By Wadulo Arnold Mark
On July 14, 2026, Oxford Economics Africa released a detailed study of Uganda’s formal alcohol market, analyzing trends from 2020 to 2025. The report uses Uganda Breweries Limited (UBL) as a case study to show how regulated manufacturing connects rural farmers to national revenue goals and the government’s ambitious plan to grow the economy ten times over by 2040.
The study estimates that regulated manufacturing in this sector is a significant driver of national wealth. In the 2024/25 financial year, UBL’s value chain contributed UGX 1.127 trillion to Uganda’s Gross Value Added (GVA), which is approximately 4% of the country’s total manufacturing output.
This contribution supports an estimated 100,000 jobs across the country. While some Ugandans work directly in factories, nearly half of the economic value is created “downstream” by distributors, transporters, and staff in local bars, restaurants, and hotels. Furthermore, the industry creates a “backward linkage” to the village economy by sourcing raw materials from 35,000 small-scale Ugandan farmers who grow crops like barley and sorghum.
Over the same period, government has continued to rely on the alcoholic beverages sector as a key source of domestic revenue, implementing a series of Excise Duty reforms to support national development. In the Financial Year 2025/26, excise duty on beer produced using at least 75 percent local raw materials was harmonized to 30 percent or Shs 900 per litre to create a more consistent tax structure.
In the current Financial Year 2026/27, government further increased excise duty on selected spirits, including Uganda Waragi, Black Label, and Cognac, from Shs 1,700 to Shs 3,500 per litre, a measure expected to generate an additional Shs 85 billion in revenue.
Amos Kakunda, the Chairman of the Parliamentary Budget Committee, emphasized that this data in the report is vital for national planning. He noted that the report aligns with the government’s ATMS strategy—focusing on Agriculture, Tourism, Manufacturing, and Science/Technology
Kakunda highlighted that when a factory provides a “contract” for crops, it gives farmers the confidence to use money from the Parish Development Model (PDM) to improve their harvest, knowing they have a guaranteed buyer. He pledged to share this data with Parliament to ensure budget decisions support these linkages. However, he also warned that the high level of illicit alcohol—which grew from 65% of the market in 2021 to 67% in 2024—is a “critical point” that hurts public health and government revenue.
Ugandan spirits are taxed 18 percent higher than in Kenya and 65 percent higher than in Tanzania. Government, however, maintains that beyond raising domestic revenue, higher excise taxes also serve as a public health measure aimed at discouraging irresponsible alcohol consumption, which can undermine the productivity of the country’s workforce and negatively affect economic growth.
The Oxford Economics report used data modeling to show that if alcohol taxes rise too sharply (a 40% increase), the country could actually lose UGX 182 billion in total wealth and see 21,000 jobs disappear.
The Minister of Trade Industries and Cooperatives, Sanjay Tanna emphasized that the government is committed to a partnership with the private sector to achieve the national vision of expanding the economy to USD 500 billion by 2040. Commending the “scholarly and scientific” nature of the market assessment, Tanna underscored his reliance on such research, stating, “I cannot take any decisions without data… we need figures”.
While acknowledging the significant presence of the backyard market, he expressed a preference for the term “informal” over “illicit” and pledged government support for those seeking to transition into the regulated economy. He further encouraged formal manufacturers to deepen their local impact through import substitution and value addition, specifically pointing to the potential of a proposed molting plant and range of government to create more jobs and provide a guaranteed market for Ugandan agricultural products.
He concluded his remarks reminding stakeholders that more than 60 percent of government’s grain storage capacity remains underutilized. He encouraged manufacturers requiring storage support to engage the Ministry so that these facilities can be fully utilized to strengthen agricultural value chains and improve market opportunities for Ugandan farmers and the wider agricultural sector.
