Free Access | July 2026

Uganda Business Climate Improves amidst elevated risks from the renewed conflict in the Middle East

Authors/Editors: Brian Sserunjogi (PhD) ,  Rehema Kahunde ,  Hildah Namuleme ,  Mudoko Eric

Abstract:

Uganda’s Business Climate Index (BCI) increased significantly by 20.1 index points to 124.9 during the April–June 2026 quarter, from 104.8 registered in the January–March 2026 quarter. The index captures two issues—the business situation and business outlook sentiments. The significant improvement in the BCI was largely driven by favourable sentiments in business outlook expected during the July–September 2026 quarter. At the sectoral level, current sentiments of doing business improved in the services and agriculture sectors but declined slightly in the industry sector during the quarter under review. The services sector recorded the largest improvement, with sentiments increasing from –28.0 percentage points in the January–March 2026 quarter to 21.9 percentage points in the April–June 2026 quarter, while agriculture improved from –43.0 to –27.9 percentage points. In contrast, business sentiments within the industry sector declined slightly from –41.7 to –42.2 percentage points. During the current quarter, the top five business challenges in Uganda were competition among businesses within the same sector, reduced demand for goods and services, tax-related challenges, macroeconomic pressures and electricity-related challenges.