Uganda’s business rebounds, but fragile

What the report says

Ugandan businesses are ending the second quarter of 2026 with stronger confidence, even as many continue to face high costs and weak demand, according to the Uganda Business Climate Index from the Economic Policy Research Centre (EPRC), reported by The Independent Uganda. The index rose to 124.9 from 104.8 in the January-March period, a sign that firms expect conditions to improve in the months ahead.

The improvement was broad-based but uneven. The services sector saw the sharpest rebound, helped by better customer demand and more commercial activity, while agriculture also improved slightly on the back of better weather and seasonal factors. Manufacturing remained under pressure, with businesses citing expensive inputs, low factory use, soft demand and reduced profitability. The report also links some of the strain to higher fuel and transport costs, which have been pushed up by global disruptions, including renewed conflict in the Middle East affecting energy markets.

The article says businesses remain cautious despite the better outlook. Most firms kept staffing levels unchanged, and only a small share hired new workers, suggesting that confidence has not yet translated into stronger job creation. Companies also identified competition, taxes, unreliable electricity and a weaker shilling as ongoing concerns. The report further noted that Uganda’s May 2026 Ebola outbreak affected a significant share of businesses, especially in accommodation, transport and related services, adding another layer of disruption to an already fragile recovery.