SONA: Museveni bets on exports, agriculture to drive growth in next term

KAMPALA: President Museveni used his State of the Nation Address on Thursday to paint an optimistic picture of Uganda’s economic trajectory, highlighting strong growth in exports, expanding agricultural production and ambitious plans to accelerate the country’s transformation into an upper middle-income economy.

Delivering his first State of the Nation Address of the Seventh Parliament at Kololo Ceremonial Grounds, Museveni said Uganda’s economy remains on a firm footing, underpinned by peace and security, which he described as the foundation of sustained economic development.

The address, delivered ahead of next week’s national budget presentation, focused heavily on economic performance and the government’s strategy to grow the economy to $500 billion by 2040 through investment in agriculture, manufacturing, services and information communication technology (ICT).

According to the President, Uganda’s Gross Domestic Product (GDP) has grown to $69.3 billion using the foreign exchange method, up from $60.4 billion in 2025. GDP per capita has also increased to $1,278, placing Uganda in the lower middle-income category.

“This financial year, the economy is projected to grow by 6.4 percent and next financial year the GDP will grow by 10 percent, pushing the size of the economy to $80 billion. All this is before the start of the flow of our commercial oil,” Museveni said.

The President said Uganda’s economic prospects are being strengthened by a rapidly expanding export base that increasingly includes manufactured products.

“Uganda now exports manufactured goods, including pharmaceuticals, refined gold, steel, ICT products, ceramics, plastics and dairy products. Uganda’s exports reached $18 billion in the 12 months ending March 2026,” he said.

“We are now set for further and faster growth and transformation,” he added.

Four sectors to drive growth

Museveni said government will continue prioritising investment in four strategic sectors identified as drivers of long-term economic transformation: commercial agriculture, manufacturing, services and ICT.

The government also plans to deepen value addition in sectors such as minerals and agriculture while expanding investment in knowledge-based industries including automobile manufacturing, vaccine production and computer technologies.

Agriculture remains central to the strategy. Museveni cited significant growth in agricultural output over the past four decades, arguing that production levels now require broader regional markets to absorb increasing surpluses.

Milk production has grown from 200 million litres in 1986 to 5.4 billion litres today, while coffee output has increased from two million to 9.3 million 60-kilogramme bags annually. Fish production currently stands at 727,000 metric tonnes.

The President said government would continue providing affordable capital to farmers and small businesses through initiatives such as the Parish Development Model (PDM).

“There is already Shs557 million in every parish. It has reached 3.7 million households. We are going to put Shs100 million plus Shs15 million for leaders per annum per parish in rural areas and Shs300 million plus Shs15 million for leaders per ward in towns,” he said.

For larger enterprises, Museveni noted that government has capitalised the Uganda Development Bank (UDB) with Shs1.6 trillion to provide long-term financing at relatively affordable rates.

“With the big farmers and manufacturers, government has put a total of Shs1,600 billion in the Uganda Development Bank. The interest rate for that money is 12 percent per annum. The interest rates for PDM is six percent and payable after two years,” he said.

Infrastructure remains critical

Museveni said infrastructure development remains a key enabler of growth, noting that Uganda has largely completed major road links connecting the country to regional markets.

He reiterated government’s commitment to revamping the metre-gauge railway and constructing the Standard Gauge Railway to reduce transport costs and improve regional trade competitiveness.

The President also tasked the incoming leadership at the Ministry of Works and Transport to address corruption that has delayed implementation of some infrastructure projects.

Investors seek action on governance

While the address was rich in growth projections and investment plans, concerns about service delivery, corruption and rising public debt received limited attention.

Museveni acknowledged challenges in public services, including shortages of medicines in health facilities, but did not outline specific interventions to address them.

The President used the address to reiterate his “Kisanja, No More Sleep” message, which he linked to improving performance in both public service and economic management.

“It is no more sleep and, to clarify the message, I should add: no more corruption, no more leaning on your hoe when others are digging, and no more politeness to non-performers,” he said.

However, analysts argue that stronger action against corruption will be necessary if Uganda is to achieve its growth ambitions.

“The talk has been zero tolerance to corruption, but the question is what practical action will be taken. How will stolen funds be recovered and redirected into productive investments?” asked Ms Perry Aritua, Executive Director of Women’s Democracy Network-Uganda.

Economic analysts also warn that the country’s rising debt burden could constrain future investment.

“A big percentage of our budget goes to servicing debt. That means less money is available for public services and productive investments,” said Dr Brian Sserunjogi, a research fellow at the Economic Policy Research Centre.

Uganda’s public debt stood at approximately Shs130 trillion as of April.

The President’s address also made no reference to concerns within the tourism sector over the Ebola outbreak or the impact of rising fuel prices on businesses and households.

Nevertheless, government remains confident that continued investment in productive sectors, expanding exports and future oil revenues will sustain growth and accelerate Uganda’s economic transformation in the years ahead.