Uganda - Market OverviewUganda - Market Overview
Uganda boasts a market-based economy rich in natural resources, and one of the fastest and youngest 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.
In fiscal year (FY) 2017/2018, Uganda’s gross domestic product (GDP) was $ 30.37 billion, with GDP per capita of $759. The International Monetary Fund (IMF) estimates Uganda’s economy will grow by 6.3 percent in FY 2018/2019. According to the Bank of Uganda (BOU), the service sector, which comprises 52.7 percent of the economy, was the primary driver of growth, followed by the the industrial sector, which represents 18.6 percent of GDP. The agriculture sector, which employs 70 percent of the population and represents 21 percent of GDP, grew 3.8 percent. The agriculture sector is primarily based on subsistence or smallholder production, however, and per the United Nations Development Program (UNDP), about 36 percent of Uganda’s 43 million people live below the international poverty line of $1.90 per day. Uganda’s budget for FY 2019/2020 is approximately $11 billion, 11percent larger than the FY 2018/2017 budget.
Additional statistics on Uganda’s economy and budget are available from the below sources:
Uganda Bureau of Statistics – 2018 Abstract
The World Bank - Uganda
National Budget Framework Paper - Uganda
Uganda maintains a liberal trade and foreign exchange regime. Nonetheless, endemic corruption, financial mismanagement, an onerous tax regime, and increasing political repression raise questions about the government’s commitment to fostering a stable and investor-friendly environment. Mid-to-long-term political uncertainty also increases risks to foreign businesses and investors. Seventy-four-year-old incumbent President Yoweri Museveni has been in power since 1986, and changed the constitution in 2017 to enable him to run for a sixth term in 2021.
Constesting Museveni are new political challengers looking to gain support from the 80 percent of Ugandans under age 30.
In 2018, the top three countries exporting goods and services to Uganda were China ($1 billion), India ($743 million), and The United Arab Emirates ($644 million). The United States exported goods and services worth $87.4 million.
In 2018, the top three countries importing goods and services from Uganda were Kenya ($580 million), South Sudan ($355 million), and the Democratic Republic of the Congo ($204 million).
The United States imported goods and services worth $69 million from Uganda.
Although Uganda is eligible for African Growth and Opportunity Act (AGOA) benefits, its exports under AGOA remain low owing to poor export capacity. The government is in the process of preparing a new AGOA strategy aimed at boosting exports to the United States. Uganda does not have a Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with with the United States Government. The United States signed Trade and Investment Framework Agreements (TIFA) with the East African Community (EAC) in 2008, and with the Common Market for Eastern and Southern Africa (COMESA) in 2001. Uganda is a member of both EAC and COMESA regional organizations.
More information on Uganda’s trade is available here:
World Bank – World Integrated Trade Solution
U.S. Trade Representative - Uganda
The top five reasons to export to Uganda are as follows:
- Growing Free Market Economy: Uganda has averaged 4.7 percent GDP growth over the past five years, and projected to average six percent growth over the next two years.
- Substantial and Rapidly Growing Consumer Market: Uganda’s population of 43 million people is growing at a rate of three percent per year, with half of the population under the age of 15.
- Dynamic Agricultural Market: Uganda has abundant fertile land, favorable weather, and bimodal production throughout most of the country.
- Emerging Oil Industry: Uganda has an estimated 1.4 billion barrels of recoverable oil, and the government projects oil production will begin in approximately 2023.
- EAC Customs Union: Uganda’s membership to the EAC Customs Union enables duty free exports to the 160 million-person EAC market, as well as duty free exports of a wide range of goods to the United States via the AGOA and the Generalized System of Preferences.