By Tumwine Byaruhanga
Uganda’s economy registered improved performance in April 2026, supported by stronger business activity, rising exports and a stable shilling, according to the latest Performance of the Economy Report.
The report shows that the Purchasing Managers’ Index (PMI), a key indicator of economic activity, rose to 55.0 in April from 54.3 in March, signaling continued expansion in private sector activity. The growth was largely driven by increased output, higher employment levels and stronger customer demand.
Business confidence also remained positive during the month, with the Business Tendency Index (BTI) standing at 55.8, above the 50-point threshold that signals optimism in the economy. Investors cited rising order volumes, expected employment growth and increased activity across sectors as key drivers of confidence.
Headline inflation edged up slightly to 3.0 percent in April from 2.8 percent in March, mainly due to higher fuel and transport costs linked to rising global oil prices and geopolitical tensions.
However, government interventions through centralized fuel imports by Uganda National Oil Company (UNOC) and management of strategic fuel reserves in Jinja helped keep local pump prices relatively stable compared to other East African countries.
The Ugandan shilling also strengthened during the month, appreciating by 0.4 percent against the US dollar to an average of Shs 3,716.70. The appreciation was attributed to increased foreign exchange inflows from exports and portfolio investments, which outweighed demand from the manufacturing and energy sectors.
Bank of Uganda maintained the Central Bank Rate at 9.75 percent, saying the current monetary policy stance remains appropriate despite inflation risks linked to instability in the Middle East.
Uganda’s external trade performance also improved significantly in March 2026, with the merchandise trade deficit narrowing by 54.1 percent to USD 47.75 million compared to USD 103.92 million recorded in March last year.
Export earnings grew by 45.6 percent year-on-year to USD 1.45 billion, mainly driven by increased mineral exports. On a monthly basis, export receipts rose by 5.8 percent, supported by stronger earnings from cotton, tea and minerals.
The report points to continued resilience in Uganda’s economy amid global economic uncertainties, with growth being supported by exports, stable macroeconomic policies and sustained private sector activity.
