March 2026
Performance of the Economy Report
Ministry of Finance, Planning and Economic Development
2026-04-21
List of Acronyms
| Acronym | Expansion | |
|---|---|---|
| B.Franc | Burundian Franc | |
| BOU | Bank of Uganda | |
| BTI | Business Tendency Index | |
| CBR | Central Bank Rate | |
| CIEA | Composite Index of Economic Activity | |
| D.R.C | Democratic Republic of Congo | |
| EAC | East African Community | |
| EFU | Energy, Fuel and Utilities | |
| FOB | Free on Board | |
| FX | Foreign Exchange | |
| FY | Financial Year | |
| GBP | British Pound Sterling | |
| ICBT | Informal Cross Border Trade | |
| KShs | Kenyan Shilling | |
| MDAs | Ministries, Departments and Agencies | |
| MOFPED | Ministry of Finance, Planning and Economic Development | |
| NGOs | Non-Governmental Organisations | |
| PAYE | Pay as You Earn | |
| PMI | Purchasing Managers’ Index | |
| PSC | Private Sector Credit | |
| R.Franc | Rwandan Franc | |
| T-Bills | Treasury Bills | |
| T-Bonds | Treasury Bonds | |
| TzShs | Tanzanian Shilling | |
| UBOS | Uganda Bureau of Statistics | |
| UShs / Shs | Ugandan Shilling | |
| US$ / USD | United States Dollar | |
| VAT | Value Added Tax | |
| YTM | Yield to Maturity |
Summary1
Real Sector
The high frequency indicators of economic activity show continued strengthening of economic conditions, as highlighted by an upward trend in the Composite Index of Economic Activity (CIEA) over the past months. The index grew by 0.6 percent between January and February 2026, reaching 185.6, a performance underpinned by export growth, rising aggregate demand, stable inflation, and steady growth in private sector credit in the months leading to March 2026.
Additionally, the Purchasing Managers’ Index (PMI) was registered at 54.3 in March 2026, up from 54.2 in the previous month, which showed continued improvements in business conditions in the Ugandan private sector. The improvements were mainly observed in output and new orders, prompting firms to increase input (raw material) purchases and hire more staff thereby increasing employment.
Sentiments about doing business in Uganda remained positive, as shown by the Business Tendency Index (BTI), which posted 57.83 in March 2026, a reading higher than the threshold of 50. This signaled continued optimism by investors operating in Uganda, especially in the agricultural and financial sectors during the month.
Despite the rising fuel costs, annual headline inflation in March 2026 eased to 2.8 percent, down from 2.9 percent in the previous month. This was primarily driven by a slowdown in both core inflation and food crop & related items inflation. Particularly, the slowdown in price increase was registered for restaurants and accommodation, and other items like kroilers (chicken), sugar, milk and fresh leaf vegetables among others during the month.
Financial Sector
In March 2026, the Ugandan Shilling depreciated by 4.5 percent against the US Dollar, having traded at an average midrate of Shs 3,730.53/USD compared to an average of Shs 3,568.23/USD in February 2026. This depreciation was partly driven by the global strengthening of the US Dollar which coincided with a strong demand for dollars by corporate entities and local importers who are paying more due to the global supply chain disruptions caused by the geopolitical tensions in the Middle East.
Lending rates registered marginal changes between January and February 2026. Whereas the weighted average lending rate for the Shilling-denominated credit rose to 18.73 percent in February 2026, up from 18.33 percent in January 2026, the weighted average lending rate for foreign currency-denominated credit declined to 7.09 percent from 7.21 percent over the same period.
In Government securities market, a total of Shs 1,354.76 billion was raised from three auctions (2 T-Bills, 1 T-Bond) on the domestic primary market during the month of March 2026. A total of Shs 409.36 billion was raised from Treasury Bills while Shs 945.39 billion was raised from Treasury Bonds. Of the total amount raised, Shs 702.80 billion was used for refinancing maturing securities while Shs 651.96 billion was used to finance other items in the budget.
Yields on Treasury Bills continued a three-month downward trend through March 2026, with the 91-day and 182-day tenors reducing from 11.0 percent and 11.9 percent to 10.5 percent and 11.8 percent, respectively. The 364-day tenor held steady at 12.3 percent.
