UGANDA’S ECONOMY KEEPS TIME, POLITICS MUST CATCH UP

Uganda enters a new political season with one stubborn, reassuring fact ticking away in the background: the economy keeps growing, almost like clockwork. Not spectacularly. Not noisily. But steadily enough to matter.

 "In a world where growth has become erratic, fragile, and often policy-dependent, that consistency is one of Uganda’s quiet advantages. It buys us time. It absorbs shocks. It creates room—if we use it well to fix what still holds us back.

But elections change the weather. They sharpen incentives, redistribute attention, and tempt governments to confuse visibility with impact. Business as usual is not an option, not least because the numbers are no longer polite.

More than half a million young people are entering the job market every year. Infrastructure deficits—from feeder roads to power transmission to urban services are no longer abstract planning concerns; they are binding constraints. And if growth is to remain clockwork rather than luck, the business environment must improve faster than population pressure.

The 2025 story, seen through Shillings & Cents lens, was one of resilience with unresolved tensions. Inflation behaved. Growth held. Exports—especially coffee did the heavy lifting yet again, quietly underwriting foreign exchange stability. Regionally, progress continued in small, unglamorous ways: smoother borders here, shorter transit times there, another logistics bottleneck eased. These are not headline moments, but they matter because investors do not invest in flags or anthems; they invest in access to markets.

This is why Uganda’s liberal economic architecture remains one of its strongest assets. The decision—made decades ago to let markets allocate capital, allow private enterprise to take risks, and keep the economy broadly open has paid dividends. Even today, despite periodic nostalgia for state control, the fundamentals remain intact. And where there have been attempts to drift back toward command-economy instincts, the results have been as expected: inefficiency, rent-seeking, and slow-moving bureaucracy dressed up as strategic intervention.

One understands the temptation. Governments everywhere want to “get back into business.” Ownership makes patronage easier to spread. Jobs can be announced. Assets can be pointed to. Losses can be rationalised. Soon enough, the argument follows that state enterprises need not make money as long as they employ people and deliver some socially useful service. It sounds compassionate. It even sounds pragmatic.

It is neither.

This logic creates a vicious cycle. Loss-making public enterprises weaken the broader business environment, crowd out private investment, and distort prices. As efficiency declines, the same government is forced to pour more billions into plugging gaps—arguing, correctly but incompletely, that collapse would be worse. Meanwhile, the opportunity cost quietly grows. Every shilling poured into a public enterprise black hole is a shilling not spent fixing roads, paying contractors on time, or improving service delivery where the state actually has no substitute.

Domestic arrears sit squarely in this story. By 2025 they had become a chronic drag on enterprise. Contractors waiting years to be paid borrow to survive, pass costs on to prices, or exit altogether. Banks reprice risk. Investment decisions are delayed. What looks like a government accounting issue quickly becomes a private-sector liquidity crisis. An economy can survive high interest rates, external shocks, even elections. It struggles when its own largest client stops paying on time.

And yet, growth kept ticking. That is the paradox and the opportunity. Uganda grows because demand is real, demography is strong, and regional markets are increasingly accessible. Trucks still move. Coffee still ships. Mobile money still hums. This baseline momentum is not an accident; it is the dividend of openness. But momentum alone will not carry us through the next decade.

So what should 2026 be about?

First, corruption must be confronted not as a moral footnote but as an economic emergency. Corruption lengthens project cycles, inflates costs, and erodes trust. It is why roads take longer than planned, why budgets leak, and why investors price Uganda with a caution premium. Tackling it is not about virtue signalling; it is about lowering the cost of doing business.

Second, domestic arrears must be brought under control. Clearing verified arrears, enforcing commitment discipline, and aligning spending with realistic cash flows would release immediate oxygen into the economy. Few reforms would do more, faster, to restore confidence.

Third, project cycles must shorten. Uganda does not suffer from a lack of plans; it suffers from slow execution. Delays are expensive, corrosive, and often unnecessary. Faster delivery raises returns on public spending and sends a powerful signal that the system works.

Above all, 2026 should be about protecting and deepening the business environment. Investors will come because markets are accessible, contracts are honoured, and rules are predictable—not because they like you, sympathise with you, or owe you political favours. Beware of those who invest out of sympathy. Worse still are those who come bearing friendship instead of fundamentals. They are almost always fly-by-night companions.

Uganda’s clockwork growth is a gift. The question before the new political season is simple: will we use it to fix the plumbing, or will we gamble that the clock will keep ticking forever?