UGANDA’S WEALTH INEQUALITY: MORE THAN STRUCTURAL

When Oxfam reported last week that one percent of Kenyans control 78 percent of the country’s wealth, there was a sharp intake of breath across the region.

Inequality is not news, but such a naked statistic hits differently. Kenya—East Africa’s economic powerhouse, with deeper capital markets, a broader tax base, a stronger middle class, and a culture of data transparency still finds itself staring into an abyss of wealth concentration. And if this is Kenya, what on earth might Uganda’s distribution look like? Our guess, if we ever bothered to measure it, is that the disparity would be even more dramatic.

Uganda’s structural foundations were laid in a way that almost guarantees a tight concentration of wealth at the top. Our economy still leans heavily on low-value agriculture and a vast informal sector, both of which struggle to accumulate capital.

Infrastructure gaps from roads that dissolve every rainy season to electricity that flickers like a hesitant flame, more difficult than it should be. A farmer may produce, a trader may hustle, but reaching the customer remains a heroic enterprise.

Our business environment does us no favours either.

The World Bank’s past Doing Business reports have consistently shown how tortuous it can be to start a company, secure permits, enforce contracts, or even understand the tax code. Add to that a human capital challenge skills mismatches, limited vocational training, uneven education outcomes and you begin to see how productivity is throttled at the source.

Then, of course, there is corruption: the ever-present shadow tax on everything. It quietly inflates costs, diverts resources, distorts incentives, and erodes trust. In such an environment, those with access to capital, networks, land, and privileged information inevitably pull ahead—and then accelerate. Once inside that circle, the compounding begins. Wealth grows faster than the economy itself, while the majority labour twice as hard only to remain pinned to subsistence.

But to blame structure alone is to miss the full picture. There is a more intimate layer to Uganda’s inequality one woven out of personal financial behaviour. Give two Ugandans the same income, and watch where they end up ten years later. One budgets, saves early, invests regularly, keeps records, buys assets, steadily builds. The other spends in the moment, postpones saving, dreads paperwork, relies on expensive borrowing, and treats financial planning as something to attempt “when things settle”. Over time, these behaviours carve out chasms that no government programme can bridge.

This is where the global lesson becomes clear: eliminating wealth inequality is utopian. It does not exist anywhere, not even in Scandinavia—the poster child for equality. Norway, Sweden, and Denmark boast some of the world’s lowest income inequality numbers, with Gini coefficients in the mid-20s to low-30s after taxes and transfers. But shift the lens to wealth, and the picture sharpens in uncomfortable ways.

In Sweden, the top 10 percent control between 60 and 70 percent of all wealth, while the top 1 percent hold more than a third. Across Scandinavia, the top 0.01 percent command nearly five percent of national wealth, numbers eerily similar to those of unapologetically capitalist economies like the United States.

"The welfare state flattens incomes, yes, but accumulated capital continues to compound in the hands of those who started early, invested wisely, and stayed disciplined. Even the world’s most equal societies cannot iron out the wealth curve. Which brings us back home.

If we were to hazard a breakdown, structural factors—poor infrastructure, weak business environment, corruption, limited industrialisation, and lagging human capital might explain 60 to 70 percent of our disparity. But the remaining 30 to 40 percent? That is personal. It is behaviour. It is habit. It is mindset. And unlike the structural issues, this part can change today—without a parliamentary vote, a budget allocation, or a donor conference.

Kenya’s 78 percent statistic is frightening, yes. But it is also clarifying. Inequality is not exclusively a national problem to be solved in boardrooms and government offices. It is a household problem, shaped by the roads we build and the habits we keep. By the markets we regulate and the budgets we maintain. By the schools we run and the savings we protect.

Uganda will never eliminate wealth inequality. No society ever has. But we can blunt its harshest edges. And the quickest lever available to us is not a new policy framework or an ambitious reform blueprint it is a quiet revolution in personal financial behaviour across millions of Ugandan homes.

BOOK REVIEW : THE ART OF SPENDING MONEY

Morgan Housel has established himself as one of the most influential financial thinkers of the 21st century. His breakout classic, The Psychology of Money, became required reading for anyone trying to understand the human side of finance. Later came Same as Ever, his second exploration into how timeless patterns shape behaviour. Now, with The Art of Spending Money, Housel delivers his third book—arguably his most intimate and philosophical yet.