Similarly, yields on Treasury Bonds declined across all tenors in March 2026, with the 2-year, 5-year, 15-year, and 25-year rates dropping to 13.50 percent, 15.0 percent, 15.75 percent, and 16.29 percent, respectively. This broad decline was fuelled by increased demand for government securities and a significant boost in investor confidence following the conclusion of the election period.
External Sector2
In February 2026, Uganda traded at a deficit worth USD 61.91 million with the rest of the world. This is a detoriation from a deficit of USD 44.54 million registered in February 2025, driven by a surge in the import bill which outpaced the growth in export earnings over this period. However, on a month-on-month basis, this deficit was a shift from a trade surplus of USD 147.26 million registered in January 2026, on account of a significant pickup in import receipts following the conclusion of the election period, coupled with a decline in export receipts from mineral products, electricity, and fish between the two months.
Uganda’s export earnings grew by 63.7 percent year-on-year to USD 1,374.18 million in February 2026, compared to USD 839.28 million in February 2025. This growth was mainly on account of a significant increase in gold and coffee export receipts over this period. However, on a month-on-month basis, compared to January 2026, export earnings dropped by 5.5 percent.
Uganda’s import bill grew by 65.2 percent year-on-year, rising from USD 883.82 million in February 2025 to USD 1,436.10 million in February 2026. This was primarily driven by increased volumes of mineral products, machinery, and chemical goods. On a monthly basis, imports grew by 9.9 percent compared to January 2026, on account of the recovery of formal private sector demand for import commodities such as vegetables, oil, and base metals among others.
Fiscal Sector3
Government operations in the month of March 2026 resulted in a fiscal deficit of Shs 376.02 billion which was lower than the planned deficit of Shs 903.15 billion. The lower deficit was on account of lower than planned expenditure that more than offset the effect of revenue shortfalls on the deficit during the month.
Domestic revenue collections for March 2026 totalled Shs 2,702.31 billion, representing a 90.5 percent performance, and a shortfall of Shs 284.83 billion against the Shs 2,987.14 billion target for the month. Of the total collections during the month, Shs 2,527.09 billion was tax revenue and Shs 175.23 billion was non-tax revenue. All major tax heads fell short of their respective targets for the month, partly on account of tax administration challenges coupled with non-realization of some of the assumptions made at the time of setting the targets for the financial year.
Government expenses for March 2026 amounted to Shs 2,863.35 billion, representing an 82.8 percent performance rate against the plan of Shs 3,456.51 billion. The underperformance was majorly registered under purchase of goods and services, as well as under grants to other government entities.
Similarly, net acquisition of non-financial assets saw a significant underperformance, with only Shs 245.56 billion spent against a planned Shs 719.23 billion (a 34.1 percent performance rate). This was largely due to delayed disbursement of funds for externally financed projects, partly caused by slow implementation and non-fulfillment of the required disbursement conditions.
Annual headline inflation trends across the East African Community Partner States were mixed in March 2026, with Kenya seeing a slight uptick to 4.4 percent driven by rising food and transport costs. On the other hand, Rwanda’s inflation eased to 7.7 percent while Uganda also saw a slight decrease. Tanzania’s headline inflation remained unchanged at 3.2 percent.
In March 2026, the local currencies of all EAC Partner States weakened against the US Dollar, with the Ugandan Shilling experiencing the most significant depreciation at 4.5 percent. The Kenyan Shilling, Tanzanian Shilling, and Rwandan Franc saw modest depreciations of 0.3 percent, 0.4 percent and 0.2 percent respectively while the Burundi Franc remained relatively stable with a marginal depreciation of 0.02 percent against the US Dollar. The overall regional trend was driven by a globally stronger US Dollar and heightened demand from importers and a reduction in foreign exchange earnings from critical sectors like tourism and mining.
In February 2026, Uganda’s trade balance with the EAC Partner States shifted from a surplus of USD 41.52 million to a deficit of USD 53.40 million, driven by a sharp 50.4 percent increase in imports that overwhelmed a modest 5.9 percent growth in exports. While Uganda maintained trade surpluses with the DRC, South Sudan, Rwanda and Burundi, these gains were outweighed by substantial deficits with Tanzania (USD 146.03 million) and Kenya (USD 100.93 million), largely due to persistent non-tariff barriers for Uganda’s exports to these countries.
