Wakida blames shilling depreciation on domestic economic policies

What the report says

Kabweri County Member of Parliament Patrick Godfrey Wakida has argued that Uganda’s weakening shilling is being driven largely by domestic economic pressures rather than only by outside shocks. In comments posted on his X account on October 9, 2026, and reported by The Independent Uganda on October 11, he pointed to falling foreign-currency inflows, investor uncertainty and stronger demand for dollars as key reasons for the currency’s decline.

Wakida said the shilling fell from about Shs 3,604 per US dollar in March to around Shs 4,027 in early October, a drop he estimated at 11.7 per cent. He compared Uganda’s performance with Kenya and Tanzania, saying their currencies had not weakened in the same way over the period. He also linked pressure on the foreign-exchange market to the exit of offshore investors from government securities and to concerns about the Protection of Sovereignty Bill passed by Parliament in May 2026.

The MP said rising dollar demand is also being fuelled by Uganda’s import bill, debt repayments and petroleum purchases. He said the Uganda National Oil Company, now the sole fuel importer, needs large monthly amounts of foreign currency. Wakida further argued that some export earnings from gold, coffee and tourism are not fully entering the domestic market because funds may be held abroad or converted later.

The report notes that the Bank of Uganda and market analysts have also cited import demand, higher energy costs and seasonal buying as factors behind the shilling’s slide. The central bank says it allows the exchange rate to move with market forces, while intervening mainly to reduce volatility. The debate matters because it highlights competing views on whether Uganda should focus on restoring investor confidence, reducing import dependence or using reserves to ease pressure on the currency.