Uganda’s forex reserves double to $6.7 billion as investment case strengthens

KAMPALA, Uganda — Uganda’s foreign exchange reserves have roughly doubled to $6.7 billion, strengthening the country’s case as an investment destination as it prepares for the start of commercial oil production, economists and bankers said Wednesday.

Reserves rose from about $3.3 billion in January 2025 to $6.7 billion by June 2026, a build-up that, together with relative exchange-rate stability, offers reassurance to investors worried about currency and external-sector risks, economist Stella Otieno told an Equity Bank Uganda trade and investment webinar.

“The macroeconomic environment is favorable,” Otieno said, adding that Uganda’s current challenges should be viewed against an economy preparing for a major transformation driven partly by oil.

The stronger reserve position comes alongside sustained economic growth of more than 6% over the past three financial years, with inflation staying within the central bank’s target range. Otieno said real GDP growth for the 2025/26 financial year was about 6%, while inflation stood at 4% in July, below the medium-term target of 5%. The central bank rate has held at 9.75% since October 2024, giving businesses greater predictability for long-term decisions.

“Growth has been above 6% for the previous three years. Inflation has been stable and under 4% within the target, and we also have stable policy rates,” Otieno said.

She projected that growth could accelerate to between 8% and 10% in the 2026/27 financial year as oil production begins, potentially pushing Uganda into double-digit territory. Oil revenues are also expected to strengthen the country’s fiscal and external positions.

Otieno noted, however, that the fiscal deficit stood at an estimated 7.1% at the end of the 2025/26 financial year, making fiscal management and public debt important areas for investors to watch. She said expected oil revenues could help strengthen the fiscal position from 2026/27. Uganda’s current account deficit, estimated at 6.5% of GDP, was similarly described as manageable, with much of the pressure tied to private-sector imports linked to oil and infrastructure investment. Higher export earnings from oil are expected to help narrow the deficit once production starts.

The webinar was held ahead of Equity Bank’s third Trade Mission in Uganda, set for Sept. 13-16 in Kampala. The mission will bring together global, regional and local investors to explore opportunities, build partnerships and identify areas for collaboration with Ugandan businesses. This year’s mission will focus on agriculture — particularly coffee — as well as extractives, manufacturing, services and tourism.

Beyond oil, agriculture remains central to Uganda’s investment case, with coffee emerging as one of its most significant export opportunities. Otieno said coffee and gold were among Uganda’s largest sources of foreign exchange, and that Uganda became Africa’s largest coffee exporter in 2025. Coffee export earnings reached $2.2 billion in the 12 months to June 2026, underscoring opportunities across the value chain, from production and processing to logistics and export. For investors, she said, the opportunity extends beyond exporting raw commodities to building capacity for value addition, agro-processing and industrial production.

For Equity Bank, Uganda’s investment proposition goes beyond headline economic indicators. Catherine Psomgen, director of public sector and social investments at the bank, said investors needed more than promising statistics to build successful businesses. They also required reliable information, supportive policies, access to finance, credible local partners and financial institutions that understood their ambitions, she said.

“At Equity Bank, we see our role as extending beyond traditional banking,” Psomgen said. She said the bank seeks to act as a financial and business-enablement partner, connecting investors to finance, markets, information, technology and strategic relationships. With Equity Group’s presence across several African markets, she said the bank was well positioned to support businesses entering Uganda, both in reaching the domestic market and in using the country as a gateway to the wider East and Central African region.

Rita Nabateregga, deputy director for investment promotion at the Uganda Investment Authority, said the country was entering an important phase of industrialization as the government seeks to leverage its natural resources to create jobs and promote local value addition. She said Uganda’s agricultural and mineral resources offered significant opportunities as it moves from exporting raw materials toward greater processing and industrial production. For investors, she said, opportunities span agriculture and agro-processing, manufacturing, logistics, energy, minerals, infrastructure, tourism, services and technology.

The bigger challenge will be ensuring that rising investment translates into productive enterprises, jobs, local value addition and broader economic transformation — depending on how effectively capital, technology, expertise and partnerships are deployed to turn the country’s resources and expanding market into lasting businesses.