Business conditions improve in Uganda — report

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There is increased confidence amongst private sector players about doing business in Uganda, according to the finance ministry's report on the performance of the economy for February 2025.

It said economic activity improved last month as reflected by the high-frequency indicators such as the Purchasing Managers’ Index (PMI).

The PMI increased to 52.6 in February, up from 49.5 recorded the previous month, signifying an improvement in business conditions.

Similarly, the report said the Composite Index of Economic Activity (CIEA) increased to 169.20 in January 2025 from 168.10 in December 2024, reflecting continued economic growth.

CIEA is constructed using seven variables — private consumption estimated by value-added tax and private investment estimated by gross extension of private sector credit.

Other variables are; government consumption estimated by its current expenditure, government investment estimated by its development expenditure, excise duty, exports and imports.

Perceptions about doing business remained optimistic as measured by the Business Tendency Index, which registered an increase of 59.49 in February from 58.27 recorded a month earlier.

The report said this increase pointed to increased confidence amongst private sector players about doing business.

Optimism was registered among all the monitored sectors following higher consumer demand registered during the month.

In February, annual headline inflation remained within the target levels, despite an increase to 3.7 per cent from 3.6 per cent the previous month.

This was largely attributed to an increase in annual food crops and related items inflation recorded at 4.3 per cent in the year ending February from 0.2 per cent recorded in January.

On the contrary, annual core inflation declined to 3.9 per cent in February, from 4.2 per cent the previous month driven by notable price declines for education services, and passenger transport (by road) services.