1 Real Sector Developments
1.1 Inflation
Annual headline inflation slightly eased to 2.8 percent in March 2026, compared to 2.9 percent in February 2026. This reduction was on account of the slowdown registered for both Core and Food Crop & related Items inflation over the two months.
In the year ending March 2026, annual core inflation was registered at 2.9 percent, down from 3.0 percent the previous month as both its subcategories of services and other goods inflation slowed during the month.
Core Goods inflation remained subdued at 2.0 percent, driven by the slowdown in price increases for commodities like sugar, maize flour, dried fish, live chicken (Kroilers) and refined oil while Core Services inflation dropped to 4.0 percent on account of restaurants and accommodation, whose inflation slowed to 3.7 percent, compared to 4.0 percent in February 2026.
Similarly, annual Food crops & related items inflation dropped to 1.0 percent in March 2026, compared to 1.8 percent registered in the previous month. This marks the lowest reading for food crop inflation since February 2025, on account of improved supply due to favorable weather conditions in the last six months resulting in bumper harvests domestically, coupled with increased inflow of food crops (imports) from neighboring countries.
The slowdown in price increases was most noticeable for items like fresh unskimmed milk, sweet potatoes, passion fruits, round onions and fresh leaf vegetables (nakati, dodo, jobyo etc.).
On the other hand, annual Energy, Fuels and Utilities (EFU) inflation increased to 4.1 percent in the year ending March 2026, compared to 2.7 percent in February 2026. This increase was driven by higher biomass and fuel costs during the month. Within this basket, firewood and charcoal prices rose by 16.2 percent and 8.1 percent while petrol and diesel prices also increased by 4.4 percent and 3.0 percent respectively.
Globally, the pump prices of petrol and diesel have increased significantly, with some countries facing shortages in supply on account of escalated tensions in the Middle East. However, the impact is still minimal in Uganda, on account of the country’s adequate fuel reserves as well as Government’s reforms in procuring fuel for the country. These have so far cushioned the Ugandan consumers from the full impact of the global supply disruptions, keeping the fuel pump prices relatively stable.
1.2 Economic Activity
The high-frequency indicators of economic activity point to improvements in the underlying economic conditions in Q3 of FY2025/26 (January – March 2026). The Composite Index of Economic Activity (CIEA) remained on an upward trajectory since the start of FY2025/26, growing by 0.6 percent on a month-on-month basis, from 184.5 in January to 185.6 in February 2026. This performance has been supported by the strong export performance, increased aggregate demand, stable inflation and private sector credit growth over this period.
The Purchasing Managers’ Index (PMI) was registered at 54.3 in March 2026, up from 54.2 in the previous month, and above the 50-mark threshold thus signalling continued improvements in business conditions in the Ugandan private sector. This performance was supported by the continued increase in output and new orders which inspired firms to hire more staff and increase input (raw material) purchases in response to the increased demand.
1.2.1 Business Perceptions
The Business Tendency Index (BTI) for March 2026 was recorded at 57.83 which is significantly higher than the 50-mark threshold, signalling continued optimism by investors about doing business in the Ugandan economy. Players in the business community were particularly optimistic about the present business situation, order volumes with suppliers and the general economic situation. Optimism was highest in the agricultural, financial and manufacturing sectors during the month.
Despite the optimism expressed during the month, the reading this month was lower than that of February 2026 (59.41) as business people across the various observed sectors were slightly less optimistic in March 2026 than they were in February 2026 reflecting the risks associated with the ongoing geopolitical tensions, especially in the Middle East that could affect the global economy.
2 Financial Sector Developments
2.1 Exchange Rate Movements
During the month of March 2026, the Ugandan Shilling traded at an average midrate of Shs 3,730.53/USD compared to an average of Shs 3,568.23/USD in February 2026, implying a depreciation of the Shilling by 4.5 percent against the US Dollar driven by both domestic and global factors.
Locally, March 2026 was characterized by increased demand for the US Dollar from corporate entities and from importers who are paying more due to the global supply chain disruptions (increased costs in freight and insurance).
