Agriculture, trade drive Uganda’s strongest growth in years

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Uganda’s economy grew faster in the 2025/26 financial year, driven by strong performance in agriculture, construction, electricity generation, trade, and financial services, according to preliminary figures released by the Uganda Bureau of Statistics (UBOS).

The new data offers one of the clearest snapshots yet of how the economy is performing at a time when households, businesses, and policymakers are closely watching whether economic growth is translating into jobs, incomes, and improved living standards.

In a press statement issued on June 2, UBOS said Uganda’s Gross Domestic Product (GDP), the total value of goods and services produced in the country, is estimated to have expanded by 6.4% during the 2025/26 financial year, up slightly from 6.3% recorded the previous year.

The increase means the economy continued to grow despite a challenging international environment marked by slower global growth, geopolitical uncertainty, and fluctuations in commodity markets.

Perhaps more significantly, the overall size of Uganda’s economy increased to sh250.4 trillion in nominal terms, up from sh227.9 trillion in 2024/25.

For many Ugandans, GDP figures can feel distant from daily life. But economic growth matters because it provides an indication of whether businesses are expanding, investment is increasing, and productive sectors are generating more output. Sustained growth can create conditions for higher incomes, more employment opportunities, and stronger government revenues to fund public services.

The latest figures show that Uganda’s economy remains heavily driven by services, which continue to be the country’s largest economic sector.

UBOS said the services sector accounted for 42.1% of GDP in 2025/26, maintaining the same share it held the previous year.

Services include activities such as trade, transport, telecommunications, banking, tourism, hospitality, and professional services. Growth in the sector reached 5.5%, slightly higher than the 5.4% recorded in 2024/25.

Within the sector, trade emerged as one of the strongest performers, growing by 6.9%. Accommodation and food services, a key indicator of tourism and hospitality activity, expanded by 7.7% compared with 4.1% a year earlier. Financial and insurance activities also posted robust growth of 8.3%, up from 4.9% previously.

The figures suggest that consumer spending, tourism-related activity, and financial services continued to strengthen during the year.

Agriculture, which remains the backbone of livelihoods for millions of Ugandans, also recorded solid growth.

The agriculture, forestry, and fishing sector grew by 6.5%, slightly below the 6.8% recorded in the previous year.

UBOS attributed the performance largely to food crop production, which grew by 4.9%, and cash crops, which expanded by 12.1%.

That growth is particularly important because agriculture supports a large share of Uganda’s population, especially in rural areas. Stronger performance in crops can influence household incomes, food supply, export earnings, and broader economic activity.

The industrial sector also continued to expand, although at a slightly slower pace than the previous year.

Industry grew by 6.4% compared with 6.9% in 2024/25. According to UBOS, construction and electricity were among the main drivers. Construction activity expanded by 8.2%, while electricity generation and supply recorded an impressive 14.4% growth rate.

Those figures point to continued investment in infrastructure and growing energy demand as economic activity increases.

Another notable indicator was taxes on products less subsidies, which grew by 11.6% compared with 8.3% in the previous year. While technical, this measure often reflects stronger economic activity because it captures taxes generated from the production, sale, and consumption of goods and services.

The latest figures also reveal subtle shifts in the structure of Uganda’s economy.

While services remain dominant, agriculture slightly increased its contribution to GDP from 26.1% to 26.2%. Industry’s share edged down from 24.3% to 24.1%. Though small, these changes provide clues about which sectors are growing fastest and where economic momentum is emerging.

What happens next will be closely watched.

The UBOS figures are preliminary estimates, meaning they may be refined as additional data becomes available. However, they suggest that Uganda entered the final stages of the financial year with growth spread across several major sectors rather than relying on a single industry.