually is there. Focus Africa aims to align the continent’s aviation stakeholders in taking the pragmatic steps needed to turn potential into a sustainable reality.”

This year’s theme ‘Elevating Aviation Safety, Connectivity, and Operational Efficiency in Africa’ reflects a shared mission to transform challenges into opportunities and build a resilient, future-ready aviation ecosystem across the continent.

Discussions will revolve around other key themes including Safety Enhancement, specifically strengthening safety standards and oversight to ensure secure skies for all.

Also Stronger Connectivity in terms of boosting intra-African routes, harmonizing regulations, and supporting the Single African Air Transport Market (SAATM).

Participants will discuss how to aim for Efficient Operations in streamlining processes, embracing digital innovation, and improving cost-effectiveness across the value chain.

Ethiopian Airlines hosted the inaugural Focus Africa Conference in 2023. Since then, IATA’s Focus Africa initiative has led several key developments for African aviation. These include support for the roll-out of Advance Passenger Information (API) for identity and Passenger Name Record (PNR) programs in 12 African countries, numerous safety initiatives across the region.

There were also new settlement operations in Sierra Leone and South Sudan (BSP) and in Ghana and Ivory Coast (CASS). The introduction of the IATA Easy Pay in Cameroon, Chad, Gabon, Congo, Mauritius, and Sierra Leone, where market development has been hindered by limited payment options for agents and cash flow challenges for airlines, has also eased operational bottlenecks.

The Addis conference will take stock of these and other advancements while identifying the critical next steps in the development of Africa’s aviation sector.

The post African aviation stakeholders converge on Addis Ababa for IATA conference appeared first on 256 Business News.

Six weeks into the ongoing conflict involving the United States, Israel and Iran that has disrupted global crude and refined petroleum supply chains, Uganda is emerging with significantly lower pump prices than its regional peers.

The development comes as the Uganda National oil Company (UNOC), announced Tuesday, that a new consignment of petroleum products including 119 million litres of  petrol, had landed at Mombasa, further allaying emerging jitters in the market. UNOC, said petroleum product supply remains secure and sufficient to meet national demand.

Latest regional pricing data shared on X (formerly Twitter) by the Money Academy Kenya, shows Uganda’s fuel prices now sit comfortably below most East African markets when denominated in Kenyan shillings:

• Kenya: Petrol Sh206 | Diesel Sh206
• Uganda: Petrol Sh184 | Diesel Sh177
• Rwanda: Petrol Sh204 | Diesel Sh195
• Tanzania: Petrol Sh190 | Diesel Sh189
• Ethiopia: Petrol Sh118 | Diesel Sh135

The price gap, particularly with Kenya, is now being cited as early validation of Uganda’s controversial decision to restructure its fuel import system by sidelining private oil marketing companies from direct procurement.

Under the new model, all fuel imports are handled centrally by the Uganda National Oil Company (UNOC), which has contracted global energy trader Vitol to manage supply.

The shift, implemented earlier this year, effectively removed intermediaries that previously sourced fuel through Kenyan supply chains—cutting out multiple layers of mark-ups that had long inflated pump prices.

Uganda’s relative price stability is being attributed to two key policy shifts: centralised procurement and a differentiated tax regime.

By consolidating imports under UNOC, the government has introduced a more controlled pricing framework, where local oil marketing companies now purchase fuel domestically rather than navigating complex regional supply chains.

This has significantly reduced exposure to price distortions linked to transit, brokerage, and foreign exchange layers—costs that are often passed on to consumers.

Equally important is Uganda’s tax structure. Unlike Kenya, which applies Value Added Tax (VAT) on fuel, Uganda does not levy VAT. Instead, it relies on excise duty, which can be adjusted periodically rather than rising automatically.

This gives policymakers greater flexibility to cushion consumers during periods of global price volatility—such as the current disruptions triggered by tensions in the Middle East.

The pricing divergence is likely to reignite debate over fuel taxation and supply chain structures across East Africa.

Kenya’s liberalised system, while competitive in theory, has increasingly come under scrutiny for exposing consumers to higher and more volatile prices, particularly during global shocks.

Uganda’s model, by contrast, reflects a more interventionist approach—one that prioritises price stability and supply security, even at the cost of reduced private sector participation in procurement.

