Uganda’s Economy Expected to Grow 8% Amid Oil and Infrastructure Investments, Says BoU
BOU Governor Dr. Michael Atingi-Ego
The Bank of Uganda (BoU) has projected Uganda’s economy to grow by about 8 percent in the medium term, citing strong government spending, oil and infrastructure investments, and growing private sector activity as key drivers.
Speaking during the February Monetary Policy Statement in Kampala, BoU Governor Dr. Michael Atingi-Ego said that while the outlook is positive, risks remain, largely from global factors such as geopolitical tensions, potential trade disruptions, and rising commodity prices, particularly oil.
“Notwithstanding the favourable outlook, risks to the growth projection are tilted to the downside,” Dr. Atingi-Ego noted, adding that stronger-than-expected investment in the extractive sector and easing of global trade tensions could push growth even higher.
The Central Bank has kept the Central Bank Rate (CBR) unchanged at 9.75 percent for the 14th consecutive month, aiming to maintain price stability, support steady economic growth, and prevent sharp economic fluctuations.
Uganda’s economy recorded an average growth of 6.3 percent in the first three quarters of 2025, mainly driven by government spending, which grew by 22.8 percent, and household spending, which grew by 14.2 percent. Growth for the 2025/26 financial year is projected at 6.5 to 7 percent.
On inflation, Dr. Atingi-Ego said the outlook has been revised downward due to modest appreciation of the shilling and lower international oil and food prices. Inflation is expected to remain slightly below the BoU target in 2026, within 3.8 to 4.3 percent, before stabilising over the medium term.
The governor emphasised that future monetary policy decisions will remain data-driven, guided by domestic and global economic developments.
The BoU forecast aligns with the International Monetary Fund’s January 19 World Economic Outlook, which projects global growth at 3.3 percent in 2026 and 3.2 percent in 2027, supported by technology investments, fiscal and monetary support, and private sector adaptability.
Dr. Atingi-Ego concluded that prudent economic management, coupled with strategic investments in oil, infrastructure, and government programs, positions Uganda for sustained growth despite potential global headwinds.
