UGANDA AIRLINES: POLITICS CANNOT OUTRRUN THE NUMBERS

Every few years in Uganda, a moment arrives that forces us to ask whether we learn from our history or simply enjoy replaying it with new actors and shinier equipment. 

The unfolding saga at Uganda Airlines is one such moment — a national drama that began with the promise of pride in the skies but has ended, for now, in a familiar turbulence of losses, excuses, and rushed decisions. Anyone watching closely knows this storm did not start today. It began on the ground, long before the first cabin crew buckled up passengers on the new Bombardiers.

When government announced the revival of Uganda Airlines, officials spoke with the confidence of people who had cracked the aviation code. 

The business plan, they said, had input from the National Planning Authority (NPA), as if that alone was enough to inoculate the project against failure. But a closer reading of that plan revealed more holes than a kitchen sieve. It projected a break-even in two years — a proposition so detached from aviation reality that even industry veterans chuckled quietly. Airlines, everywhere in the world, bleed before they breathe.

 

Even the most mature carriers take five to seven years before anyone utters the word “profit.” But our business plan seemed less concerned with aeronautics and more with arithmetic designed to loosen the government’s purse strings.

And loosened they were. Long before the first commercial route was opened, the real feast had already taken place. Aircraft had been procured, consultancies paid, systems installed, training contracts awarded, and branding campaigns rolled out. Many of the key beneficiaries of Uganda Airlines’ rebirth vanished as soon as the procurement smoke cleared, satiated and licking their chops while the rest of the country was left to finance the hangover.

In aviation, reality eventually catches up with optimism. Richard Branson captured it best when he said that if you want to be a millionaire, start as a billionaire and open an airline. The industry is a black hole by design: fuel volatility, maintenance complexity, pilot training, aircraft depreciation, seasonal travel trends, global shocks, they all conspire to keep profit a distant dream. Even giants stumble. Kenya Airways bleeds. South African Airways has died and resurrected more times than Lazarus. Etihad burnt through billions chasing global dominance..

If airlines with deep pockets and global alliances struggle, what then of a young carrier in a small market?

Uganda Airlines entered this unforgiving world with enthusiasm but without insulation. Today the numbers are unforgiving. Accumulated losses have surged into the hundreds of billions. Operational costs rise like a jet on takeoff while revenues limp behind. Auditor General reports read like recurring episodes of the same tragedy — ticket fraud here, underutilised aircraft there, bloated staffing everywhere. The Airbus A330s we acquired as symbols of national pride now symbolise something else entirely: long-haul operations that drain more than they deliver. The CRJ900s, meant to anchor regional routes, are from a model already discontinued by the manufacturer. And just when one imagines the bleeding might trigger a sober pause, Parliament has greenlighted an additional sh400 billion as a deposit for new jets — a decision that qualifies as throwing good money after bad. But what does Parliament care? It is not Parliament that must justify this to the taxpayer.

A realistic reevaluation of Uganda Airlines must begin by acknowledging that losses are not an anomaly, they are the default. Even the regional carrier Uganda admires most, RwandAir, has not made a profit in its entire fifteen-year existence — despite disciplined governance, aggressive marketing, global partnerships and a well-aligned tourism strategy. If RwandAir, with all its structural advantages, has never crossed into profitability, on what basis did Uganda Airlines imagine it would break even in twenty-four months?

Yet the question we must confront is not simply whether the airline will ever make money. The deeper issue is the cost of choosing this path. Uganda has sunk trillions into the national carrier — in capitalisation, in procurement, in subsidies, in operational losses, and now in deposits for additional aircraft. 

But what else could that money have achieved? 

It could have transformed our human capital landscape, funding vocational institutes, strengthening teacher training, and scaling STEM programmes that would serve Uganda for generations. It could have repaired the structural cracks in our business environment, smoothing regulatory processes, strengthening SMEs, digitising public services, and lowering the cost of doing business. It could have modernised our creaking infrastructure, from roads and power reliability to turning Entebbe into a true regional aviation hub. And it could have turbocharged our tourism and MICE ambitions, where every shilling invested returns more shillings — unlike the aviation black hole, where every shilling invested demands two more to keep the aircraft in the sky.

Perhaps Uganda Airlines can still be rescued. But only if we stop pretending that politics can outvote economics. Uganda must decide whether it wants a commercial airline or a national symbol kept alive by subsidies and sentiment. It cannot be both. Until we confront the truth, that this project was conceived on flawed assumptions, executed through extractive procurement, and protected by political emotion, we will continue feeding a bottomless pit with no return.

