Press Release No. 26/017

Washington DC: On January, 12, 2026 the Executive Board of the International Monetary Fund (IMF) concluded the Post-Financing Assessment (PFA) with Uganda^[1] and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis.[2] The authorities have consented to the publication of the Staff Report prepared for the PFA discussions.

Uganda has navigated the post-pandemic environment relatively well, though progress in rebuilding durable fiscal space has been limited. Real GDP growth rose to 6.3 percent in FY24/25, inflation stabilized below 4 percent, and the estimated current account deficit narrowed to 6.1 percent of GDP, supported by strong coffee exports. Foreign exchange reserves increased to over three months of import coverage by October 2025, partly reflecting strong portfolio inflows in 2025. However, the overall budget deficit widened to 6 percent of GDP in FY24/25 from 4.7 percent in FY23/24, and public debt reached 52.4 percent of GDP.

Uganda’s capacity to repay the IMF is assessed as adequate, though subject to risks. In a downside scenario involving large portfolio outflows, adverse terms-of-trade shocks, and further delays in the oil project, repayment indicators would weaken but remain within adequate levels.

Looking ahead, macroeconomic conditions are expected to remain favorable with an additional boost from oil production, which is projected to start in late 2026. The authorities recognized the need for fiscal adjustment and reaffirmed their commitment to vigilant monetary policy and exchange rate flexibility, to safeguard macroeconomic stability and repayment capacity.

 

Executive Board Assessment

In concluding the PFA with Uganda, Executive Directors endorsed staff’s appraisal, as follows:

Uganda’s robust macroeconomic performance continued, supported by strong domestic demand, favorable external conditions, and prudent monetary policy. Real GDP growth accelerated to 6.3 percent in FY2024/25, inflation remained contained, and the current account deficit narrowed significantly. Foreign exchange reserves increased, and investor sentiment improved, reflecting high real returns and Uganda’s relative stability in a volatile regional environment. However, fiscal vulnerabilities are on the rise due to elevated overall deficits and a high debt servicing burden. While public debt remains sustainable, it faces risks from domestic financing pressures and weaknesses in the budgetary process.

Staff assesses Uganda’s capacity to repay the Fund as adequate under both baseline and downside scenarios. Repayment indicators under the baseline scenario remain below median thresholds for ECF countries. Risks to repayment capacity arise from potential portfolio outflows, commodity price shocks, further delays in oil production, and governance weaknesses. A downside scenario indicates that, even under significant external and domestic shocks, Uganda’s repayment position would remain manageable, although policy buffers would come under strain.

Staff recommends a multi-pronged policy approach to safeguard macroeconomic stability and repayment capacity. Fiscal consolidation should be accelerated through durable revenue mobilization and rationalization of current spending. The authorities’ updated domestic revenue mobilization strategy rightly focuses on measures to improve tax administration but should also bring forward tax policy measures including rationalization of tax expenditures and strengthening and broadening the tax base. The authorities should prioritize PFM reforms to enhance budget discipline and limit the scope for accommodating frequent in-year spending requests. The implementation of the adopted oil revenue frameworks is important to safeguard oil revenues and preserve fiscal discipline.

Monetary policy should retain its data-driven and forward-looking approach. As inflation risks recede, a gradual easing could support private sector credit growth. Strengthening monetary policy transmission and promoting financial deepening, particularly through FinTech-enabled lending and improvements in credit infrastructure—will be critical to supporting private sector activities and fostering inclusive growth. The recent securitization and repayments of BoU advances reflect progress in limiting central bank financing; adhering to the agreed repayment schedule and limiting BoU advances to the limits stipulated under the PFM Act remains important to fend off risks of fiscal dominance and ensure monetary policy credibility.

Exchange rate flexibility remains essential to absorb external shocks and preserve competitiveness. Rebuilding of FX reserves should continue in a sustainable and durable manner. The pilot gold purchase program offers potential to support FX reserves buildup but must be carefully managed to mitigate financial and operational risks.

The financial sector remains resilient, with improved asset quality and capital buffers. However, rising sovereign-bank linkages warrants close monitoring. Strengthening supervision, risk management, and regulatory framework, especially in the context of expanding FinTech lending, is necessary to safeguard financial stability.

 

 

 

