Business confidence in Uganda high ahead of election season, says report

Business owners across Uganda are optimistic about growth prospects in the next quarter, driven largely by increased spending linked to the upcoming 2026 general elections.

This outlook emerges from the latest Uganda Business Climate Index (UBCI) report for April to June 2025, published by the Economic Policy Research Centre (EPRC) on Wednesday.

The UBCI reveals a modest rise in overall business confidence, with the index climbing 3.7 points—from 88.8 in the first quarter of 2025 to 92.5 currently—reflecting cautious optimism among the private sector.

Since its inception in 2012, the UBCI survey has tracked business sentiment across manufacturing, agriculture, and services sectors. The April-June survey covered 1,152 businesses, according to Rehema Kahunde, a macroeconomics researcher at EPRC. She notes that many business owners anticipate higher sales as political campaigns intensify nationwide.

“Businesses remain optimistic that election-related spending will boost sales,” Kahunde says, emphasizing the importance of a peaceful election cycle to sustain this positive momentum.

Among the sectors, services showed the strongest improvement, with the Business Confidence Index (BCI) rising by 2.4 points to 94.7, up from 92.3 in the previous quarter. Despite this gain, the sector’s score remains below the neutral benchmark of 100, which distinguishes above-average from below-average business conditions.

Conversely, agriculture and manufacturing experienced slight declines. Agriculture’s BCI slipped from 99.3 to 98.3, impacted by reduced activity and sales—largely due to falling global coffee prices discouraging farmers. Manufacturing confidence dropped from 81.6 to 79.9, as unstable power supply continues to hinder growth. Notably, 40% of surveyed businesses expressed concerns about disruptions during the transition of power distribution from UMEME to the Uganda Electricity Distribution Company.

Taxation remains the top challenge, with 18.7% of businesses citing pressure from the Uganda Revenue Authority as a key concern. Competition from informal traders offering lower-priced goods also poses difficulties.

Despite the generally positive outlook, Dr. Ibrahim Kasirye, EPRC’s Director of Research, cautions that most Ugandan businesses are not operating at full capacity. He adds that while the impact of election spending is expected to boost business activity, these effects will likely become more evident in future quarters.