BOU NUMBERS SUGGEST STEADY PROGRESS, THE DEVIL IS IN THE DETAIL

The economy often whispers truths long before politicians ever shout them from podiums. The Bank of Uganda’s December 2025 macroeconomic indicators offer precisely this kind of whisper: a picture of resilience and caution, of macroeconomic stability shadowed by persistent structural questions, brought into sharper relief as Uganda approaches the 2026 elections.

At first glance, the numbers are superficially reassuring. Headline inflation settled around 3.1 percent by December, well within the policy target band—reflecting price stability unseen in many past cycles. The trends show that this is not a sudden anomaly but the continuation of a long-term trend.

In 2012 this column pointed out that the broader concern was that economic growth was outpacing development itself. Growth alone was insufficient because people still lacked basic services: there was just one doctor for every 11,000 Ugandans and nearly 50 pupils per primary school teacher—metrics that spoke of deep structural deficits even while GDP figures ticked upward. This column argued then that

for development to be real, gains from growth had to be distributed into human development—health, education, jobs—not just infrastructure or headline GDP numbers. Fast forward to 2025, inflation is low and stable, but the broader question remains: has this macro stability translated into better human outcomes across the country, or has it merely created a calmer statistical façade?

The answer today is more nuanced. Yes, price stability makes life more predictable than a decade ago, but many of the core challenges that frustrated development back then—limited access to quality healthcare, education gaps, and underpowered job creation, still linger beneath the surface. This echoes the earlier message: economic growth makes the numbers look better; actual development is measured in people’s lives.

Another instructive snapshot from Shillings & Cents’ archive comes from the same early-2010s lens: the 2012 reflection on institutional and market formalization. At that time, the informal economy, estimated to comprise two-thirds of all economic activity in Uganda, was cited as a major drag on development, because so much of the nation’s economic value was “invisible” to formal structures that could mobilise savings and lend for investment. More than a decade later, while digital finance and mobile money have expanded dramatically, a significant share of enterprise remains informal and undercapitalised.

The December macroeconomic indicators show modest private credit growth and a stable shilling, but that stability exists alongside an economy where informal businesses still struggle to access affordable credit, dampening the potential boosts from stable inflation and exchange rates.

Yet not all old narratives remain static.

The shift in Uganda’s economic structure is perhaps best captured by the transformation in the relative role of services, industry, and agriculture, a theme that Shillings & Cents explored in reflections about Uganda’s “uneven transformation” over the 2010s. Back then, services barely outpaced agriculture and manufacturing was a modest part of GDP, with real risk that growth might bypass large swathes of the population tied to the land or small enterprise.

By 2025, the story has changed enough to be visible in the Bank of Uganda data: the Composite Index of Economic Activity (CIEA) shows broad-based expansion across sectors, and private sector engagement in services and trade has strengthened. Growth has shifted slightly away from agriculture into services and light manufacturing, and digital transactions and formal financial participation have widened compared with a decade ago.

But the phrase “uneven transformation” still applies. Even as macro indicators improve, low inflation, a stable exchange rate, and rising activity, the underlying structural tensions remain. The import bill, for example, surpassing US$ 4.1 billion

in recent quarterly data, reflects stronger demand for capital and intermediate goods, but also highlights Uganda’s dependency on foreign inputs due to limited domestic industrial capacity. This echoes the old development concerns: industries that could absorb agricultural output and turn it into higher-value products are still underdeveloped, leaving Uganda with a persistent trade imbalance.

Moreover, the reserve cover remaining around three to three-and-a-half months’ imports reminds us that despite progress, the economy lacks a deep buffer against external shocks. In an election year this matters greatly: financial markets reward stability, but thin reserve buffers can quickly sour sentiment if political uncertainty rises.

What the historical Shillings & Cents examples make clear is that Uganda’s progress is neither linear nor guaranteed.

The 2012 debates about whether growth was accompanied by genuine development still echo through policies today; the persistence of a large informal sector continues to constrain credit and investment; and the structural connection between agriculture, industry, and exports remains too weak. Yet the fact that macroeconomic indicators are calmer now than they were in the early 2010s does indicate real progress in institutional stability and financial management.

The approach of 2026

thus finds Uganda in a place it has struggled to reach before—a moment where macro stability exists alongside tangible, if uneven, structural change. If the country can leverage this combination, stable prices, a dependable exchange rate, broader economic activity, and growing formalisation of finance, into deeper structural reforms in agriculture, industry, and human development, then the next decade could mark the long-sought pivot from growth to broad-based development.

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.