Economic Outlook

Uganda is one of the fastest growing countries in the world since the liberalization of its economy in 1986. Its growth is driven mainly by increased investment in value added activities in the agricultural and services sectors and government investment in public infrastructure. FDI inflow has been increasing over the past few years, mainly in the oil and gas sector.

Like most countries in Africa and in the World, Uganda suffered greatly from the COVID-19 pandemic and saw its GDP growth fall from 7.5% in 2019 to -0.5% in 2020. It is expected to grow back at 4.8% in 2021. The central bank managed to keep the inflation at 3.8% in 2020, 1% higher than 2019 but still under the 5% medium-term target. In 2019, the primary sector accounted for 22% of the GDP, the secondary sector for 27% and the services for 43%.

The primary sector is the key driver of growth, with agriculture the major source of livelihood and the main sector of employment. Small scale farms provide the majority of agricultural production, mainly in the south of the country, more fertile and prone to rainfalls. The main cash crops for export are coffee, cotton, tea, and tobacco. Food crops are numerous and various, such as maize, sweet potatoes, soybeans, cabbage, carrots, peppers, etc. The production of the major root crops, plantain banana and pulse has been steadily growing. The bulk of exports are to members of the Common Market for Eastern and Southern Africa (COMESA), and the rest to the European Union.

With nearly 20% of the country covered by lakes and rivers, fishing is another main sector of export. Around 700.000 Ugandans are involved in the fishery sector, and fish is the main source of animal protein for the population. The production volumes and export had been increasing for the past few years, but the exports have gone down by nearly 70% due to COVID-19 in 2020.

The secondary sector is mainly construction, mining and manufacturing and the service sector comprises financial, trade, transport, and telecommunication activities.

Uganda is one of the African countries where the non-performing loans have increased the most, which could on the long term hinder the recovery of the country.

Although debt levels have been rising since 2006, Uganda is currently classified as a low risk of debt distress, with a debt-to-GDP ratio at 40.8% in June 2020 (35.9% in 2019) expected to rise at 48.8% in 2021 and over 50% in 2023.

Uganda had been shifting its workforce from the agricultural sector to the industrial sector, especially in agro-processing. This structural transformation was accompanied by a decline in poverty over the last decade. Poor people remained highly vulnerable, as seen with the impacts of the pandemic. Widespread closures and job losses led back to an increase in the agricultural workforce.

The lockdowns and border closures resulted in a decrease in private consumption and public investment and the most impacted sectors were tourism and hospitality, manufacturing, retail and wholesale trade, and education, with schools closed for over 200 days (second highest in Africa after Ethiopia).

Foreign Investment

Uganda remains attractive and offers opportunities but also challenges for foreign investors. The country’s market economy, liberal trade and foreign exchange regime, ample arable land and young population makes it particularly attractive. The agricultural, construction, infrastructure, healthcare, power, and technology sectors present the best opportunities for business and investments. The country has a large reserve of recoverable oil, and the Ugandan oil sector is only emerging and is expected to start producing and exporting by 2024/2025. On the other hand, poor economic management, corruption, weak rule of law and lack of national investment in healthcare and education may impede investments.

The amendment of the Investment Act in 2019 created a One-Stop Centre for information and service transactions for investors, reducing the amount of bureaucracy needed for licenses and permits. The services offered by the Centre and the presence of regional financial institutions facilitate and support investments in the country.

Uganda is ranked 116th (out of 190) at the Doing Business ranking, 142nd (out of 180) at the Corruption Perceptions Index, 159th (out of 189) at Human Development Index. All these ranking have improved over the years.

Belgium and Uganda

The cooperation between Belgium and Uganda goes back to 1995, and a series of cooperation programs focused on the improvement of education and healthcare and the reduction of poverty in Uganda. It is the 6th biggest beneficiary of Belgian development aid in the world.

In 2020, Uganda was Belgium’s 115th client and 97th supplier. They imported mainly chemicals (37.7%), foodstuffs (21,2%) and machinery and equipment (12.9%), and exported mainly live animals (53.4%), vegetable products (43,4%) and foodstuffs (3.0%) to Belgium. The trade balance was in favor of Uganda for 10.0 million €.

Leading Sectors

The Uganda Investment Authority list the following sectors as investment opportunities and priorities in line with their National Development Plan:

  • Agro-industrialization
  • Energy, oil, and gas
  • Tourism
  • Mining and mineral beneficiation
  • ICT
  • Healthcare and Pharmaceuticals
  • Infrastructure and Construction
  • Edible oils
  • Electronics

Sectors Of Interest

Agricultural sector

Still the most important sector, employing over 70% of the population, Uganda’s agricultural potential is considered to be among the best in Africa. With 80% of the land arable, the country has the capacity to produce food to feed 200 million people, according to the FAO, but only around 35% is being cultivated. The country is among the leading producers of coffee, bananas, and oil seed crops. It is also a major producer and exporter of tea, cotton, tobacco, cereals, vegetables, etc. The sector’s growth is limited by the quality of seeds, the lack of irrigation infrastructure and the limited use of fertilizers, but also by insufficient storage facilities, high freight costs, poor post-harvest handling practices and limited knowledge of modern production practices. The country is experiencing a significant locust infestation coming from Kenya, but not yet reaching the most agricultural areas of Uganda.