Analysts say the current crisis offers a real-world stress test of both systems. Global fuel markets have been unsettled by supply uncertainties linked to the conflict involving the United States, Israel and Iran, with concerns over potential disruptions to key shipping routes and refining capacity.

In such an environment, countries with streamlined procurement systems and flexible tax policies are better positioned to absorb shocks.

Uganda’s ability to maintain relatively lower pump prices suggests that reducing inefficiencies within the supply chain can be as important as managing global price exposure.

However, questions remain about the long-term sustainability of the model.

Centralized procurement places significant operational responsibility on UNOC, raising concerns about the risks associated with reliance on a single supplier.

There are also broader considerations around market competition and whether reduced private sector involvement could have unintended consequences over time.

Still, in the short term, the results clearly show that Uganda’s fuel pricing reforms are delivering measurable benefits at the pump.

The post Uganda fuel prices undercut Kenya as supply reforms pay off amid global disruptions appeared first on 256 Business News.

Civil society organisations have raised concerns over Uganda’s proposed tax measures for the 2026/27 financial year, warning that an overreliance on indirect taxes could raise the cost of living, slow economic activity, and disproportionately affect low-income households.

Presenting their analysis at a breakfast meeting in Kampala on April 10, stakeholders under the Civil Society Budget Advocacy Group (CSBAG) said while some proposals improve fairness, others risk undermining gains by increasing pressure on consumers and key sectors of the economy.

CSBAG welcomed the government’s proposal to raise the Pay As You Earn (PAYE) threshold from UGX 235,000 to UGX 335,000 per month, noting that it would increase disposable income for low-wage earners and make the tax system more equitable. However, the group argued that these gains could be offset by higher indirect taxes on essential goods and services.

Among the most contentious proposals is the increase in excise duty on sugar from UGX 100 to UGX 300 per kilogram, alongside a UGX 200 per litre hike on petrol and diesel. Civil society actors warn that these adjustments will likely cascade through the economy, raising transport costs and pushing up prices of basic commodities.

The planned doubling of excise duty on cement—from UGX 500 to UGX 1,000 per 50kg bag—has also drawn criticism, with CSBAG cautioning that it could further strain Uganda’s already constrained housing sector. Rising construction costs, they argue, could slow down building activity and worsen housing affordability.

Similarly, the proposal to increase the surcharge on imported second-hand clothes to 30 percent is seen as potentially disruptive. While intended to support domestic textile manufacturing, CSOs warn that the move could shrink supply in a market still heavily dependent on imports, leading to higher prices before local production capacity can fill the gap.

On the digital economy front, civil society groups expressed support for the introduction of a uniform 0.25 percent levy on cash withdrawals across the financial system. This would effectively reduce the current 0.5 percent charge on mobile money transactions while broadening the tax base to include other platforms.

They argue that although the lower rate may reduce revenue in the short term, expanding the tax net could drive long-term gains, with transaction values projected to double over the medium term. However, they stressed that this reform should be complemented by removing import duties on entry-level smartphones to accelerate digital inclusion and economic activity.

CSBAG Executive Director Julius Mukunda criticised the broader tax strategy for focusing on increasing rates within an already narrow tax base instead of significantly expanding it.

Civil society organisations further warned that continued tax exemptions in some sectors undermine revenue mobilisation efforts, effectively shifting the burden onto ordinary taxpayers. At the same time, they noted that targeted “sin taxes” and improved enforcement could boost revenue while supporting public health objectives if carefully implemented.

Ultimately, the groups say the central challenge for policymakers is balancing revenue mobilisation with fairness and economic growth. Without adequate safeguards, they caution, the current proposals risk widening inequality and slowing Uganda’s post-pandemic recovery.

“The key question is whether Uganda can balance revenue collection with fairness and economic growth?” Mukunda observed.  “A more sustainable path may lie in widening the tax base, improving compliance, and protecting low-income households.”

The post Civil society warns Uganda’s 2026/27 tax plan may deepen inequality, slow key sectors appeared first on 256 Business News.

A new partnership between UN Women and Equity Bank Uganda is bringing renewed focus on the distance between financial access and meaningful economic participation for women; a persistent gap in Uganda’s growth story.

Signed this week in Kampala, the two-year collaboration running from April 2026–March 2028, is designed to expand women’s access to financial services while pairing that access with skills, enterprise support and clean energy financing. The initiative will target underserved groups, including women in refugee-hosting communities, where economic vulnerability is often most acute.

