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KAMPALA - Investors are more optimistic about Uganda’s business environment, especially in the manufacturing and wholesale trade sectors.

“This is shown by the Business Tendency Index, which remained above the 50-mark threshold increasing to 55.57 in April 2024 from 55.54 the previous month,” a finance ministry report on the performance of the economy for April 2024, says.

The Business Tendency Index measures the level of optimism that executives have about the current and expected outlook for production, order levels, employment, prices, and access to credit.

It covers the major sectors of the economy: Construction, manufacturing, wholesale trade, agriculture and other services. The Overall Business Tendency Index above 50 indicates an improving outlook and below 50 a deteriorating outlook.

The report says key indicators measured by the index show that the business community was most optimistic about employment prospects and business conditions in the next three months pointing to a positive outlook for the economy.

“For the first time since September 2023, the indicator for employee numbers rose above the threshold of 50 from 49.30 in March to 50.90 in April 2024, implying that investors were optimistic about hiring new staff going forward,” it states.

Annual headline inflation, which is the measure of the total inflation within the economy, reduced to 3.2% in April 2024 from 3.3% in March 2024.

This, the report says, was primarily attributed to a stronger deflation in food crop prices during April 2024 when compared to the deflation recorded in March 2024.

“This implies that there was a bigger year-on-year decline in food crop prices in April 2024 when compared to the year-on-year decline in food crop prices recorded the previous month. On the contrary, energy, fuel and utilities and core inflation both increased,” it adds.