Cheers and fears as Uganda braces for transition from LDC status

September 25, 2025 in Business, Policy by Editor

Uganda is edging closer to a historic graduation from the United Nations’ Least Developed Country (LDC) category, a move, hailed by officials as proof of progress, but which is stirring both celebration and unease across different sectors of society.

From October 2–3, the Ministry of Trade, Industry and Cooperatives, in partnership with the UN, will convene a high-level National Workshop on “Enhancing Trade Resilience” at Four Points by Sheraton, Kampala. The gathering will unite senior government leaders, UN dignitaries, private sector executives, civil society actors, and researchers to strategise on how Uganda can sustain its growth beyond the LDC threshold.

Uganda first met the UN’s development criteria for graduation in March 2024. The next crucial review is set for 2027, with full graduation projected around 2030.

“This workshop is about proactive planning, bringing all stakeholders together to build a competitive and durable trade sector,” said Lynette Bagonza, Permanent Secretary at the Ministry of Trade. “Trade resilience is key to ensuring that Uganda not only meets the graduation criteria but thrives in the post-graduation environment.”

Officials argue that graduation underscores Uganda’s rising economic stature and opens the door to new opportunities. The workshop will focus on diversifying exports, investing in value addition, upgrading trade infrastructure, and seizing continental opportunities through the African Continental Free Trade Area (AfCFTA).

Key strategies under discussion include digital trade for SMEs, strengthening quality certification for exports, and expanding access to finance—all pillars of Uganda’s Smooth Transition Strategy.

The Perils

Yet beneath the optimism, unease is growing. Analysts warn that graduation comes with heavy trade-offs, including the loss of preferential access to markets such as the EU’s “Everything But Arms” scheme, the end of concessional financing, and reduced flexibility to host pharmaceutical manufacturing under patent waivers.

“In a country where you have a high Gini coefficient, wide income disparity, the social cost is monstrous,” one commentator cautioned, pointing to unrest in neighboring Kenya as an example of transition pains.

Another observer was blunter: “It’s like being told you are a rich man and must now wear a suit daily, yet you can’t afford dry cleaning. Our efforts to get into export markets will attract tariffs where we paid none, and higher duties where we paid less.”

Others framed the moment politically: “The government must be happy. President Museveni has been stubbornly declaring us middle income for a decade. It’s now here.”

Government voices counter that the transition is neither sudden nor irreversible. Khadija Nakakande, spokesperson for the Ministry of Trade, emphasized that Uganda has nearly a decade to prepare.

“If Uganda keeps her development trajectory, confirmation for graduation will be in 2032. If a country backtracks, you are taken back to the LDC category,” she said. “There’s a lot to lose, but we should be positive because we are moving at a higher level. The focus must be on empowering our private sector to be competitive.”

Nakakande also noted Uganda is not alone: “Kenya is already there. Tanzania and Rwanda received the same notification. They are also graduating from the LDC category.”

As the October workshop looms, for some, graduation signals progress and pride but for others, it threatens to magnify inequality and economic vulnerability. The real test will be the extent to which the country can turn symbolic advancement into tangible, inclusive prosperity.