"Where many personal-finance books focus on earning, saving, and investing, this one asks the harder question: What, exactly, is money supposed to do for your life?...

It is a deceptively simple inquiry that unravels into deep psychological terrain.

At the centre of Housel’s argument are four emotional traps that distort how we spend and, ultimately, how we live: envy, comparison, identity, and insecurity. These forces are more dangerous than bad markets or bad luck because they work silently—inside our stories, our egos, our fears.

Envy, he writes, is a game with no finish line. You envy someone’s lifestyle today, only for someone else to leap ahead tomorrow. The standard of success keeps shifting like a mirage. In Uganda, where visible consumption often becomes a proxy for achievement, this insight is particularly relevant. Envy converts money into a scoreboard, not a tool. And once you fall into that trap, no amount of earning can bring contentment.

Comparison is just as insidious. Social media, public life, and even family gatherings have become arenas for comparing incomes, cars, schools, houses, holidays—even children’s performance. Housel warns that comparison doesn’t just distort spending; it distorts purpose. Instead of asking, “What do I want?” you begin asking, “How do I keep up?” This is how financially disciplined people slide into lifestyle inflation and, eventually, debt. It is how long-term goals get derailed by short-term temptations disguised as status.

Identity

forms the third trap. For many people, money becomes a canvas on which they paint who they want the world to think they are. In our own context—where titles, neighbourhoods, and brands are deeply symbolic—this is a cultural truth. Housel’s caution is simple but profound: when your identity depends on money, your identity becomes fragile. The moment the money falters, the self-image collapses. True wealth, therefore, is internal before it is external.

Finally, insecurity—the quiet force behind most reckless spending. Housel notes that people often buy things not because they need them but because they want to feel respected, admired, included, or important. But insecurity is a bottomless vessel. No amount of spending can fill it. In fact, the more you rely on money to soothe emotional wounds, the more financially unstable you become. What looks like overspending is often emotional self-medication.

Where Housel truly excels is in clarifying the complex relationship between money and happiness. He does not pretend money is irrelevant. Money can buy comfort, options, dignity, and time, especially in a society like ours where financial instability is often tied to emotional stress. The ability to educate your children, support your parents, choose better healthcare, avoid debt traps, these are real sources of happiness.

But money cannot buy the deeper, more durable forms of joy: purpose, belonging, trust, identity, self-respect, or love. It cannot buy inner quiet. It cannot buy a meaningful life. It cannot buy the ability to sleep peacefully at night. Money is an amplifier: it magnifies who you already are. If you are grounded, money expands your freedom. If you are chaotic, money multiplies the chaos...

For Ugandan readers—professionals, traders, teachers, students, and hustlers alike, this book is a mirror. The emotional traps Housel describes are universal. You cannot budget your way out of envy. You cannot save your way out of insecurity. You cannot invest your way out of comparison. You must think your way out.

The Art of Spending Money is not a manual; it is a meditation. A challenge. A provocation. It forces you to ask: What do I want my money to do for me? Until you answer that honestly, no salary, no business, and no investment strategy will give you peace.

With this third book, Housel has completed a kind of philosophical arc. And after finishing it, I intend to revisit Same as Ever, if only to round off my understanding of his growing body of thought and the worldview he is quietly shaping.

This is the rare personal-finance book that doesn’t just teach you how to spend. It teaches you how to live.

FSDU DRAGGING UGANDA OUT OF THE FINANCIAL STONE AGE

Uganda has never truly been a poor country.

What we have always been is an under-aggregated one—a place where money exists in fragments, scattered across households and hidden in the folds of everyday survival. Anyone who has lived here knows the choreography. Coins dropped into tins. Notes folded into kaveera and tucked under mattresses. A cow or goat standing in for a savings account. Family lending circles filling the gaps left by formal finance.

"Our people save, and often with remarkable discipline. What they have lacked are the mechanisms to turn that saving into something larger than the sum of its parts...

Scattered money is powerless money. It cannot compound. It cannot be intermediated. It cannot fuel investment or finance growth. It simply sleeps. And when money sleeps, the country sleeps with it. This is the quiet crisis at the heart of our development challenge: not the absence of resources, but the absence of aggregation.

