By David Rupiny
According to the Performance of the Economy Report of April 2026, economic activity continued to improve, with the Purchasing Managers’ Index (PMI), a high-frequency indicator of economic activity, increasing from 54.3 in March 2026 to 55.0 in April 2026.
The improvement was mainly driven by sustained expansions in output and employment, due to increased customer demand (new orders). Sentiments about doing business in Uganda remained positive during the month, as reflected in the Business Tendency Index (BTI), which remained above the 50-mark threshold at 55.8 in April 2026.
Investors mainly expressed positive sentiments about increasing demand as indicated by an increase in order volumes, expected employment, and competition within the various sectors.
Annual headline inflation increased to 3.0 percent in April 2026 from 2.8 percent in March, mainly due to higher domestic fuel prices and related increases in transport costs. Fuel prices rose following continued increases in international oil prices driven by global geopolitical tensions.
The impact of rising global oil prices was, however, moderated by government efforts to ensure a stable fuel supply through centralized fuel imports by Uganda National Oil Company (UNOC) and the management of strategic fuel reserves in Jinja. As a result, fuel pump prices in Uganda remained relatively stable and lower than in other EAC countries.
In April 2026, the Ugandan Shilling appreciated by 0.4 percent against the US Dollar, trading at an average mid-rate of Shs 3,716.70/USD from Shs 3,730.53/USD in March 2026, a rebound from the depreciations registered in the past two months. This appreciation was mainly driven by increased foreign exchange inflows from exports and portfolio investors, which outstripped demand for the dollar from the manufacturing and energy sectors.
The Central Bank Rate (CBR) remained unchanged at 9.75 percent in April 2026. Bank of Uganda assessed that, although risks arising from the conflict in the Middle East could exert upward pressure on inflation, the current monetary policy stance remains appropriate and well aligned with prevailing macroeconomic conditions.
In March 2026, Uganda’s merchandise trade with the rest of the world improved, and this was attributed to a faster increase in export receipts, which outpaced the rise in the import bill.
Year-on-year, the merchandise trade deficit narrowed by 54.1 percent to USD 47.75 million in March 2026 compared to USD 103.92 million in March 2025.
Month-on-month, the merchandise trade deficit improved by 29.5 percent from USD 67.76 million in February 2026.
Year-on-year, Uganda’s export earnings grew by 45.6 percent to USD 1,446.12 million in March 2026, compared to USD 992.98 million in March 2025. This growth was mainly on account of a significant increase in mineral export receipts over this period.
Relatedly, on a month-on-month basis, export earnings increased by 5.8 percent from USD 1,367.42 million in February 2026, mainly driven by higher receipts from cotton, tea, and mineral exports.
For details, follow this link: https://www.finance.go.ug/sites/default/files/reports/POE-2026-04-APR.pdf