On the global scene, the escalating tensions in the Middle East and the feed through effect on the global economy continue to influence investor flight to safety as well as the cost of freight and insurance for goods. Additionally, the US Federal Reserve’s decision not to cut interest rates in their March sitting has partly amplified the dollar’s dominance on the global stage.
Similarly, the Shilling depreciated against the Pound Sterling and the Euro by 2.75 percent and 2.21 percent, respectively, trading at average mid-rates of Shs 4,977.87/GBP and Shs 4,311.83/Euro in March 2026, compared to Shs 4,844.81/GBP and Shs 4,218.45/Euro in February 2026.
2.2 Interest Rate Movements
In March 2026, the Central Bank Rate (CBR) remained unchanged at 9.75 percent, a level maintained since October 2024. This sustained monetary policy stance underscores Government’s commitment to maintaining price stability while supporting macroeconomic stability and economic growth.
2.2.1 Lending Rates6
In February 2026, the weighted average lending rates reflected divergent trends between Shilling-denominated and foreign currency-denominated credit. While Shilling lending rates marginally increased, foreign currency lending rates continued to decline.
The weighted average lending rate on Shilling-denominated credit rose to 18.73 percent in February 2026, up from 18.33 percent in January 2026. Over the past months, the shilling denominated lending rates have remained relatively stable on account of lower non-performing loans and stronger economic conditions during this time.
In contrast, the weighted average lending rate on foreign currency-denominated credit declined to 7.09 percent in February 2026 from 7.21 percent in January 2026.
2.3 Government Securities
During the month of March 2026, Government raised Shs 1,354.76 billion from three auctions (2 T-Bills and 1 T-Bond) of Government securities on the domestic primary market. A total of Shs 409.36 billion was raised from Treasury Bills while Shs 945.39 billion was raised from Treasury Bonds. Of the total amount raised, Shs 702.80 billion was used for refinancing maturing securities while Shs 651.96 billion was used to finance other items in the budget.
All auctions for Treasury bills remained oversubscribed, with an average bid to cover ratio recorded at 2.72 in March 2026.
| Total Issuances | Financing other items in the Government budget | Refinancing | |
|---|---|---|---|
| Q3 2025/26 | 6,299.8 | 4,080.1 | 2,219.6 |
| March 2026 | 1,354.8 | 652 | 702.8 |
| FY 2025/26 to date | 19,294.5 | 12,396.1 | 6,898.4 |
2.4 Annualized Yields (Interest Rates) on Treasury Bills
With the exception of the 364-day tenor, yields (interest rates) on other Treasury Bills declined for the third consecutive month continuing through March 2026. Yields on the 91-day and 182-day tenors reduced to 10.5 percent and 11.8 percent in March 2026 from 11.0 percent and 11.9 percent, respectively in February 2026. The yield on the 364-day tenor remained unchanged at 12.3 percent in March 2026.
2.5 Annualised Yields (Interest Rates) on Treasury Bonds
Consistent with the trend observed for most T-Bill tenors, yields (interest rates) on Treasury Bonds also declined in March 2026 in comparison to the rates registered in previous issuances of similar securities. Yields for the 2-year, 5-year, 15-year, 25-year bond tenors reduced to 13.50 percent, 15.0 percent, 15.75 percent and 16.29 percent down from 15.10 percent, 15.50 percent, 16.48 percent and 17.95 percent, respectively.
The general decline in yields in March 2026 was partly on account of higher demand for Government securities as reflected by the higher bid to cover ratio (see Figure 10), alongside improving investor confidence following the successful conclusion of the general elections.
2.6 Outstanding Private Sector Credit7
The stock of Outstanding private sector credit declined by 0.2 percent to Shs 25,377.04 billion in February 2026, down from Shs 25,427.94 billion in January 2026 as foreign currency denominated credit contracted and Shilling denominated credit grew marginally.
During the month, foreign currency-denominated credit declined by 0.8 percent to Shs 7,549.9 billion in February 2026 from Shs 7,609.0 billion in January 2026. Meanwhile, Shilling-denominated credit registered marginal growth of 0.05 percent, increasing to Shs 17,827.2 billion from Shs 17,819.0 billion over the same period.