That is what made Financial Sector Deepening Uganda’s (FSD) 10-year journey is worth more than ceremonial applause. At a recent event to commemorate the annivessary speaker after speaker underscored the organisation’s role in building the infrastructure, trust, and systems required to aggregate Uganda’s fragmented savings into national capital.

Central bank governor Michael Atingi-Ego, reminded the room that the financial sector we see today, more inclusive, more digital, more resilient, did not emerge by chance. It is the product of deliberate policy, thoughtful regulation, and patient collaboration.

He described the national payment switch, the central data hub, eKYC, digital supervision and other reforms as “the digital nervous system of our credit ecosystem,” the architecture that allows money to move safely and efficiently. Without such a nervous system, aggregation simply cannot happen. Money remains stuck in the micro-spaces of household life; it never graduates into productive capital.

Finance permanent secretary Ramathan Ggoobi, recounted walking into a bank as a young man, hoping to open a savings account, only to be asked whether he “really had money” (he did not name the bank).

 It was a humiliation delivered casually, but one so many Ugandans know intimately. He used the story to illustrate a larger point: the financial system was never built for the majority. And without inclusion, aggregation is that much harder. Money outside the system cannot help the person who owns it, nor can it help the country that needs it.

Together, these two voices captured the twin truths of Uganda’s financial evolution: that systems build trust, and trust builds inclusion. And inclusion is the gateway to aggregation.

This is the context in which FSD Uganda’s work over the past decade becomes transformative. Through policy support, a steady push for innovation, and an insistence on evidence-based dialogue across the sector, financial inclusion has risen from 29% to 68%. Beneath that statistic lies a more meaningful shift—billions of shillings have migrated from mattresses, secret tins, and informal networks into the formal economy, where they can be intermediated, lent out, invested, and multiplied. Ugandans who were once spectators to the monetised economy are now participants in it.

At the same time, FSD has worked to widen the channels through which aggregated money can flow. The Mastercard Foundation, supported Recovery Fund has channelled credit to over 130,000 micro and small businesses, 70% of them women-led enterprises that have always had the energy and ambition, but rarely the capital. The Deal Flow Facility, now mobilising over $8.2 million for growth-stage firms, is pushing opportunity closer to investment, turning potential into financing reality. Both initiatives reflect the same principle: aggregation is not only about savings—it is also about aligning capital with the ventures capable of driving structural transformation.

"Uganda’s entrepreneurs have never lacked drive. What they have lacked are mechanisms linking that drive to finance. FSDU has helped build those mechanisms.

This work becomes even more urgent when set against Uganda’s long-term economic ambition. Vision 2040, reinforced by government’s tenfold growth agenda, requires private-sector credit to expand from sh27 trillion to more than sh270 trillion. It is an audacious expectation—and it is only possible if Uganda aggregates its savings at scale. Household savings, SACCO deposits, pension surpluses, remittances, mobile money balances, investment capital, these must be pooled into channels capable of financing agriculture, manufacturing, technology, renewable energy, and the logistics systems of a modern economy.

This is why Project Okusevinga, reducing the minimum investment in government securities to sh10,000, is so consequential. It democratises investment. It makes wealth-building a mass-participation activity. If embraced, it could shift Uganda from a cash-based culture to a savings-and-investment culture within a decade.

Obviously there is still a lot of work to be done. Emma Mugisha, FSDU’s Board Chair captured the moment aptly: the first decade was about building the pipes; the next must be about filling them. Uganda now has the rails -- digital, regulatory, institutional, required for national aggregation. What remains is to build the culture, trust, and usage that turn infrastructure into impact.

Uganda is not poor. Uganda is under-aggregated. And FSD Uganda’s first 10 years show what becomes possible when a country begins to solve that problem—quietly, steadily, one account, one business, one innovation, one empowered citizen at a time. The task of the next decade is simple but profound: to turn aggregation into transformation.

POSTBANK REBRAND SIGNALS UGANDA BANKING INDUSTRY’S COMING OF AGE

My father told me how, as a young man, he would deposit money at the Post Office, the precursor to PostBank, in Nairobi, then jump on the train and withdraw the same funds days later in Kasese by simply showing his passbook. No computers. A surprisingly efficient way of transferring money across the region in the 1960s and early 1970s.