There are serious investment opportunities in the sector, in production, input supply, value addition processing, export, and post-harvest handling. There is a lot of room to increase crop production and exportation.

The Investment Authority identified the following opportunities for investment in the sector:

  • Commercial farming in both crops and animal industries as well as aquaculture
  • Value addition (agro-industries, agro food industries)
  • Manufacturing of inputs such as improved seeds, fertilizers, and pesticides
  • Cold storage facilities and logistics
  • Farm machinery manufacturing and assembly
  • Packaging
  • Irrigation schemes

Energy, oil and gas

Uganda has a very sizeable hydro-, geo- and solar thermal energy capacity, but only a fraction of the potential is exploited. The country is also very rich in natural resources, with an estimated reserve of 6.5 billion barrels of oil, of which 1.2 billion are recoverable. There is an investment opportunity in a petroleum-based industrial park in Kabale Hoima.

In April 2021, the Presidents of Uganda and Tanzania and representatives of TOTAL and China National Offshore Oil Corporation (CNOOC) met to sign agreements for the construction of the East African Crude Oil Pipeline Project (EACOP). This USD 3.5 billion pipeline will bring oil from Lake Albert in Uganda to the Port of Tanga in Tanzania.

With one of the lowest electrification rates in Africa, increasing the energy production is one of the government’s priorities. The commission of the Isimba hydro power dam in 2019 and the Karuma hydro power dam, delayed to 2022 should offer a 380 MW excess of power generation capacity. Only 19% of Ugandans have access to electricity (55% in urban areas and 10% in rural areas), because of lacking transmission and distribution infrastructure and uncoordinated intra- and inter-sectoral planning.

Opportunities exist in production, especially small hydropower projects, transmission sectors, the government plans to build over 10.000 km of new transmission lines, with substations, switching stations and transformer capacity, and distribution, to develop mini grids for small communities.


Uganda is considered as a top tourist destination, especially thanks to their population of endangered mountain gorillas. Game viewing is one of the most popular tourist attractions. The country has a unique high-end eco-tourism potential.

The Investment Authority identified the following opportunities for investment in the sector:

  • Constructing high quality accommodation facilities
  • Operating tour and travel circuits
  • Development of specialized eco and community tourism facilities and faith-based tourism

Mining and mineral beneficiation

Uganda has large underexploited mineral deposits of oil, gold, tin, tungsten, beryllium, cobalt, iron, kaolin, salt, iron, glass sand, phosphates, uranium, vermiculite, and rare earth elements. Over 80% of the country has been surveyed for minerals.

The government offers various incentives for foreign investments, such as allowing foreign companies to own 100% of the business and zero-rated import taxes for all mining equipment.


Uganda is connected to the three marine fiber optic cables in the Indian Ocean and hundreds of kilometers of fiber optic cables have been laid in major cities in Uganda by Google and Facebook (through partnerships). The cost of commercial internet dropped radically since 2017. The increasing availability of internet is accompanied by an increasing demand for local data services, data security and content delivery. Additionally, the use of complementary technologies is also growing, such as IoT devices and services, especially connected devices in the agricultural sector.

Investment opportunities exist in telecommunication hardware, with a high demand in data transmission equipment, cellular and wireless telephone systems, fiber optic equipment, VSAT, voice over internet telephone, etc.

The tech and digital sector are booming in East Africa, according to a study in 2020 by the World Bank’s IFC, stating that the digital economy could represent 5.2% of Africa’s GDP by 2025. The countries of the East African Community (EAC) have committed to working together on a standardized tax regulations for the ICT sector, which should enable better deals with the global digital groups.

The World Bank just approved in June 2021 the USD 200 million Uganda Digital Acceleration Project – GovNet, to expand access to high-speed internet, improve efficiency of digital service delivery in the public sector and strengthen the digital inclusion of communities and refugees.

Healthcare and Pharmaceuticals

Due to the lack of medical infrastructure in Uganda, the demand for various medical and pharmaceutical equipment rises, such as complete management systems, ventilators, electrocardiographs, ultrasounds, lab equipment, etc. There is also a growing need for pharmaceutical manufacturing facilities, as almost the totality of Uganda’s medicines and health supplies are imported. The government offers favorable tax incentives to implement such facilities in Uganda.

