Uganda recorded robust economic growth in the final quarter of 2025, with output expanding by 8.5 percent year-on-year, driven by strong consumer demand and increased activity in construction and other key sectors, the finance ministry said.
The growth marks a significant acceleration from the 5.4 percent recorded in the same period a year earlier, highlighting the country’s strengthening recovery and resilience amid global economic uncertainties.
In a statement posted on social media late Tuesday, the ministry said the expansion was underpinned by sustained household spending, as well as momentum in infrastructure development and services.
“The economy continues to demonstrate strong performance across multiple sectors, particularly construction and trade, supported by rising domestic demand,” the ministry said.
Analysts say Uganda’s growth trajectory reflects a combination of improved macroeconomic management, public investment in infrastructure, and a rebound in private sector activity following earlier slowdowns linked to global shocks.
A key driver of economic activity has been the construction sector, which has benefited from large-scale public and private projects, including oil-related infrastructure and transport networks. Increased urbanisation and demand for housing have also supported the sector’s expansion.
The services sector, including trade and telecommunications, has likewise contributed to growth, buoyed by higher consumer spending and improving business confidence.
The government also provided an update on the country’s long-awaited oil export infrastructure, saying construction of the East African Crude Oil Pipeline has reached 80 percent completion.
The 1,443-kilometre pipeline will transport crude oil from Uganda’s oilfields in the west of the country to the Tanzanian port city of Tanga on the Indian Ocean, enabling exports to international markets.
The project is seen as critical to unlocking Uganda’s oil potential and boosting government revenues. After years of delays, authorities now expect commercial oil production to begin in the second half of 2026.
The oilfields are operated by a consortium that includes TotalEnergies and CNOOC, which have been leading development efforts alongside the Ugandan government.
The finance ministry said it projects oil revenues of about 2.2 trillion Ugandan shillings (approximately $587 million) in the 2026/2027 financial year, providing a significant boost to public finances.
Economists caution, however, that while oil production is expected to enhance growth and fiscal revenues, it also presents challenges, including the need for prudent resource management and diversification to avoid overreliance on the sector.
Uganda has in recent years pursued policies aimed at broadening its economic base, with investments in agriculture, manufacturing, and services intended to create jobs and sustain long-term growth.
The strong fourth-quarter performance suggests that these efforts are beginning to yield results, even as the country prepares to transition into an oil-producing economy.
Looking ahead, analysts expect growth to remain solid, supported by continued infrastructure spending and the anticipated start of oil exports. However, external risks such as global commodity price volatility and tightening financial conditions could pose challenges.
For now, Uganda’s economy appears to be on a firm footing, with policymakers optimistic that the combination of domestic demand and emerging oil revenues will sustain momentum in the coming years.