On a sectoral level, the reduced stock was mainly observed in the agriculture, trade and building, mortgage, construction & real estate sectors during the month. This is partly on account of improvement in the ability of borrowers to pay back their loans as reflected in the reduced ratio of non-performing loans seen in the first two quarters of this financial year, as businesses continue to benefit from improved levels of economic activity.
2.7 Credit Extensions8
In February 2026, credit approved by lenders for extension to the private sector increased to Shs 1,740.52 billion from Shs 1,098.00 billion extended in January 2026. This was largely driven by increased lending to the ‘Business, Community, Social & Other Services’, Trade, and Manufacturing sectors.
Sectoral distribution shows that personal and household loans accounted for the largest share of approved credit at 30.1 percent. This was followed by trade and business services, which accounted for 19.9 percent and 17.6 percent, respectively.
3 External Sector Developments
3.1 Merchandise Trade Balance9
Year-on-year, the merchandise trade deficit widened to USD 61.91 million in February 2026 from USD 44.54 million in February 2025. This was mainly on account of a stronger increase in the import bill which outweighed the growth in export earnings.
On a monthly basis, the trade balance deteriorated from a surplus of USD 147.26 million in January 2026 to a deficit of USD 61.91 million in February 2026. This followed a combination of an increasing import bill (rebound following conclusion of the election period) and declining export receipts during the month.
3.2 Merchandise Exports
Export earnings increased by 63.7 percent on an annual basis to USD 1,374.18 million in February 2026 from USD 839.28 million in February 2025. This growth was mainly driven by higher receipts from gold, maize, coffee, beans, cement, and crude oil (excluding petroleum products).
Gold export earnings more than doubled, increasing by 156.7 percent from USD 318.71 million to USD 818.16 million over the same period. This was largely due to higher global gold prices supported by increased demand for gold as a safe-haven asset amid geopolitical uncertainties, as well as continued reserve diversification by central banks.
Similarly, coffee export earnings rose to USD 180.98 million in February 2026 from USD 167.68 million in February 2025. This increase was mainly driven by higher export volumes, which rose to 651,933 sixty-kilogram bags from 555,756 bags, on account of improved production. The increase in volumes more than offset the decline in prices whereby the average unit price of coffee declined by 8.0 percent, from USD 5.03 per kilogram in February 2025 to USD 4.63 per kilogram in February 2026.
However, month-on-month, there was a decline in export earnings from USD 1,453.53 million in January 2026 to USD 1,374.18 million in February 2026. The main drivers for this decline were gold, beans, and fish & its products and oil re-exports during the month. The decline in gold exports during February 2026 was as a result of the war which disrupted trade in the Middle East, a huge market for Uganda’s gold.
| Product | Feb-2025 | Jan-2026 | Feb-2026 |
Feb-2026 vs Feb-2025 % Change |
Feb-2026 vs Jan-2026 % Change |
|---|---|---|---|---|---|
| Total Exports | 839.28 | 1,453.53 | 1,374.18 | 63.73 | -5.46 |
| Coffee | |||||
| Value Exported | 167.68 | 161 | 180.98 | 7.94 | 12.41 |
| Volume Exported (Millions of 60 Kg Bags) | 0.56 | 0.57 | 0.65 | 17.31 | 15.13 |
| Average Unit Value (US$ per Kg of Coffee) | 5.03 | 4.74 | 4.63 | -7.99 | -2.36 |
| Non-Coffee Formal Exports | 613.93 | 1,218.63 | 1,118.77 | 82.23 | -8.19 |
| of which: | |||||
| Mineral Products | 318.71 | 913.95 | 818.16 | 156.71 | -10.48 |
| Cotton | 2.62 | 0.76 | 0.78 | -70.16 | 2.39 |
| Tea | 4.07 | 4.72 | 4.07 | 0.12 | -13.77 |
| Tobacco | 17.05 | 7.14 | 5.94 | -65.19 | -16.9 |
| Fish & Its Prod. (Excl. Regional) | 11.95 | 13.09 | 11.28 | -5.64 | -13.87 |
| Simsim | 6.58 | 1.68 | 1.35 | -79.54 | -19.85 |
| Maize | 4.51 | 7.91 | 10.01 | 121.68 | 26.53 |
| Beans | 3.88 | 9.22 | 4.58 | 17.98 | -50.33 |
| Flowers | 5.14 | 6.76 | 6.27 | 21.93 | -7.3 |
| ICBT Exports | 57.67 | 73.9 | 74.43 | 29.05 | 0.72 |
3.3 Destination of Exports10
Despite the war, the Middle East remained Uganda’s largest export destination in February 2026, accounting for 47.6 percent of the country’s total exports. On a country specific level, the United Arab Emirates absorbed the largest share, taking up 98.7 percent of Uganda’s exports to the region. Other notable trading blocs East African Community (EAC) which accounted for 20.1 percent and Asia accounting for 16.7 percent of Uganda’s total exports during the month.
