Certified Public Accountant Frederick Kibbedi.
As 2024 winds down, Uganda stands on the cusp of transformative opportunities amid its complex socio-economic landscape. The Bank of Uganda (BoU) Monetary Policy Statement for December 2024 offers a clear direction for stakeholders to navigate the new year. It is time to simplify the insights for the ordinary Ugandan and encourage all economic players to align their strategies for success.
2025 is an electioneering year in Uganda (elections take place in 2026), historically marked by volatility, aggressive policing, and economic uncertainty. Yet, the BoU’s decision to maintain the Central Bank Rate (CBR) at 9.75 percent sends a strong signal of economic stability.
With inflation projected to remain low (3.7 percent in FY2024/25), businesses can expect relative price stability—a rare boon during election cycles. However, the focus must remain on strategic positioning to mitigate potential disruptions.
Implications for various stakeholders
Low inflation and stable borrowing costs create opportunities for service businesses to expand. With several banks restructuring and introducing new leadership, service providers in technology, logistics, and consulting should position themselves to tap into opportunities in financial services modernisation.
For traders, particularly importers of durable goods, a stable shilling is good news. However, with the Uganda Revenue Authority (URA) aggressively pursuing tax compliance, traders must tighten their books and adopt robust tax management strategies. Coffee and other agricultural cooperatives stand to benefit from favourable weather conditions supporting crop production.
Additionally, global demand for sustainably sourced products aligns well with Uganda’s burgeoning emphasis on Environmental, Social, and Governance (ESG) standards.
Exporters can leverage increased Foreign Direct Investment in the extractive industries and the commencement of oil production in 2025/2026. The geopolitical risks highlighted in the policy demand vigilance, particularly for exporters dealing with volatile global markets. Manufacturers should gear up for increased domestic demand driven by GDP growth projections of up to 7.5 percent over the medium term. However, global inflationary pressures and potential supply chain disruptions remain risks. Diversifying supply sources and adopting lean manufacturing processes can provide a buffer.
A thriving pension sector and stable economic growth create opportunities for long-term investment in infrastructure and productive assets. As a business advisory professional, I believe monetary policy offers a blueprint for assisting clients across sectors. Here is how I view it: Tax Advisory Services: With URA’s aggressive compliance measures, businesses need strategic advice to align with tax regulations and avoid penalties. Business resilience planning: Helping clients prepare for potential election-related disruptions by diversifying operations and securing liquidity.
ESG compliance guidance: Supporting businesses in meeting international ESG standards to sustain partnerships with global players.
Investment advice: Encouraging strategic investments in high-growth sectors like agriculture, oil, and extractives. Uganda’s 2025 holds immense promise despite the inherent challenges of an election year.
With economic growth accelerating and strategic interventions by stakeholders, the nation can stride confidently toward socio-economic transformation.
However, vigilance will be key—from ensuring compliance under the tight tax regime to seizing ESG-driven global opportunities.
CPA Frederick Wanume Kibbedi is a partner at PKF Uganda, & 8th president of the Institute of Certified Public Accountants of Uganda.
