Jamada Musa Kalinda
At the height of a global trade crisis, it is surprising that the Ugandan economy is still experiencing substantial growth. In 2023, Uganda was removed from the United States’ African Growth and Opportunity Act, a preferential trade agreement that allowed it to export some goods to the US duty-free. In the same year, the World Bank suspended all new financing to Uganda over the Country’s discriminatory anti-homosexuality law.
Now, it is one of the Countries hit with the US “reciprocal” tariffs, with a 10 percent tariff on all Ugandan goods. Despite all this, Uganda’s economy has grown by 6.1percent according to a 2025 World Bank report. This growth is attributed to an increase in the services and industrial sectors, as well as investments in the oil sector.
Part of the reason for the near zero impact of the US trade policies against Uganda is the nature of its international trade; Uganda trades regionally within the East African Community, and internationally with other global economic partners, but not so much with the United States. Some of Uganda’s top export destinations are the DRC, South Sudan and Italy, and its major import origins are China, UAE, Kenya and India.
Gold is one of Uganda’s top exports, along with coffee and other agricultural products. On top of that, there is also a value-addition campaign in Uganda, through the parish development model and industrialisation. This has contributed to Uganda’s economic resilience and growth, but not significantly enough to shift Uganda’s international trade balance. This is because of both the limited output due to insufficient investment but also the absence of a market to export to.
Many of the global trade agreements Uganda has are largely for agricultural exports and raw materials. This is why Uganda’s balance of trade is substantially slanted in favour of some of its big trading partners. To address the export market challenge for industrial goods and further future-proof its trade portfolio, Uganda should fast-track its continental trade negotiations. Although the African Continental Free Trade Area Agreement was signed, Uganda, and many other African Countries have not yet negotiated full reciprocal tariff schedules to initiate trade on the AfCFTA.
This has left room for third-party states to continue benefiting from the African market despite the opportunity to widen the market for intra-African trade. Uganda’s trade relationship with countries outside of Africa, especially those with investment capital also needs to be diversified, from trade to investment. Not just industrial investment, but also investment in financial, communication and other services. Although Uganda offers tax exemptions; they are not attracting the right kind of foreign investment.
To attract high-quality investors, Uganda needs to negotiate investment agreements and the Ugandan investment market needs to offer more predictability and sustainability. Uganda’s investment environment is still heavily characterised by self-disparaging elements like corruption and political unpredictability; Uganda’s tainted human rights record and absence of a clear political transition leaves the country’s future unpredictable and therefore not very attractive for long-term investment. Predictable administrative systems build investor confidence, and despite its resilient economic policies, Uganda cannot boast of strong or predictable administrative systems, undermining its appeal as a worthy investment.
Kalinda Jamada Musa is an international trade
law scholar at the University of Cape Town.