That story captures the trust, reach, and quiet efficiency that defined the old postal banking system. And it is this same spirit that came alive again at the beginning of November when PostBank opened its 59th and newest branch in Luweero town, hard on the heels of the bank’s rebrand to Pearl Bank.

The two events were symbolic of both expansion and transformation, a bank that once helped knit East Africa together by train and paper now positions itself to do the same through fibre optics and mobile networks.

It is easy to see how the rebrand opens the possibility to recapture that regional ambition, this time fused with digital capacity and renewed national purpose.

"The new name signals far more than a cosmetic change of colour from blue and yellow to the royal purple and orange of the Pearl. It represents a maturing institution and, by extension, a maturing banking industry in Uganda...

When PostBank was spun off from the old Uganda Post & Telecommunications Corporation twenty-seven years ago, it inherited a modest mandate: to preserve the savings culture that post offices had cultivated among ordinary Ugandans. For years, it operated as a small, government-owned lender serving rural and low-income customers. But as Uganda’s economy expanded and technology redrew the boundaries of finance, the bank evolved into a credible national player.

Its story mirrors that of Uganda’s wider banking sector.

The 1990s were years of cleanup and stabilization. The 2000s saw consolidation and cautious expansion. The 2010s ushered in a digital revolution led by mobile money and agency banking. And now, in the 2020s, the focus is on integration—of people, systems, and regional economies.

That ambition is no small matter. For years, one of the quiet frustrations of Uganda’s commercial expansion across the region has been the absence of a strong homegrown bank with regional reach, an institution capable of doing for Ugandan capital what KCB and Equity Bank have done for Kenya. As Ugandan firms push into South Sudan, the DRC, Rwanda, and Tanzania, they often find themselves banking with Kenyan or multinational institutions. The emergence of

Pearl Bank, with its deep national roots and growing technological sophistication, may finally begin to fill that gap.

Its mission remains anchored in inclusion. Over the past decade, the bank has become a crucial partner in government’s drive to bring millions of citizens into the formal economy. Its integration with national programs such as the Parish Development Model (PDM) has turned it into a key artery for channeling development funds to rural households and cooperatives. What was once a logistical maze of forms and ledgers has become a streamlined, digitized process linking parishes, SACCOs, and individual accounts in real time, through the banks’ Wendi digital wallet.

This has not only expanded access to finance but also restored confidence in public financial systems, an achievement that resonates deeply in a country where mistrust of government banking once ran high.

This unique position, halfway between commercial and developmental banking, has made the Bank the institutional bridge between state aspirations and citizen livelihoods. It has shown that inclusion, sustainability, and profitability are not mutually exclusive goals. The success of this hybrid model reflects a larger truth about Uganda’s banking evolution: that stability and innovation can coexist when trust, technology, and governance are aligned.

Within the broader industry, this new development signals a new phase in Uganda’s financial maturity. Two decades ago, state-owned banks were dismissed as bureaucratic relics. Today, they are proving commercially viable and strategically vital. The bank’s steady profitability, expanding branch footprint, and disciplined management reflect a sector that is not just growing but professionalizing. The industry’s key indicators, capital adequacy, liquidity, and asset quality are stronger than they have ever been. Non-performing loans have stabilized, deposits continue to grow, and local institutions are beginning to look beyond Uganda’s borders with confidence.

The bank’s evolution also mirrors changing economic priorities. With agriculture still employing seven in every ten Ugandans, the Bank’s support for structured agricultural financing has become central to its growth strategy and to national development. The shift from transactional to developmental banking—supporting farmers, small businesses, and women-led enterprises—illustrates a deeper understanding of what banking must mean in an economy still finding its industrial footing.

At the same time, the bank’s investments in financial literacy have helped demystify banking for millions of Ugandans. From women’s groups in rural trading centres to youth cooperatives in small towns, finance is being redefined not as an intimidating institution but as an everyday tool of empowerment. In the long term, this cultural shift may be the most enduring dividend of all.

As government and the private sector deepen integration within the East African Community and the African Continental Free Trade Area, Uganda will need financial institutions capable of supporting its businesses across borders.

My father’s passbook, stamped by a teller in Kasese, was proof of a simple but powerful truth: that trust sustains commerce. Half a century later, that same trust—rebuilt, digitized, and scaled, is what underpins

Pearl Bank’s next chapter.