3.4 Merchandise Imports11
In comparison to the same month the previous year, the import bill grew by 65.2 percent from USD 883.82 million in February 2025 to USD 1,436.10 million in February 2026. This growth was majorly attributed to higher import volumes for mineral products (excluding petroleum products); machinery, equipment, vehicles & accessories, chemical & related products; vegetable products, animal, beverages, fats & oil; as well as plastics, rubber, & related products.
However, on a monthly basis, the value of merchandise imports increased by 9.9 percent, from USD 1,306.27 million in February 2025 to USD 1,436.10 million in January 2026. This was mainly attributed to higher volumes from formal private sector imports particularly; mineral products (excluding petroleum products); vegetable products, animal, beverages, fats & oil; base metals and their products, among others.
3.5 Origin of Imports
During the month of February 2026, Asia and the Rest of Africa regions were the largest source of Uganda’s imports, accounting for 31.2 percent and 29.3 percent, respectively. Within Asia region, the major sources were China, India and Japan accounting for 49.3 percent, 24.1 percent and 8.7 percent of the total imports from that region, respectively. Other notable sources of Uganda’s imports included the EAC at 22.9 percent, the Middle at 7.9 percent and the European Union at 5.5 percent of the total imports, respectively.
3.6 Trade Balance by Region
During the month of February 2026, Uganda recorded a trade surplus with both the Middle East and European Union amounting to USD 539.74 million and USD 56.21 million, respectively. On the other hand, trade deficits were recorded with Asia (USD 218.46 million), Rest of Africa (USD 371.33 million), EAC (USD 53.40 million) and Rest of Europe at USD 10.89 million.
| Region | Feb 2025 | Jan 2026 | Feb 2026 |
|---|---|---|---|
| Middle East | 182.37 | 559.9 | 539.74 |
| European Union | 64.93 | 77.23 | 56.21 |
| Rest of Europe | 12.46 | -5.23 | -10.89 |
| EAC | -19.8 | 41.52 | -53.4 |
| Asia | -204.03 | -174.88 | -218.46 |
| Rest of Africa | -92.32 | -341.15 | -371.33 |
| Other Countries | 11.85 | -10.12 | -3.77 |
4 Fiscal Developments12
Provisional fiscal data shows that Government operations in the month of March 2026 resulted into a net borrowing position worth Shs 376.02 billion. This was lower than the planned Shs 903.15 billion. The lower deficit was on account of lower than planned expenditure that more than offset the effect of revenue shortfalls on the deficit during the month.
| Shs Billion | Program | Outturn | Performance | Deviation |
|---|---|---|---|---|
| Revenues (Including grants) | 3,272.59 | 2,732.9 | 83.5% | -539.69 |
| Domestic Revenue | 2,987.14 | 2,702.31 | 90.5% | -284.83 |
| Taxes | 2,665.94 | 2,527.09 | 94.8% | -138.85 |
| Other revenue (Non-tax revenue) | 321.2 | 175.23 | 54.6% | -145.98 |
| Grants | 285.45 | 30.58 | 10.7% | -254.87 |
| o/w: Project support | 285.45 | 30.58 | 10.7% | -254.87 |
| Expense | 3,456.51 | 2,863.35 | 82.8% | -593.16 |
| Compensation of employees | 419.13 | 411.52 | 98.2% | -7.61 |
| Purchase of goods and services | 879.64 | 636.57 | 72.4% | -243.07 |
| Interest | 968.88 | 954.16 | 98.5% | -14.72 |
| o/w: domestic | 807.65 | 779.43 | 96.5% | -28.22 |
| o/w: foreign | 161.23 | 174.73 | 108.4% | 13.5 |
| Grants | 971.3 | 787.67 | 81.1% | -183.63 |
| Social benefits | 95.09 | 40.73 | 42.8% | -54.36 |
| Other expense | 122.46 | 32.7 | 26.7% | -89.76 |
| Gross operating balance | -183.92 | -130.46 | 70.9% | 53.46 |
| Net Acquisition of Nonfinancial Assets | 719.23 | 245.56 | 34.1% | -473.67 |
| Net borrowing (deficit) | -903.15 | -376.02 | __ | __ |
4.1 Revenues and Grants
Revenue including grants amounted to Shs 2,732.90 billion, posting an 83.5 percent performance against the Shs 3,272.59 billion target for the month. This translated in a Shs 539.69 billion shortfall as both domestic revenues as well as grants were below their respective targets for the month.
