Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/31/2017

Uganda has a market-based economy rich in natural resources with one of the fastest growing populations in the world.  With comparative advantages in agriculture and one of the largest oil reserves in the region, Uganda is seeing increasing interest among foreign investors.  More U.S. companies are investing in Uganda and setting up local and regional operations to take advantage of Uganda’s economic growth potential.

According to the Uganda Bureau of Statistics, Uganda’s 2015/2016 gross domestic product (GDP) was $23.1 billion (assuming a UGX 3650 to $1 exchange rate), with GDP per capita of $754.  The Ugandan economy grew by 0.8 percent in in the second quarter of 2016/2017, after achieving 4.8 percent growth in FY 2015/2016.  The Government of Uganda (GOU) predicts that economic growth will drop to 4 percent in FY 2017/18 due to global macroeconomic factors and a sluggish recovery from the national elections in 2016.  The GOU projects medium term growth for an average of 6 percent over the next five years, though the GOU’s projection assumes a timely implementation of several complex multi-billion dollar infrastructure projects in that timeframe. 

In 2015, total trade was $8.8 billion, with $2.7 billion worth of exports, and $5.6 billion worth of imports.  In 2015, Uganda’s trade deficit was $2.9 billion, a 15 percent reduction from the previous year.  Wholesale and retail trade contributed 12.2 percent of GDP. 

The service sector was the largest contributor to GDP in 2015/2016 at 48.7 percent and industry contributed about 19.8 percent.  In the same year, agriculture and fishing sectors constituted 23.6 percent of Uganda’s GDP and employed approximately 66 percent of Uganda’s population.  In 2015, of the 37.5 million people living in Uganda, 20.8 percent of the population lived on less than $2 per day. 

More information on the Uganda Bureau of Statistics (UBOS) 2015/2016 estimates for Uganda’s economy is available here:
Uganda Bureau of Statistics.

In 2015, the World Bank estimated that Foreign Direct Investment (FDI) was approximately $1.05 billion or 3.8 percent of GDP.  The UNCTAD World Investment Report shows that Uganda is one of the leading recipients of Foreign Direct Investment in the East African region.  FDI in Uganda has remained relatively high, driven by infrastructure investments.  Developments in Uganda’s oil sector are likely to increase FDI levels over the next five years. 

More information on the World Bank’s estimates for Uganda’s economy is available here:  The World Bank - Uganda.

Uganda’s budget for FY 2017/2018 is UGX 28.9 trillion ($7.9 billion) and FY 2016/17 was UGX 26.3 trillion ($7.2 billion), a 9.8 percent increase from the previous year’s budget.  The budget increase reflects in large part a growth in debt servicing costs attributed to the GOU’s prioritization to finance infrastructure projects.

The Ugandan government continues to emphasize strengthening the country's road, rail, water, energy, and communications infrastructure.  In FY 2016/17, the Ugandan Government invested more than $1.05 billion in public works and transportation projects, and plans to increase this amount by 27 percent in the 2017/2018 budget. 

More information on Uganda’s budget and budget forecasts is available here:
National Budget Framework Paper - The Republic of Uganda.

While Uganda maintains a liberal trade and foreign exchange regime, and largely adheres to IMF/World Bank programs to fight poverty, continuing reports of endemic corruption, financial mismanagement, and increasing political repression raise questions about GOU’s commitment to fostering an investor-friendly environment.  The GOU’s sluggish bureaucracy and non-transparent decision-making process hampers progress on public projects.

Uganda’s major import trading partners are India, China, Kenya, United Arab Emirates, and Japan.  Uganda’s major export trading partners are Kenya, United Arb Emirates, Rwanda, South Sudan, and the Democratic Republic of the Congo.  Political instability in the region has negatively affected Uganda’s export market.

Uganda does not yet have a Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States.
 
The top five reasons to export to Uganda include:

  1. A free-market economy, with few limits on foreign investment (outside of local content requirements in the oil and gas sector) and repatriation of funds.
  2. An English-speaking and rapidly growing consumer demographic, with a 3 percent population growth rate and a 5 percent urbanization rate.
  3. Increasing connectivity with the 160 million-person East African Community through several large-scale highway projects, the standard gauge railway, and a $4 billion oil pipeline to Tanzania.
  4. Abundant resources such as fertile agriculture land and 6.5 billion barrels of oil reserves.
  5. A relatively stable political and security environment.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Uganda Trade Development and Promotion