The trains have been replaced by servers, the queues by mobile apps, but the mission is the same: to connect people, move money, and fuel growth across borders.

MTN’s METAMORPHISIS FROM AIRTIME SELLER TO FINTECH ENGINE

There was a time when MTN Uganda’s performance could be summed up in three words: subscribers, airtime, and coverage. As recently as 2020, as this column observed, the real story was hidden beneath the surface of the mobile-money revolution.

The country’s mobile-money platforms were already moving sums equivalent to half the national GDP—“a silent banking system that doesn’t sleep” even as telecoms continued to measure success by call minutes. MTN was then a strong, cash-generating voice business standing at the edge of a digital frontier it was yet to fully claim.

Fast forward to 2025 and the transformation is ticking along impressively.

The company’s third-quarter performance

underlines the scale of that metamorphosis. Topline revenue rose 15 percent to sh 2.2 trillion, powered by double-digit growth in both data and fintech. Data revenue jumped 22 percent, while fintech climbed 18.6 percent, together contributing almost half of total income.

Voice, once the company’s dominant pillar, grew just 4 percent. Profit after tax surged 23 percent to sh 295 billion. The board rewarded shareholders with an interim dividend of sh 10.5 per share, the largest since the company listed in 2021—a clear statement that the new digital engines are not only humming but also highly cash-generative.

MTN’s current business model has little in common with the one described in this column’s early reflections on Uganda’s telecom boom.

 The company has moved from selling airtime to selling access—to data, to transactions, to platforms. It has poured more than sh 350 billion this year into network upgrades, adding 125 new sites and strengthening its 4G footprint, building what one might call the “digital highways” of Uganda. Each new tower now carries more data than voice, and every new smartphone becomes a tollgate through which MTN collects its share of the digital economy.

Fintech, through MTN MoMo, has evolved into the company’s heartbeat. With more than ten million active users, MoMo has become a daily necessity for Ugandans—paying merchants, sending remittances, settling bills, and increasingly, saving and borrowing. It is not merely a payment platform but an informal financial system, quietly eroding the boundaries between telecommunications and banking. In 2017  we wrote, “mobile money is the real central bank of the people.” That observation feels prophetic now.

Across the border, Safaricom’s half-year results released on the same day as MTN released their Q3 results, offer a crystal ball into MTN’s possible future.

The Kenyan operator’s M-Pesa mobile money platform accounts for 43 percent of service revenue

, and data for another double-digit slice. Voice is no longer king there—it is an afterthought. MTN Uganda is following the same arc, though its story is still in the rising chapters. Where Safaricom processes nearly a billion transactions a month, MTN’s volumes are in the hundreds of millions. The gap is the opportunity, and the dividend signals confidence that management intends to close it.

The data narrative mirrors the fintech journey. Safaricom’s average user consumes roughly twice as much data as Uganda’s, but the trend lines point upward. MTN’s capital spending is laying the groundwork for that growth, ensuring capacity before the demand wave crests. As smartphones become cheaper and apps infiltrate every aspect of life—from learning to trading—Uganda’s data appetite will grow. The paradox is familiar: prices may fall, but usage will more than compensate, pushing revenues and margins higher.

What distinguishes MTN’s story is not just that it has pivoted successfully; it has done so while preserving profitability and a disciplined dividend culture. The sh 10.5 per-share payout, up 61 percent from last year, is a declaration that this transformation is not a gamble but a sustainable model. The company’s strong cash flows, even amid inflation and currency headwinds, have allowed it to fund expansion and still deliver attractive returns—a balance few Ugandan listed firms manage.

Looking ahead, MTN’s trajectory will hinge on execution. Safaricom’s example shows that the next phase lies in opening up ecosystems—through APIs, partnerships with banks and fintechs, and seamless integration into everyday business. MTN has the reach, the trust, and the infrastructure. What remains is to build the bridges that turn scale into depth.

 For investors, the dividend is a reward; for the economy, it is a signpost. The digital dividend has arrived—and this time, everyone gets a share.

MTN UGANDA LIFTS DIVIDEND TO SH10.5 AS PROFIT AND DATA REVENUE SURGE

MTN Uganda has announced an interim dividend of UGX 10.5 per share, up from UGX 6.5 last year, reflecting robust earnings growth and strong cash generation. The payout—totaling about UGX 236.7 billion—marks the telecom’s highest interim dividend since its 2021 listing, underscoring confidence in its expanding data and fintech businesses.

