I recently had a conversation with a long-time friend who runs a wholesale merchandise business. He shared his frustrations about sourcing quality supplies in sufficient volumes here in Uganda. He often finds himself waiting for imported items such as rice and salt from neighbouring countries, particularly Kenya and Tanzania.
Curious, I looked into Uganda’s recent trade patterns, and some findings were striking. Despite abundant land, favourable climate, and raw materials, our local production falls short of growing domestic demand.
Uganda remains a net importer of several key commodities: cereals (especially wheat and rice), potatoes, onions, salt, cement, and animal or vegetable fats and oils. In 2024 alone, cereal imports totalled $486 million, animal and vegetable olis $390 million, and salt, cement, and related products $206 million.
Potato imports reached $10 million. This trend highlights a critical issue: We continue to invest a significant share of our national capital in small-scale, low-value projects with limited impact, while large-scale manufacturing, industrial infrastructure, and transformative investments remain underdeveloped. Much of the responsibility for the large projects has been left to the private sector, which itself is constrained by financing, scale, and capacity.
Kenya offers a useful example: The Kenyan government has made deliberate and sustained investments in large-scale infrastructure, industrialisation, and agro-processing. Through special economic zones, industrial parks, and value-add manufacturing, Kenya is successfully integrating agriculture into manufacturing sectors such as textiles, leather, and processed foods.
These investments generated over $13 billion in export earnings in 2024 and created thousands of skilled jobs. Uganda’s development budget, by comparison, remains modest. In FY 2024/25, the Uganda Investment Authority reported $3 billion in licensed projects, mostly spread across small-scale industrial parks. Public allocations for agro-industrialisation, such as the $500 million FY2025/26 budget, represent less than 1 percent of GDP-far below Kenya’s investment share. Developing large-scale projects requires effective planning, significant capital, and access to affordable financing.
Yet, borrowing in Uganda remains prohibitively expensive. With interest rates averaging around 21 percent, a loan of Shs1 billion carries an immediate interest obligation of about Shs210 million, even before the money is deployed. Addressing this calls for government intervention and instituitional support. Recapitalising institutions like the Uganda Development Bank to enable them offer affordable, long-term financing to qualifying projects at single-digit interest rates, denominated in local currency.
Another critical avenue is encouraging public listing. Globally, most of the world’s largest corporations, such as Apple, Microsoft, and Amazon, are publicly listed, benefiting from wider access to capital, diverse boards of directors, and professional risk management. Uganda has only 18 listed companies (Kenya has 63), highlighting a major gap in our capital market development.
Expanding public listings would support large-scale projects with stable financing, stronger governance, and institutional longevity beyond their founders. To maximise the impact of large-scale investments, Uganda must also prioritise sectors where it holds a clear comparative advantage, including agro-processing, renewable energy, and ICT.
Developing integrated industrial and agro-processing parks would allow firms to share utilities, reduce production costs, strengthen supply chains, and link rural producers to national and regional markets. Finally, Uganda must reallocate its national budget to strike a strategic balance between supporting small businesses and investing in large-scale projects.
While initiatives such as the Parish Development Model have channelled significant resources to small enterprises, over-reliance on them limits broader economic transformation. Redirecting part of the budget towards capital-intensive, high-impact initiatives would create sustainable jobs, drive value addition, and strengthen economic resilience, while still nurturing the small business sector.