At one level, the partnership plays on the familiar development template of providing credit, training and market access. But its structure also signals a more deliberate shift toward tackling the layered nature of financial exclusion, where access alone has often proved insufficient.

“This partnership reflects our shared commitment to ensuring that women—especially those in underserved and vulnerable communities—have the tools, resources, and opportunities to thrive economically,” said Adekemi Ndieli, UN Women Deputy Country Representative in Uganda. “By working together, we can accelerate progress toward inclusive growth and sustainable development.”

The emphasis on combining finance with capability—financial literacy, digital skills and entrepreneurship training reinforces a growing recognition among policymakers and lenders that traditional banking models have struggled to fully integrate women operating in informal and rural economies.

For Equity Bank Uganda, the partnership dovetails into the lenders social agenda that has for long approached inclusion, less as a compliance obligation and more as a growth frontier.

“Equity Bank Uganda is proud to partner with UN Women to dismantle barriers that prevent women from achieving economic autonomy,” said Equity Bank Uganda Managing Director Gift Shoko. “Our commitment goes beyond financial products; we are offering training, digital literacy and clean energy solutions to ensure women can compete and succeed in today’s economy.”

Uganda’s financial inclusion rates have improved in recent years, driven by mobile money and agency banking. Yet disparities remain pronounced, particularly for women in agriculture and informal trade, where access to credit, markets and formal financial tools remains uneven.

The partnership’s focus on women-led agribusinesses and cooperatives points to an attempt to bridge that gap by linking finance to productive sectors where women are already dominant but undercapitalised.

UN Women will provide technical expertise, community mobilization, and policy support, while Equity Bank Uganda will offer tailored financial products, training and advisory services. The partnership will be implemented through a jointly developed work plan with clear targets and measurable impact.

According to the partners, the initiatives implemented under this pact are expected to benefit thousands of women across Uganda by enabling them to access inclusive financial services, expand their economic opportunities, and strengthen their capacity to contribute to inclusive and sustainable development. This includes supporting women’s participation in national and regional markets under the African Continental Free Trade Area (AfCFTA), which has the potential to unlock greater market access, scale women led enterprises, and amplify women’s role as drivers of regional economic growth.

By aligning with opportunities under the African Continental Free Trade Area, the initiative positions women not just as local entrepreneurs but as potential participants in cross-border trade—an area where scale and competitiveness have historically been constrained by limited access to finance and information.

Equally notable is the integration of clean energy financing into the programme. For many low-income households and small enterprises, energy access remains a critical bottleneck, affecting productivity and costs. Linking financing to energy solutions could, analysts say, unlock incremental gains in both household welfare and business performance.

Shoko framed the effort in broader economic terms: “We believe inclusive finance is the foundation of inclusive growth. Together, we will empower women to transform their enterprises and their communities.”

For development actors, that framing underscores a 360-degree shift from viewing women as beneficiaries of inclusion to recognising them as drivers of economic expansion.

The post UN Women, Equity Bank chart new path in push for women’s economic inclusion appeared first on 256 Business News.

Airports worldwide are facing a new headache as operational bottlenecks persist despite billions being invested in expanding terminals, runways and gates. Global aviation IT provider SITA, says the disconnect points to a deeper structural challenge within modern airport ecosystems, where performance is increasingly shaped not by physical capacity but by how effectively operations are coordinated across stakeholders and systems.

In a new whitepaper, SITA suggests that the problem lies less in physical capacity and more in how effectively airport systems and stakeholders work together.

The report argues that airport performance is increasingly constrained by fragmented decision-making rather than infrastructure gaps. As passenger traffic grows and airport ecosystems become more complex, misaligned operations across airlines, ground handlers, security, and air traffic control are emerging as the primary source of inefficiency.

At the core of the analysis is the concept of Total Airport Management (TAM)—a model that integrates real-time data, predictive analytics and coordinated decision-making across all operational stakeholders. Rather than optimising isolated processes such as check-in or boarding, TAM seeks to align the entire system, enabling earlier responses to disruptions and more efficient use of existing infrastructure.

This shift comes at a time when disruption remains widespread. Data from AirHelp indicates that nearly a quarter of global passengers experienced delays or cancellations in the first half of 2025, underscoring how operational breakdowns ripple across interconnected systems.

