Uganda: BOU - Stronger Exports Key to Long-Term Shilling Stability

What the report says

Bank of Uganda Deputy Governor Prof. Augustus Nuwagaba said Uganda’s shilling will need stronger export earnings to remain stable over the long term, according to a Nile Post report distributed by AllAfrica. He made the remarks in Kabale, where he pointed to the link between foreign exchange inflows, dollar availability and exchange-rate stability.

Nuwagaba said the currency had been relatively steady in July, when it averaged about Shs3,704 to the US dollar, and noted that the central bank has tools to manage short-term pressure. However, he said sustained stability will depend more on Uganda’s ability to earn foreign currency through exports than on central bank intervention alone.

He urged greater exports of products such as coffee, milk and cocoa, along with more value addition to raise earnings. He also said improved access to credit for businesses would support growth, noting that private-sector lending remains constrained by limited domestic savings. The report says the Bank of Uganda has ongoing credit support schemes for productive sectors, including agriculture, small businesses and export-oriented enterprises.

More broadly, the comments highlight a familiar policy challenge for Uganda: balancing exchange-rate stability with broader efforts to expand production, attract foreign exchange and deepen domestic financing. The article also said recent market reports showed some weakening pressure on the shilling compared with the end of August.