President Yoweri Museveni has declared that Uganda has officially transitioned from the cluster of Least Developed Countries (LDCs) to a Lower Middle-Income status, driven by sustained industrial growth, agricultural surpluses, and a structural shift toward a knowledge-based economy.
Delivering the 2026 State of the Nation Address (SONA) at the Kololo Ceremonial Grounds on June 4, the President painted a picture of a resilient economy that has expanded 17-fold over the last four decades. He assured both citizens and foreign investors that the country is now locked into a trajectory of faster growth and structural transformation.
According to the President, Uganda’s Gross Domestic Product (GDP) has grown exponentially from $3.9 billion (Shs14.8 trillion) when the National Resistance Movement (NRM) took power in 1986, to the current $69.3 billion (Shs263.3 trillion) using the foreign exchange method. When measured by Purchasing Power Parity (PPP), the President placed the economy at $197.1 billion.
“The GDP per capita has risen to $1,278 (Shs4.8 million), surpassing the international threshold for lower middle-income status, which stands at $1,136,” Mr. Museveni said. He added that household poverty had drastically declined from 56.4 percent in 1992 to 16.1 percent today, while life expectancy has jumped from 43 to 68 years. Infant mortality rates have similarly dropped from 122 deaths per 1,000 live births to 36.
The five phases of development
To contextualize the current economic posture, President Museveni outlined five distinct phases of development that Uganda has undergone since 1986.
The first phase focused on emergency recovery, which involved restoring the “3Cs” (Colonial, Cash crops, and Cooperatives) and the “3Ts” (Tourism, Tea, and Tobacco) of the old colonial enclave economy. This phase, he noted, successfully dismantled the informalized, chaotic economy inherited from Idi Amin’s regime, which was defined by magendo (smuggling), kibaanda (forex black market), and kusamula (reckless speculation).
The subsequent phases involved expanding and diversifying the economic enclave. Mr. Museveni highlighted how unconventional cash crops have transformed rural livelihoods. “That is how the dairy sector changed the cattle corridor, and how cassava is changing many parts of Uganda. These are totally new cash products,” he noted.
The fourth and fifth phases, according to the head of state, involve adding value to raw materials-such as refined gold-and ushering Uganda into a knowledge-based economy focused on domestic manufacturing of automobiles, medical vaccines, and computers.
Double-digit growth before first oil
Looking ahead, the President announced ambitious growth forecasts, projecting that the economy will grow by 6.4 percent in the current financial year before accelerating to a staggering 10 percent in the next financial year. This acceleration is expected to push the total size of the economy to $80 billion.
Notably, Mr. Museveni emphasized that these milestone figures are being realized even before Uganda begins commercial oil production from the Albertine Graben.
The country’s export basket has significantly widened, adding 31 new products over the last 15 years. Total exports reached $18 billion in the 12 months ending March 2026. Uganda now exports highly sophisticated and manufactured items, including pharmaceuticals, refined gold, structural steel, ICT components, ceramics, plastics, and dairy goods.
“The 67 percent of the people that have listened to our message, and friends from outside that have invested here, have turned our country into a country of surpluses,” the President stated.
To back his claims of agricultural and industrial abundance, the President rolled out a comparative statistical breakdown of Uganda’s production growth since 1986:
Product / Commodity
1986 Production
Current Production (2026)
Milk
200 million litres
5.4 billion litres
Coffee (60kg bags)
2 million bags
9.3 million bags
Fish
Negligible / Untracked
727,000 Metric Tonnes
Cement
4,900 Metric Tonnes
7 million Metric Tonnes
Maize
200,000 Metric Tonnes
5 million Metric Tonnes
Bananas
6.6 million Metric Tonnes
11 million Metric Tonnes
Sugar
152,000 Metric Tonnes
700,000 Metric Tonnes
Security and infrastructure backbone
The President, however, warned that wealth creation cannot sustained in a vacuum, asserting that peace, law, and order remain the ultimate prerequisites for economic success. While he commended the Uganda Peoples’ Defence Forces (UPDF) for guaranteeing national peace, he challenged the Police and the Judiciary to step up and strictly enforce law and order.
On infrastructure, Mr. Museveni detailed the NRM’s deliberate strategy to tarmac core national transit corridors connecting Uganda to its neighbors. Highways now run seamlessly from northern border points like Oraba, Nimule, and Musingo down to southern frontiers including Mutukula, Katuna, and Bunagana. Similar links connect eastern points like Busia and Malaba to western borders like Mpondwe and Ishasha, alongside dedicated tarmac networks linking vital water transport hubs like Jinja, Port Bell, and Bukakata.
To preserve these multi-billion-shilling road networks from premature wear and tear, the government plans to shift bulk haulage to alternative routes.
“We are revamping the metre-gauge railway and building the Standard Gauge Railway (SGR). We are also working with Kenya and Tanzania on pipelines for crude petroleum and refined products,” Museveni said. “This will move heavy cargo and petroleum products away from the roads to the railways and pipelines, leaving roads primarily for passengers and light cargo.”
In the energy sector, power generation capacity has expanded from a meager 60 Megawatts (MW) in 1986 to 2,098 MW. The President revealed that the long-term state target is 50,000 MW, to be tapped from a mix of hydro, solar, gas, wind, geothermal, and nuclear energy sources.
Capital injection into households
Addressing wealth distribution, the President criticized land fragmentation, noting that in developed nations, very few individuals own large tracts of land, yet they maximize output. He directed local leaders to ensure that government wealth-alleviation programs are effectively “downloaded” to the grassroots.
Over the next five years, the state intends to ensure every household with land accesses low-interest capital through the Parish Development Model (PDM). According to executive data, Shs 557 million has already been disbursed per parish, reaching 3.7 million households.
The government commits to injecting Shs 100 million annually per rural parish-plus an additional Shs 15 million for local leaders-while urban wards will receive Shs 300 million plus Shs 15 million for leadership structures. This will run alongside the Shs 760 billion already funneled into the Emyooga initiative operating at the constituency level.
“We are now set for further and faster growth,” the President concluded, urging all leaders to closely monitor these funds to wipe out the remaining 33 percent of homesteads still trapped in subsistence agriculture.