Uganda’s economy recorded a broadly positive performance in the latest review period, supported by strong growth in employment, financial markets, business activity, and external trade, according to a report by the Ministry of Finance Planning and Economic Development.
The Macroeconomic Indicators and Developments report highlights continued formalisation of the labour market, with membership in the National Social Security Fund (NSSF) increasing by 47 percent—from 2,451,422 members in FY2023/24 to 3,604,189 in FY2024/25. This growth reflects expanding formal employment and improved compliance.
Similarly, formal employment under the Pay As You Earn (PAYE) register rose by 47 percent, from 596,195 employees in January 2026 to 873,507 in February 2026. The number of migrant workers recorded by the Immigration Department also increased by 14.7 percent, pointing to growing cross-border labour mobility.
The business environment showed strong momentum, with new business registrations rising by 52 percent—from 2,464 in January 2026 to 3,746 in February 2026—signalling improved investor confidence and increased entrepreneurial activity.
Financial markets posted gains, with the Uganda Securities Exchange All-Share Index increasing by 10.3 percent, from 1,655.60 in January to 1,826.07 in February 2026, reflecting stronger market sentiment and improved equity valuations.
On the external front, Uganda’s trade deficit narrowed by 28.6 percent, from US$206.4 million in December 2025 to US$147.3 million in January 2026. This was largely driven by stronger export performance, particularly gold exports, which rose by 11 percent, and oil re-exports, which more than doubled during the period.
Overall export earnings grew by 2.1 percent, from Shs15,185 billion in Q1 FY2025/26 to Shs15,499 billion in Q2 FY2025/26. Investment activity, measured by Gross Fixed Capital Formation, also increased by 6.9 percent to Shs14,253 billion, reflecting resilience in both public and private sector investment.
Despite these gains, the report highlights emerging inflationary pressures. Food and non-alcoholic beverages inflation rose by 0.8 percent in February 2026, reversing a 0.1 percent decline recorded in January. Inflation in energy, fuels, and utilities increased by 0.6 percent, while liquid fuel prices rose by 1.0 percent, driven in part by global price volatility.
Household spending showed signs of strain, with Household Final Consumption Expenditure declining by 1.5 percent—from Shs43,102 billion in Q1 FY2025/26 to Shs42,438 billion in Q2 FY2025/26—indicating tighter consumer budgets amid rising living costs.
In the digital sector, the average cost of 1GB of data increased by 3.2 percent, from Shs2,036 in September 2025 to Shs2,102 in December 2025.
Environmental indicators also deteriorated, particularly in Kampala, where air quality worsened as particulate matter levels rose by 9.15 percent between January and February 2026. The report attributes this to hot, dry conditions that elevated pollution levels in urban areas.
On a positive note, health outcomes improved, with malaria-related deaths declining by 34 percent over the same period.
Globally, the International Monetary Fund Commodity Price Index increased by 10 percent in February 2026, signalling continued upward pressure on international commodity prices.
Overall, the ministry notes that Uganda’s economy remains on a stable growth trajectory, supported by strong labour market expansion, increased investment activity, and improved export performance, even as inflationary pressures and environmental challenges require sustained policy attention.