The whitepaper identifies three structural challenges that continue to undermine airport performance.

First, siloed performance metrics create unintended consequences. When departments focus narrowly on their own key performance indicators—whether in security, check-in, or gate operations—delays are often pushed downstream rather than resolved. A backlog at security, for example, may simply shift congestion to boarding gates, amplifying disruption across the network.

Second, visibility without coordination limits impact. While many airports now operate sophisticated control rooms and dashboards, simply observing real-time data does not automatically translate into better decisions. Performance improves when stakeholders act on a shared operational picture, supported by predictive insights that anticipate how situations will evolve.

This principle underpins Airport Collaborative Decision Making (A-CDM), a framework promoted by organizations such as Airports Council International, International Air Transport Association, International Civil Aviation Organization and Civil Air Navigation Services Organisation. By aligning stakeholders around shared data and objectives, A-CDM has become a global benchmark for improving operational efficiency.

Third, digital transformation must coexist with live operations. Airports cannot simply replace legacy systems that underpin daily activity. Instead, the report advocates layering intelligent coordination tools on top of existing infrastructure—creating a “single source of truth” that enables better planning, faster decision-making and more effective resource allocation.

Case study in coordination

The approach is already being tested in practice. In Abu Dhabi, a shared operational data platform integrates inputs from airlines, ground handlers, air traffic control and government agencies. By aligning decisions earlier in the operational cycle, the system aims to strengthen resilience, improve on-time performance and support long-term growth without requiring immediate physical expansion.

Industry executives say the implications are significant. Rather than relying solely on costly infrastructure projects, airports could unlock “hidden capacity” by improving coordination—reducing delays and smoothing passenger flows using existing assets.

The findings reflect a broader shift in aviation strategy. As demand recovers and expands, particularly in emerging markets, airports are under pressure to handle higher volumes without proportionate increases in cost or footprint.

According to SITA, the key lies in anticipating disruptions before they escalate. Predictive analytics can identify pressure points—such as incoming delays, congestion risks or staffing constraints—allowing operators to intervene earlier and prevent cascading effects across the system.

The message for airport operators is clear: infrastructure investment remains necessary, but it is no longer sufficient. Performance gains will increasingly depend on how well airports function as integrated systems rather than collections of independent units.

For passengers, the outcome could be fewer delays, smoother connections and more reliable journeys. For the industry, it signals a recalibration of priorities, where digital coordination becomes as critical as physical expansion.

The post Airports advised to prioritise coordination over infrastructure as performance bottlenecks shift appeared first on 256 Business News.

This poses a macroeconomic risk for many African nations, including Uganda, because of being net importers of critical goods notably fuel which are globally priced in dollars. When the dollar strengthens, local currencies depreciate which also tends to trigger inflationary pressures by driving up the domestic cost of living. Speaking in Tokyo, the International Monetary Fund Managing Director Kristalina Georgieva, has advised policymakers to prepare for the unthinkable.

Giving the keynote address at Japan’s Ministry of Finance’s ‘Future of the Global Economy amid a Fluid International Economic and Monetary Order’ Symposium she said, “Energy security has shot up the list of concerns. If the new conflict proves prolonged, it has clear and obvious potential to affect market sentiment, growth, and inflation, placing new demands on policymakers.

And if, as we all hope, the conflict ends soon, then be sure that, before long, some new shock will come. My advice to policymakers everywhere in this new global environment: think of the unthinkable and prepare for it.”

In early February, commenting on the Uganda’s inflation outlook for the near term, Michael Atingi-Ego, the central bank Governor said, “External factors that could exert higher-than-anticipated inflationary pressures include a persistently depreciated exchange rate, escalating geopolitical tensions that could disrupt global supply chains, and adverse weather conditions that could reduce agricultural output and raise food prices.”

In confronting the unthinkable, Georgieva said, “Yes, but how? By focusing on what you can control. Three pieces of advice–one, invest in strong institutions and policy frameworks to underpin strong economies and private sector-led growth. Two, use policy space when needed and be sure to replenish it. Three—above all—be agile.”

She said, “One core role for public authorities is to provide a guiding hand—ensuring forward-leaning, economy-wide responses to transformative forces; regulating wisely, not unduly; and providing the institutional bedrock for the private sector to flourish. As most emerging market economies have learned in recent years, it pays off—in better growth and inflation outcomes—to have independent central banks, fiscal rules, and other policy frameworks.”

