When the shilling falls, Ugandans pay the price

What the report says

In a commentary published by The Independent Uganda on October 7, 2026, policy analyst Wilson Manishimwe argued that the recent depreciation of the Uganda shilling is increasing costs for households and businesses. He said the currency had weakened amid global political tensions, higher oil prices and strong demand for dollars from corporate buyers, with the exchange rate reaching about UGX 3,920 per US dollar by September 2026, up from an earlier average of UGX 3,605.

The piece says the impact is felt most directly through imported goods such as fuel, food, medicines and vehicle parts. Manishimwe used examples to show how a weaker shilling raises the local-currency cost of imports, leaving traders to absorb losses, cut margins or pass costs on to consumers. He noted that transport workers, including boda boda riders, may raise fares when fuel and maintenance become more expensive.

The commentary also pointed out that the currency move does not affect everyone the same way. Exporters can benefit because their foreign earnings convert into more shillings, though that advantage may be reduced if they rely on imported inputs. Businesses with dollar-denominated loans face the opposite effect, as their debt becomes more expensive in shilling terms. The article cites Finance Ministry figures showing Uganda’s merchandise import bill at USD 1.612 billion in June 2026, underscoring the pressure created when import demand grows faster than export earnings.

As broader context, the author argues that the longer-term response is to expand domestic production, add value to exports and reduce reliance on imported goods where local alternatives exist.