4.1.1 Domestic Revenues
Domestic revenues in March 2026 amounted to Shs 2,702.31 billion, posting a 90.5 percent performance against the Shs 2,987.14 billion target, and thus a shortfall of Shs 284.83 billion for the month. Of the total collections, Shs 2,527.09 billion were tax revenues while Shs 175.23 billion were non-tax (other revenue) collections for the month.
During the month, all the tax heads fell short of their respective targets. Direct domestic taxes amounted to Shs 852.97 billion, falling short of the Shs 917.97 billion target by Shs 65.00 billion shortfalls were registered under PAYE, withholding tax and corporate tax during the month.
Similarly, indirect domestic taxes registered shortfalls of Shs 59.40 billion as VAT and excise duty collections fell short of their targets for the month.
The shortfall registered under taxes on international trade amounted to Shs 39.68 billion respectively, partly on account of lower than anticipated exports duing this month.
4.1.2 Grants
Total grants received during the month amounted to Shs 30.58 billion, implying a modest 10.7 percent performance rate against the target for the month. This reflects timing mismatches whereby funds programmed to be disbursed in March 2026 for the various projects were not disbursed in that particular month.
4.2 Expense
Government expenses during the month amounted to Shs 2,863.35 billion against the planned Shs 3,456.51 billion for the month, implying a performance of 82.8 percent. This performance was on account of the lower than planned spending registered under purchase of goods & services, grants to other government entities and other expenses during the month.
4.2.1 Net Acquisition of non-financial assets
During the month, government spent Shs 245.56 billion on acquisition of non-financial assets which included among others infrastructure projects. This was against the Shs 719.23 billion plan for the month, hence a 34.1 percent performance rate.
5 East Africa Community Developments
5.1 EAC Inflation13
As was the case in the previous month, annual headline inflation across the EAC Partner States showed mixed trends during the month of March 2026, slightly decreasing in Uganda and Rwanda, increasing in Kenya and remaining unchanged in Tanzania.
Headline inflation in Kenya slightly picked up from 4.3 percent in February to 4.4 percent in March 2026, mainly driven by prices increases for commodities under the food & non-alcoholic beverages and the transport & housing basket compared to the previous month.
In Rwanda, headline inflation slightly declined to 7.7 percent in March, from 7.9 percent in February 2026. This decline was mainly driven by a slowdown in price increases for items in the food & non-alcoholic beverages, housing water, electricity, gas and other fuels compared to the previous month.
On the other hand, annual headline inflation in Tanzania remained unchanged at 3.2 percent between February and March 2026.
5.2 EAC Exchange Rates14
During March 2026, all local currencies for the EAC partner states recorded depreciations against the US Dollar. The Ugandan, Kenyan and Tanzanian Shillings registered depreciations of 4.5 percent, 0.3 percent and 0.4 percent while the Rwandan and Burundi Franc depreciated by 0.2 percent and 0.02 percent respectively during the month.
These depreciation paths are partly explained by global strengthening of the US Dollar, increased Dollar demand particularly by importers and reduced forex earnings key sectors such as tourism and mining during the month.
Figure 24 below shows EAC Currencies’ gains and losses against the US Dollar over the past 12 months.
5.3 Trade Balance with EAC15
During the month of February 2026, Uganda traded at a deficit worth USD 53.40 million with the rest of the EAC Partner States compared to the surplus registered the month before. This was on account of a 50.4 percent increase in the import bill which more than offset the 5.9 percent increase in export receipts over the same period.