Acknowledging that the private sector tends to be more agile than governments Georgieva said, “We see this in the way trade policy shocks and the forces of geopolitics more broadly are combining to deliver a private sector-led global reconfiguration of trade. But governments also need to show greater agility in an uncertain and fluid world—seeing not only challenges, but also opportunities. One obvious example: regional integration.”

She said central banks have mandates that set their broad direction—be it an inflation target or a currency peg—but, beyond that, must always be attentive to the data in deciding how to use their policy space.

The post IMF boss tells policymakers to prepare for unthinkable appeared first on 256 Business News.

CSOs have raised fresh concerns over Uganda’s fiscal discipline and service delivery, warning that rising public debt, mounting domestic arrears and inefficient public investments could undermine economic stability and strain public services if urgent reforms are not undertaken.

In a thematic review of the 2025 Auditor General’s report, the Civil Society Budget Advocacy Group (CSBAG) said the audit findings reveal deep structural weaknesses in public financial management, including pressure on health financing, education infrastructure gaps, and poor performance by some state-owned enterprises.

Presenting the analysis in Ntinda on March 8, CSBAG Executive Director Julius Mukunda urged government and Parliament to treat the audit findings as an opportunity to restore fiscal discipline and improve accountability in the management of public resources.

“The findings of the Auditor General demand more than acknowledgement—they require decisive corrective action,” Mukunda observed. “Sustained fiscal credibility and improved service delivery will only be achieved if reforms are implemented with discipline, consistency and accountability.”

According to the review, Uganda’s public debt has grown sharply over the past five years, rising from UGX 69.2 trillion in FY2020/21 to UGX 115.4 trillion in FY2024/25, a 66.7 percent increase.

The country’s debt-to-GDP ratio now stands at 50.29 percent, lapping at the 51.2 percent ceiling set under the Charter for Fiscal Responsibility.

Even more concerning, the CSOs say, is the rising cost of servicing that debt. Interest payments now account for 23.66 percent of domestic revenue, almost double the government’s benchmark of 12.5 percent.

“This means that for every UGX100 collected in domestic revenue, about UGX24 is spent on interest payments alone,” the report notes, warning that the trend is shrinking fiscal space for key sectors such as health, education, agriculture and infrastructure.

Domestic borrowing has also surged, increasing from UGX39.16 trillion in June 2024 to UGX59.02 trillion in June 2025, now accounting for more than half of Uganda’s public debt.

While domestic financing reduces exposure to exchange rate volatility, Mukunda said it carries higher interest costs and risks crowding out private sector credit.

Revenue mobilisation still weak

Despite improvements in tax collection, Uganda’s revenue effort remains weak relative to the size of the economy.

Domestic revenue rose from UGX22.1 trillion in FY2021/22 to UGX32.36 trillion in FY2024/25, a 46 percent increase, but the tax-to-GDP ratio remains stuck at 13.4 percent.

This is below the 15 percent benchmark for developing economies, the 18.6 percent Sub-Saharan Africa average, and far below the 23 percent global average CSBAG says.

The audit also shows that only 48 percent of the 5.25 million registered taxpayers actually contribute revenue, leaving more than 2.7 million taxpayers inactive.

In addition, the structure of taxation remains uneven.

Agriculture contributes 26.1 percent of GDP but only 1.63 percent of tax revenue, while trade and manufacturing sectors contribute disproportionately larger shares of tax relative to their economic output.

Mukunda argues that the sector could pull its weight if taxes were applied to its midstream and downstream activities such as bulk trade in agricultural produce.

As it is, eschewing taxation on agriculture has resulted in an inordinate tax burden on a small pool of tax payers such as workers in formal employment. The government has recently proposed raising the PAYE rate to 40 percent, a move likely to impose more pain on salaried employees.

However, the adoption of digital tax systems has produced some positive results, CSBAG said.

The rollout of the Electronic Fiscal Receipting and Invoicing System (EFRIS) has helped increase VAT collections by 56 percent, rising from UGX5.01 trillion in FY2019/20 to UGX8.78 trillion in FY2024/25.

Another major concern highlighted by CSBAG is the rapid growth of domestic arrears owed by government to suppliers and contractors.

These arrears rose from UGX3.33 trillion in 2019 to UGX13.8 trillion in 2024, before dropping to UGX8.4 trillion in 2025 after a restructuring of government borrowing from the central bank.

