Uganda leans on agro industry and budget control to keep growth on track
Uganda plans to sustain economic growth above six percent by tightening spending and pushing agro industry as climate risks and debt costs rise.
UGANDA – Uganda is setting its sights on steady economic growth by keeping a tight grip on public spending while putting agriculture at the center of its long term plans, according to a new World Bank outlook released this week.
The World Bank estimates that Uganda’s economy grew by 6.3 percent in the 2024/25 financial year, up from 6.1 percent the year before. The bank expects growth to stay above six percent through the medium term, supported by local demand, investment, and better trade balances.
A World Bank economist said the recent gains give policymakers some room to act but warned against complacency. “Uganda has built solid momentum, but that momentum depends on careful budget choices and steady reform,” the economist said.
Low inflation continues to support household spending as incomes recover. Agriculture, industry, and services all play a role, with food production holding up, factories expanding at a measured pace, and tourism continuing its rebound.
Stable global commodity prices and cautious monetary policy help keep price pressure in check, which supports business planning.
Poverty trends and fiscal pressure
The World Bank projects that poverty levels will keep falling through 2026 and 2027, extending a recovery that began as growth strengthened. Officials still face pressure on the budget as debt servicing costs remain high and deficits narrow only slowly.
Uganda’s 2025/26 budget points to stricter spending control and stronger local revenue collection. The government plans to direct more funds to education, health, and infrastructure while working to rebuild fiscal buffers.
A senior official at the finance ministry said the goal is balance. “We want to protect growth while restoring discipline in public finances,” the official said. “That balance matters for confidence and long term stability.”
Over time, external and fiscal positions should improve as election spending eases, exports stay firm, and foreign investment remains steady. Oil revenues could start flowing from 2027, which could ease funding pressure if authorities manage them with care.
Agriculture and climate risks
Risks to the outlook remain. Delays in oil projects, slower reform progress, or tighter global financial conditions could weigh on growth. Climate shocks pose a growing threat as droughts, floods, and pests affect farm output in a country where many low income households rely on rain fed farming.
That exposure explains Uganda’s focus on agro industry. Agriculture employs most of the workforce and supports exports, yet productivity lags behind regional peers. The World Bank says progress depends on wider use of modern inputs, climate smart practices, irrigation, and better rural roads, power, and digital links.
Access to finance remains a key challenge. Officials and partners aim to expand blended finance, insurance, and value chain lending, often through digital tools that cut risk and cost.
Uganda’s path forward combines optimism with caution. Growth looks set to stay strong and poverty trends point downward. The outcome will rest on fiscal discipline and the country’s ability to turn agro industry plans into real investment and jobs.
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