Infrastructure and Construction

Infrastructure, whose funding comprising of about a third of Uganda’s total annual expenditure, is a key priority of the government. The country’s infrastructure needs remain considerable, in road, railway, air and water transport (in addition to the Energy and ICT infrastructure needs). The government is looking for strategic partners and investors for managerial, financial and technical services for their various construction projects, such as the Kabaale Industrial Park (construction of a refinery, petrochemicals industries and the Hoima International Airport).

The road network is severely overburdened, especially in and around cities, and poorly maintained, with an increasing number of car owners. Major roads are needed to accompany the government’s plan to build oil and gas industrial parks in the western part of Uganda.

Commercial and residential constructions in Uganda are also booming, with an estimated 300.000 housing units needed per year. Domestic production of the equipment and materials for large-scale infrastructure projects is also lacking and the country’s growing industries needs modern industrial zones and business centers to operate.

African Development Bank
Bank of Uganda
Belgian Foreign Trade Agency
International Trade Administration
Ministry of Agriculture, Animal Industry and Fisheries of Uganda
The World Bank
Uganda Investment Authority

Nicolas Stenger




Uganda enjoys a unique location at the heart of Sub-Saharan Africa within the East African region and is bordered by Sudan in the north, Kenya in the east, the United Republic of Tanzania in the south, Rwanda in the southwest and the Democratic Republic of Congo in the west. This land linked position, gives the country a strategic commanding base to be a regional hub for trade and investment. Because of this, Uganda enjoys pivotal trade partnerships that create a viable market for business.

Uganda is the most open country to Foreign Direct Investment within the East African region with all the sectors fully liberalized for investment and 100% foreign ownership permitted. The economy also offers free movement of capital to and from the country high returns on investment after the mandatory taxes have been paid thus making Uganda your preferred investment destination.
In Uganda, the investor is guaranteed security of investment and is protected under the Constitution of Uganda and the Investment Code 1991, as well as the major international investment related agreements / treaties to which Uganda is signatory.

With an economical growth of 7% every year and a Return on investments projected between 5% and 7%, Uganda is one of the greatest business markets to venture in and to start a business as her economy is shining and booming once again. Compared to all the other regions in Africa, Uganda quietly mushrooming into a prime investment destination, receiving the most foreign direct investment (FDI) in the last three years, according to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report as a result of her political stability and economic policies.

The government of Uganda has made efforts to ease investments and is developing an integrated electronic (on-line) system that will connect all investment relevant agencies, which will cut down on time and money spent to set up businesses. Currently, potential investors can apply for a license on-line via the UIA website and receive their license for free in 24 hours.


  1. Commercial Agriculture and Agro processing; Uganda has the unrivaled potential to be the food basket of the East African Community, as well as the Great Lakes regions, with the capacity to export processed food stuffs to the wider COMESA economic bloc if more investment is targeted at processing more of the agro products.
  2. Adding Value to Minerals; there are several unexploited and confirmed mineral deposits in Uganda. These minerals include but not limited to Iron-Ore, Phosphate, Gold, Oil & Gas, High grade tin, Zinc, Petroleum, Diamond, Limestone, Tungsten/Wolfram, Salt, Beryllium, Cobalt, Kaolin, Iron-Ore, Glass Sand, Vermiculite, Phosphates (fertilizer), Uranium and rare earth elements.

  3. Tourism; Uganda has been dubbed the ‘Pearl of Africa’ due to its strong tourism potential with lots of forests, lakes and rivers and it is estimated that 50% of the world’s population of mountain gorillas lives in Uganda. Uganda is also home to the source of the Nile, the longest and only river in the world that flows north and offers the best white-water rafting experience globally.

  4. Packaging; Many Ugandan enterprises are missing out on the opportunities in larger markets because their packaging doesn’t meet international standards. In order for Ugandan processed honey, fruit juices, mineral water, herbal medicines and chemicals, among other products to be competitive nationally, regionally and globally, the packaging has got to be quality.
  5. Pharmaceuticals; Uganda’s pharmaceutical industry presents numerous opportunities for new investors as reflected by the growing local and regional demand for medicines and health supplies. 90% of the medicines in Uganda are imported mainly from India, Kenya, Netherlands, China and Denmark.
  6. Real-estate; Uganda’s real estate is booming and you can be sure that your money is in a profitable business. There is an opportunity for profits when time comes that you will decide to sell the property. Real estate prices in the country are always affordable. However, it is best to analyze market prospects before taking steps towards investing in the real-estate industry.

For more information regarding investing in Uganda and the necessary steps to register your investment, please visit:

Agatha Muhumuza
Managing Director of APMS
Solutions Ltd in Kampala

Joris De Nocker
Head of Section Uganda