CSBAG notes though, that the reduction was largely technical rather than reflecting actual payment of outstanding obligations by the government because the obligations were deferred by converting part of the outstanding into long tenure bonds.

The continued accumulation of arrears is putting pressure on businesses that depend on government contracts.

“It constrains private sector liquidity and increases procurement costs as suppliers factor payment uncertainty into pricing,” the review notes.

Health and education systems under strain

The audit findings also reveal serious funding and operational gaps in key social sectors.

In health, the National Medical Stores required UGX1.574 trillion to meet national demand for medicines in FY2024/25 but received UGX1.393 trillion, leaving an 11 percent funding gap.

At Mulago National Referral Hospital, the shortfall was even more severe, with only UGX18.25 billion provided against a need of UGX72.4 billion for specialised medicines.

The health system is also heavily dependent on development partners, which financed 64.3 percent of essential medicines in FY2024/25.

With about US$312.8 million in donor funding expected to be withdrawn starting FY2025/26, analysts warn that Uganda risks worsening drug shortages unless domestic funding increases.

Meanwhile, the audit exposed widespread infrastructure gaps in secondary schools under the Universal Secondary Education programme.

Inspections found that 136 schools lacked science laboratories, 182 had no libraries, and 380 schools had inadequate classroom facilities, leading to overcrowding.

Teacher shortages also persist, with only 65 percent of required secondary school teaching positions filled, forcing schools to recruit additional staff locally and accumulate salary arrears.

Weak performance in public investments and SOEs

The review also flagged inefficiencies in major public investments and state-owned enterprises.

Among the entities reporting significant losses were the Uganda Electricity Transmission Company Limited, Uganda Broadcasting Corporation and Uganda Airlines.

Uganda Airlines alone received UGX1.984 trillion in government funding in FY2024/25, yet continues to face financial and operational challenges, including grounded aircraft and procurement irregularities cited in the audit.

Energy infrastructure has also been underutilised. The Karuma Hydropower Plant is operating at only 30 percent of its installed capacity, while the Namanve Thermal Power Plant is running below capacity due to maintenance delays.

Environmental and land governance concerns

Environmental management also emerged as a major concern, with the audit showing that wetland encroachment and degradation remain widespread.

Only 739 kilometres of wetlands were demarcated over three years, representing just 18 percent of the planned target, largely due to funding shortages.

Land administration challenges are also slowing public infrastructure projects, with 30 percent of land registration applications still pending and major delays in issuing land titles for government projects.

CSBAG urged government to strengthen fiscal discipline, enforce compliance with procurement and budgeting rules, and improve oversight of public investments.

The collective also called for better implementation of affirmative procurement policies meant to allocate 15 percent of government contracts to women, youth and persons with disabilities, noting that none of the audited entities fully complied with the requirement.

“Public financial management reforms must translate into tangible improvements in service delivery,” Mukunda said. “Every shilling counts.”

The post CSOs warn rising debt, arrears and weak public investment threaten Uganda’s fiscal stability appeared first on 256 Business News.

Uganda has recorded a dramatic quantitative and qualitative leap in export performance over the past five years, with total export earnings rising to USD13.4 billion in 2025 and manufactured exports now exceeding USD1 billion annually.

The figures were unveiled on March 4 at the National Trade Review Conference held at the Speke Resort Convention Centre in Munyonyo, where senior government officials, Members of Parliament, development partners and private sector leaders gathered to assess the country’s trade trajectory.

Addressing the conference, Trade Minister Fred Mwebesa said export earnings have expanded from about USD5 billion in 2020 to USD13.4 billion in 2025 — an increase of more than 160 percent.

The 2025 growth was driven primarily by gold exports, which reached USD6.4 billion, while coffee brought in USD2.2 billion, consolidating Uganda’s position as Africa’s leading coffee exporter.

Services have also become a significant contributor. Tourism and transport services generated over USD2.5 billion, underscoring the growing importance of non-merchandise exports.

Crucially, manufactured exports now account for a growing share of foreign exchange earnings. Cement, steel, pharmaceuticals and processed foods collectively contribute more than USD1 billion annually, lifting manufactured exports to 7.5 percent of total export revenues in 2025.

“These achievements demonstrate Uganda’s steady transition toward export diversification, increased value addition and a more resilient export sector,” Mwebesa said.

