Overview: A Steady Growth Trajectory
Uganda’s economy is sustaining a robust growth path, with real GDP expanding by 6.3% in FY2024/2025, up from 6.1% in the previous year. The World Bank’s 26th Uganda Economic Update, titled Cultivating Prosperity Through Agro-Industrialization, emphasizes that this momentum is underpinned by a concerted shift toward agro-based value chains, export-oriented agriculture, and improved productivity across farming, processing, and logistics sectors.
agro-industrialization at the Core
The report spotlights agro-industrialization as a central driver of inclusive growth. By moving from subsistence to market-oriented farming and integrating processors, agribusinesses, and financial services, Uganda aims to raise farm incomes, create jobs, and attract investment. Improvements in post-harvest handling, storage, and milling are highlighted as critical levers to reduce losses and increase domestic value addition.
Key Sectors Driving Growth
Several agricultural subsectors are contributing to the GDP uptick and export earnings. Coffee, a mainstay of Uganda’s export mix, is benefiting from better global demand and quality improvements. Tea, fruits, vegetables, and cereals are expanding through enhanced irrigation, mechanization, and climate-smart farming practices. The update also points to emerging agro-processing clusters that link farmers with mills, packaging plants, and logistics networks, creating a more resilient supply chain.
Productivity and Innovation
Productivity gains stem from better seed systems, extension services, and access to credit for smallholders and mid-sized agro-enterprises. Digital platforms for market information, mobile money, and better weather data are helping farmers plan crops and manage risk. The report emphasizes that productivity gains must be inclusive, reaching women and youth across rural districts to ensure broad-based prosperity.
Policy and Institutional Framework
Achieving sustained agro-industrial growth requires a stronger policy environment. The update recommends streamlining land tenure processes, reducing transaction costs for investors, and strengthening rural infrastructure—roads, storage facilities, electricity, and cold chains. Public-private partnerships are encouraged to scale processing capacity and improve regional trade connectivity, which can boost competitiveness and export diversification.
Macro-Fiscal Context and Risks
Uganda’s growth remains resilient amid global volatility, with inflation and external financing conditions monitored closely. The World Bank notes that macro-fiscal discipline, prudent debt management, and targeted social spending will be essential to maintain growth without overheating the economy. Potential risks include climate-related shocks, commodity price fluctuations, and the need to modernize land and labor markets to fully harness agro-industrial potential.
Inclusive Growth and Social Outcomes
Inclusive development is a central objective. By expanding agro-processing, jobs in rural areas increase, helping to reduce rural poverty and stabilize household incomes. The update stresses that gender-responsive policies, access to finance, and improved nutrition and health services will reinforce long-term economic resilience as the agro-industrialization drive matures.
Looking Ahead: What Comes Next
To sustain the 6+ percent growth, Uganda will need sustained investment in agri-inputs, irrigation schemes, and storage infrastructure, alongside reforms that unlock private investment in agro-based manufacturing. The 26th Uganda Economic Update calls for targeted interventions to bridge the urban-rural divide and accelerate the country’s transition toward a more diversified, climate-smart, and export-oriented economy.
