Uganda, one of East Africa’s fastest-growing economies, is facing mounting economic challenges with a recorded average GDP growth of 5–6%in the last 10 years . From inflationary pressures to structural constraints, the country’s path to industrial transformation and trade expansion remains complex.
In the last ten years, Uganda has recorded an average GDP growth of 5–6%, driven by agriculture, services, and construction. However, since 2020,the economy has faced setbacks due to COVID-19 disruptions, global price shocks, and a depreciating shilling. According to Uganda Bureau of Statistics (UBOS), in 2023, Exports of goods and services stood at 4.1 billion, a slight increase from 2022’s 3.8 billion. Imports, however, surged to 9.5 billion, widening the trade deficit to over 5 billion.
Rules of origin are very important when it comes to industrialization. The way you craft them will determine whether you industrialize or not. So that’s where the challenge is, balancing between industrialization and also getting all these things as inputs.
Jane Nalunga, Executive Director, SEATINI
Since 2020, the government has been focusing on industrialisation as a lever for transformation. The ‘Buy Uganda, Build Uganda’ programme aims to strengthen local production and reduce dependence on imports. The manufacturing sector contributed only 15% to GDP, revealing persistent reliance on low-value exports like coffee and fish. Despite these, issues such as infrastructure gaps, power supply instability , and limited access to credit continue to constrain growth.
The issue of protectionism is also there. Several countries put in place those barriers to protect their local manufacturing – and maybe as a region we need to think broader, instead of competing with each other, we need to be able to cooperate, and that’s why it is important to look at regional value chains.
Jane Nalunga, Executive Director, SEATINI
Uganda’s trade and industrial sectors hold great potential, but to realize long-term gains, there is need for stronger policy implementation, value addition, and private sector engagement. With the right investment climate and regional cooperation, Uganda could still become a manufacturing hub in East Africa.