Table 1. Uganda: Selected Economic and Financial Indicators, FY2023/24-2030/31 1,2
	2023/24	2024/25	2025/26	2026/27	2027/28	2028/29	2029/30	2030/31
	Act.		Proj.
	(Annual percentage change, unless otherwise indicated)
Output, prices, and exchange rate
Real GDP	6.1	6.3	6.2	9.4	6.9	6.7	6.4	5.7
Non-Oil real GDP	6.1	6.3	6.2	6.0	6.0	6.0	6.0	6.0
GDP deflator	5.4	5.2	4.3	4.5	4.6	4.5	4.9	4.7
Headline inflation (period average)	3.2	3.5	3.3	4.5	4.9	5.0	5.0	5.0
Core inflation (period average)	3.0	3.9	3.3	4.2	4.9	5.0	5.0	5.0
Terms of trade ("–" = deterioration)	8.2	11.4	3.3	3.3	2.4	2.9	2.3	2.3
Exchange Rate (Ugandan Shilling/US$)  ("–" = appreciation)	0.7	-2.5	…	…	…	…	…	…
Real effective exchange rate ("–" = depreciation)	3.3	4.6	…	…	…	…	…	…
Money and credit
Broad money (M3)	8.7	13.3	11.8	14.8	12.3	12.0	12.8	11.3
Credit to non-government sector	9.7	10.3	8.9	10.5	9.1	8.6	9.3	9.3
Bank of Uganda policy rate (percent) 3	10.3	9.8	9.8	…	…	…	…	…
M3/GDP (percent)	20.4	20.7	20.9	21.0	21.1	21.2	21.4	21.5
NPLs (percent of total loans)3	4.9	3.7	…	…	…	…	…	…
Central government budget
Revenue and grants	14.1	14.7	14.9	16.0	16.5	16.6	16.9	17.0
Of which: grants	0.5	0.6	0.6	0.5	0.4	0.3	0.2	0.2
Of which: oil revenue	0.0	0.1	0.1	1.2	1.7	1.8	2.1	2.1
Expenditure	18.8	20.7	21.5	21.9	21.9	21.6	21.9	21.9
Of which: Current	13.2	15.2	15.8	15.5	15.8	15.8	15.9	16.2
Of which: Capital 4	5.4	5.2	5.2	5.4	5.6	5.6	5.6	5.6
Overall balance	-4.7	-6.0	-6.6	-5.9	-5.4	-5.0	-5.1	-4.8
Of which: Net domestic borrowing	4.2	5.7	5.0	5.0	4.7	4.3	4.5	4.1
Primary balance	-1.6	-2.3	-2.0	-1.4	-0.6	0.0	0.0	0.6
Public debt
Public gross debt5	50.6	52.4	54.5	54.1	54.3	54.3	54.2	54.3
External6	28.1	27.3	27.3	25.8	24.6	23.6	22.6	21.9
Domestic	22.5	25.1	27.1	28.3	29.7	30.6	31.7	32.4
Investment and savings
Investment	22.4	22.8	23.0	23.7	24.2	24.5	24.9	25.3
Public	5.4	5.2	5.2	5.4	5.6	5.6	5.6	5.6
Private	17.0	17.4	17.8	18.1	18.5	18.9	19.2	19.8
Savings	14.6	16.7	18.9	20.7	21.5	23.0	23.2	23.7
Public	0.5	-0.9	-1.7	-0.5	0.1	0.5	0.5	0.8
Private	14.1	17.6	20.5	21.2	21.4	22.5	22.7	23.0
External sector
Current account balance	-7.8	-6.1	-4.1	-3.1	-2.7	-1.5	-1.7	-1.5
Current account balance (excluding grants)	-7.8	-6.1	-4.3	-3.3	-2.8	-1.7	-1.8	-1.6
Exports (goods and services)	18.6	21.3	23.2	27.4	27.8	26.1	24.5	23.6
Imports (goods and services)	27.6	28.9	27.9	29.2	28.5	25.6	24.2	23.8
Gross international reserves
In billions of US$	3.2	4.3	5.8	7.5	8.0	8.7	8.9	9.2
In months of next year's imports of goods and services	2.2	2.7	3.1	3.8	4.2	4.4	4.2	4.2
Memorandum items:
GDP at current market prices
Ush. billion	203,708	227,879	252,221	288,422	322,457	359,757	401,588	444,553
US$ billion	53.9	61.8	…	…	…	…	…	…
GDP per capita (Nominal US$)	1,174	1,307	1,412	1,502	1,559	1,645	1,734	1,812
Exchange Rate (Ugandan Shilling/US$)	3,778.5	3,685.4	…	…	…	…	…	…
Population (million)7	45.9	…	…	…	…	…	…	…
Interest payments (in percent of revenue)	203,708	227,879	252,221	288,422	322,457	359,757	401,588	444,553
Sources: Ugandan authorities and IMF staff estimates and projections.                                                                                                             1 Fiscal year runs from July 1 to June 30.                                                                                                                       2 All figures are based on the 2016/17 rebased GDP.                                                                                                                      3 Latest available data. NPLs: June 2025; BoU policy rate: November 2025.                                                                                                                         4 Capital expenditures include net lending and investment on hydropower projects and exclude BoU recapitalization. 5 Debt is on a residency basis.                                                                                                                     6 External debt includes publicly guaranteed debt.                                                                                                                          7 Based on preliminary figures from the 2024 census by the Uganda Bureau of Statistics.

 

 

[1]After the end of an IMF lending program, a country may be subject to a Post Financing Assessment (PFA). It aims to identify risks to a country’s medium-term viability and provide early warnings on risks to the IMF’s balance sheets. For more details click here.

[2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.