Total exports to the region amounted to USD 275.87 million, while imports amounted to USD 329.27 million during the month.
At country specific level, Uganda traded at surpluses with Burundi, Rwanda, South Sudan and the Democratic Republic of Congo worth USD 6.71 million, USD 25.46 million, USD 41.83 million and USD 119.55 million respectively. On the other hand, she traded at deficits with Kenya and Tanzania amounting to USD 100.93 million and USD 146.03 million. Such huge deficits can be attributed to the non-tariff barriers which continue to constrain Uganda’s exports to these two countries as seen in figure 25.
Compared to the same Month last year (February 2025), the trade deficit widened from USD 19.80 million, to USD 53.40 million this year as the imports grew at a much faster rate than the exports over this period.
Glossary
| Term | Description |
|---|---|
| Bid to cover ratio | This is an indicator for the demand of Government securities in a given auction. A ratio equal to 1 means that the demand for a particular security is equal to the amount offered by the government. A ratio less than 1 means the auction is under subscribed and a ratio greater than 1 means that the auction is over subscribed. |
| BTI | The Business Tendency Index measures the level of optimism that executives have about current and expected outlook for production, order levels, employment, prices and access to credit. The Index covers the major sectors of the economy, namely construction, manufacturing, wholesale trade, agriculture and other services. The Overall Business Tendency Index above 50 indicates an improving outlook and below 50 a deteriorating outlook. |
| CIEA | CIEA is constructed using seven variables, that is; private consumption estimated by VAT, private investment estimated by gross extension of private sector credit, government consumption estimated by its current expenditure, government investment estimated by its development expenditure, excise duty, exports and imports. Data comes with a lag of one month. |
| Core Inflation | This is a subcomponent of headline inflation that excludes items subject to volatility in prices. It excludes energy, fuels, utilities, food crops and related items. |
| Headline Inflation | This refers to the rate at which prices of general goods and services in an economy change over a period of time usually a year. |
| Non-Performing Loan | This is a sum of borrowed money upon which the debtor has not made scheduled payments for a period usually at least 90 days. |
| Tenor | This refers to the time-to-maturity of a financial instrument, for example, if a certain instrument matures after 91 days – it is called a 91-day tenor. |
| PMI | The PMI is a composite index, calculated as a weighted average of five individual sub-components; New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%). It gives an indication of business operating conditions in the Ugandan economy. The PMI above 50.0 signals an improvement in business conditions, while readings below 50.0 show a deterioration. The PMI is compiled on a monthly basis by Stanbic Bank Uganda. |
| Yield to Maturity (YTM) | Yield to maturity (YTM) is the total return anticipated on a treasury instrument if the instrument is held until it matures. |
| Month on Month | Is a way to measure the percentage change in a value from one month to the next. |
| Year on Year | Is a method of comparing data for a specific period (e.g., a month or quarter) with the same period in the previous year. |
Online Resources
Visit us online at mepd.finance.go.ug.
The entire history of data used for this and previous Performance of the Economy Reports - subject to data revisions - can be downloaded at mepd.finance.go.ug/apps/macro-data-portal.
An interactive display of leading economic indicators and a GDP nowcast is available at mepd.finance.go.ug/apps/macro-monitor.
Data on Private Sector Credit, CIEA and External sector has a lag of one month.↩︎
Data is reported with a lag↩︎
Revenue and Expenditure numbers are still undergoing reconciliation↩︎
Data on inflation for D.R.C and South Sudan is not readily available.↩︎
Data on Exchange Rates for D.R.C, South Sudan and Somalia not readily available.↩︎
Data comes with a month lag.↩︎
Data on Private Sector Credit has a lag of one month.↩︎
Data on Private Sector Credit has a lag of one month.↩︎
Statistics on trade come with a lag of one month.↩︎
Other Countries include: Australia and Iceland.↩︎
Statistics on trade come with a lag of one month.↩︎
Fiscal data is preliminary.↩︎
Data on inflation for D.R.C and South Sudan not readily available.↩︎
Data on Exchange Rates for D.R.C, South Sudan and Somalia not readily available.↩︎
Data for Somalia not readily available↩︎