Chief Executive Officer Sylvia Mulinge said the dividend mirrors “resilient execution of the Ambition 2025 strategy and our focus on disciplined cost management and digital growth.”

Financial Highlights (Nine Months to September 2025)

Metric	9M 2025	9M 2024	Change YoY
Service Revenue	UGX 2.20 trillion	UGX 1.91 trillion	+15.3 %
Data Revenue	UGX 663 billion	UGX 542 billion	+22.4 %
Fintech Revenue	UGX 573 billion	UGX 483 billion	+18.6 %
Voice Revenue	UGX 790 billion	UGX 758 billion	+4.2 %
EBITDA	UGX 1.15 trillion	UGX 985 billion	+16.8 %
EBITDA Margin	52.3 %	51.4 %	+0.9 pp
Profit After Tax	UGX 295.3 billion	UGX 240.7 billion	+22.7 %
Capex (Ex-leases)	UGX 352 billion	UGX 340 billion	+3.5 %

Source: MTN Uganda 9M 2025 Earnings Release

Strong Operating Momentum

MTN’s performance was powered by sustained smartphone uptake, expanding 4G coverage, and growth in the fintech ecosystem. Data revenue rose 22 percent as the company modernized its network and upgraded 125 new sites, while fintech services benefited from higher mobile-money transaction volumes and merchant payments through MoMo, which now serves over 10 million active users.

Operating profit margins improved to 52.3 percent, reflecting cost discipline and digital-channel efficiencies. Management said cash flow remained strong, supporting both network investment and the enhanced dividend payout.

Dividend Signals Confidence

The UGX 10.5 payout—representing a yield of roughly 6 percent at current market prices—confirms MTN’s standing as one of the most consistent dividend payers on the Uganda Securities Exchange. Analysts view the increase as a vote of confidence in continued double-digit growth despite inflationary pressures and a weakening shilling.

Chief Financial Officer Andrew Bugembe noted that prudent capital management allowed the company to balance expansion and returns. “We are maintaining investment in our network while delivering attractive shareholder value,” he said.

Strategic Focus and Outlook

MTN Uganda continues to position itself as a digital-services leader. Beyond mobile data and MoMo, it is scaling broadband and enterprise connectivity to tap corporate and home-internet demand. The rollout of rural coverage and 5G-readiness initiatives remains central to its strategy.

Mulinge said the outlook remains positive: “We anticipate sustained revenue momentum as we deepen customer value through affordability, innovation, and service quality.”

Investor Takeaway

With profit up 23 percent and a record interim dividend, MTN Uganda has cemented its reputation as the exchange’s blue-chip bellwether. Its twin growth engines—data and fintech—continue to offset slowing voice revenues, providing resilience in a tight economy. For investors seeking both yield and growth, MTN remains the benchmark counter on the USE.

LOOKING BACK ON UGANDA’S UNEVEN TRANSFORMATION

The phrase “You cannot see the forest for the tees” comes in handy at times like these.

 

Living in Uganda the tendency is to focus on all that is wrong, especially with the economy. A cursory look back in history can be a real eye opener.

 

According to the Bank of Uganda Statistical Abstracts

(2010, 2020, and 2024), Uganda’s economy has changed more in the last fifteen years than in the previous three decades. Anecdotal evidence is that the skyline has grown taller, the roads busier and money moves faster.

 

Yet beneath the hum of new malls, banks, and mobile money agents, much of Uganda still bends to the rhythm of the hoe. That is the paradox of Uganda’s transformation — rapid growth built on a fragile rural base.

In 2010, agriculture contributed about 24 percent of GDP, manufacturing under 10 percent, and services nearly half. The typical Ugandan was a smallholder farmer, working a patch of land, selling surplus in the nearest market, and depending on rain for survival. Industry revolved around agro-processing — coffee hulling, sugar milling, breweries, grain grinding and the financial system barely touched the countryside. Credit was limited, expensive, and mostly directed toward importers and traders in Kampala.

By 2020, Uganda’s economy had taken on a new shape. Services had risen above 50 percent of GDP, manufacturing had expanded to around 15 percent, and agriculture had slipped slightly below 23 percent. The country was urbanizing fast; mobile money had turned the phone into a bank, and Kampala’s skyline hinted at a new prosperity.