Government has positioned trade at the core of its Ten-Fold Growth Strategy, which seeks to expand the economy to $500 billion by 2040.

The Revised National Trade Policy and the National Export Development Strategy (NEDS) have been aligned with the Fourth National Development Plan (NDP IV), which integrates trade into a broader structural transformation agenda built around Agro-Industrialisation, Tourism Development, Mineral Beneficiation, and Science, Technology and Innovation.

Officials framed the surge not as an isolated performance spike, but as the outcome of sustained policy interventions aimed at export diversification, industrialisation, value addition and improved competitiveness. Revised trade instruments — including the National Trade Policy and the National Export Development Strategy — have been aligned with the Fourth National Development Plan (NDP IV) and the government’s Ten-Fold Growth Strategy, which seeks to expand the economy to USD500 billion by 2040.

Under NDP IV, trade is embedded within a broader structural transformation agenda centred on agro-industrialisation, tourism development, mineral beneficiation, and science, technology and innovation. The plan envisions a stronger manufacturing base, with Manufacturing Value Added projected to rise from 16 percent of GDP to 20 percent by the end of the decade. Industrial capacity utilisation is expected to double from 30 percent to 60 percent, while the share of manufactured exports is targeted to expand steadily in tandem with a growing domestic market for locally produced goods.

Parallel to export expansion, Uganda has intensified its import substitution drive. Investments in industrial parks, strengthened standards enforcement, improved quality assurance and enhanced access to finance have enabled domestic manufacturers to scale up production and compete more effectively with imports. Locally produced cement, iron and steel products, pharmaceuticals, textiles, edible oils, sugar, dairy products and processed foods are increasingly meeting domestic demand while also finding regional markets. The expansion of steel mills, cement factories and agro-processing facilities reflects what officials describe as the steady construction of more resilient value chains.

Permanent Secretary Lynette Bagonza emphasised that while exports have grown over the past five years, imports have also increased — from USD7.5 billion to USD15.7 billion. Yet much of this import growth consists of industrial machinery, fuel, pharmaceuticals and raw materials that support production and infrastructure development. In this sense, she argued, a significant share of imports represents investment in future productive capacity rather than pure consumption.

Regionally, Uganda’s trade footprint continues to deepen. Approximately 38 percent of exports are destined for markets within the region, with the Middle East accounting for 26 percent, Asia 20 percent and the European Union 13 percent. More than 70 percent of Uganda’s manufactured exports are absorbed by regional markets, underscoring the importance of regional integration as a launch pad for industrial growth. Exports to COMESA have risen markedly over the past five years, while intra-East African Community trade has expanded in tandem, reinforcing Uganda’s position within continental value chains.

Yet alongside celebration, there was also a note of challenge. The British High Commissioner, Lisa Chesney, acknowledged Uganda’s export expansion but urged policymakers and businesses to confront the “last mile” of trade policy implementation. Preferential schemes and free trade agreements, she noted, often deliver less than their promise because firms lack information, coordination or institutional support to take full advantage of them. Opportunities under the African Continental Free Trade Area, expanded dairy access to North African markets, and tariff-free access under the UK’s Developing Countries Trading Scheme illustrate potential that remains partially untapped.

Her message highlighted the need for implementation discipline to match policy ambition if Uganda is to achieve its ambitious ten-fold growth strategy.

Structural constraints remain. Approximately 72 percent of enterprises operate informally, limiting their access to finance, technology and international markets. Key export sectors such as coffee, cocoa and sugar continue to grapple with limited value addition and quality challenges. At the same time, global trade is increasingly shaped by geopolitical tensions and supply chain disruptions, underscoring the need for diversification and resilience.

Still, the tone of the conference was forward-looking. Officials expressed confidence that the strong export momentum of recent years provides a foundation for accelerated transformation. The task now is to deepen regional integration, leverage continental frameworks such as AfCFTA, strengthen standards and quality infrastructure, formalise and empower MSMEs, and attract investment into export-oriented industries.

Uganda’s export story has moved beyond raw volumes toward questions of composition, competitiveness and resilience. The figures unveiled in Munyonyo suggest that trade is no longer merely supporting growth but is becoming the bridge between domestic production and global opportunity.

The post Uganda’s export surge signals shift toward industrial depth and trade resilience appeared first on 256 Business News.