But beneath the surface, the imbalance persisted. The farms that fed the factories still struggled with low yields, limited financing, and poor access to markets. Credit flowed to real estate, trade, and consumption, while agriculture — employing three-quarters of Ugandans  remained underfunded...

By 2024, the transformation looked complete on paper. Services now contribute more than 55 percent of GDP, manufacturing holds steady between 12 and 15 percent, and agriculture hovers around 25 percent. GDP has tripled since 2010, and private sector credit has reached 20 percent of GDP — the highest in the country’s history. Kampala is busier than ever, real estate booming, and consumption rising. But three out of every four Ugandans still depend on the land for their livelihood. Uganda has modernized, yes, but only in patches. Growth has been faster than transformation.

Nowhere is this clearer than in agro-industry, the bridge between the farm and the factory. In 2010, food, beverages, and tobacco made up about a third of all manufacturing. By 2024, their share has dropped to a quarter, even though output has tripled. The change reflects diversification — Uganda now produces more steel, cement, plastics, and tiles but also a weakening link between agriculture and industry.

The backbone of our industrial economy, the farm, is still too weak to carry the weight of growth. Factories depend on consistent, quality raw materials, yet agriculture remains largely rain-fed, fragmented, and under-financed. When the rains fail, milk deliveries fall, coffee cherries rot and processors stand idle. Our industrial structure, for all its progress, still rests on soft soil.

Uganda’s next phase of growth depends on strengthening that foundation.

The farms must feed the factories. The country cannot industrialize without first revitalizing agriculture. This means putting knowledge back into the hands of farmers through functional extension services. For two decades, the collapse of extension has left millions of farmers without guidance on soil management, pests, or post-harvest handling. Rebuilding that system supported by digital tools and field officers could raise productivity across the board.

It also means investing in water. Less than three percent of Uganda’s arable land is irrigated, leaving farmers at the mercy of the weather. Climate change has turned rainfall into roulette, where one bad season can wipe out entire harvests and cripple agro-processors downstream. More irrigation from smallholder drip systems to valley dams would stabilize output, smooth supply chains, and make agriculture a dependable industrial partner.

And it means facing up to the land question. Uganda’s land tenure system, a web of overlapping claims and insecure titles, discourages investment. Farmers cannot use land as collateral, cannot expand production easily, and often hesitate to make long-term improvements. Simplifying the system while protecting customary rights would unlock credit and encourage commercial farming. An aggressive titling drive would be ideal.

Yet even as production improves, Uganda must think carefully about demand. We can’t build a strong industrial base on exports alone. The first market for Ugandan goods must be Ugandans themselves. The numbers are telling we consume less than a tenth of the coffee we produce and process less than 20 percent of the milk we collect. The same pattern holds for fruits, beef, and eggs.

Strengthening domestic consumption is not only patriotic; it’s strategic. Every cup of locally roasted coffee, every packet of milk sold in Gulu or Masaka, builds a stronger base for exports. “Buy Ugandan, Build Uganda” should stop being a slogan and become a serious industrial policy.

One promising avenue for this is school feeding. Properly designed, a national school feeding program could create a guaranteed market for milk, eggs, beef, maize, beans, and vegetables — stabilizing incomes for farmers and processors alike. It would also nourish the next generation while driving local production.

But it is a double-edged sword. Uganda’s government has a dreadful record of paying its suppliers on time. Domestic arrears, as this column has warned before, have spiraled out of control, strangling businesses and draining confidence. If school feeding contracts become yet another unpaid promise, they could bankrupt the very processors they were meant to help. To make such programs work, the state must first fix its payment discipline. Otherwise, a well-intentioned idea could collapse under the weight of government debt.

Beyond the domestic market, Uganda must also push harder to sell its products abroad. The East African Community has been a good start — our milk, sugar, and grain already find buyers across the region but it’s not enough. The African Continental Free Trade Area (AfCFTA) opens a much larger frontier, and beyond that lie the Middle East, Europe, and Asia. Government must invest in trade diplomacy, quality standards, and export infrastructure to turn Uganda’s raw produce into globally competitive brands.

The goal should not be to export coffee beans and bulk milk, but to export roasted coffee, branded dairy, and packaged foods. That’s where jobs and real value lie.