Uganda’s business confidence rose from 117.9 points between April and June 2025 to 125.6 points during the July-September 2025 period, reflecting a mixed bag of entrepreneur sentiment coupled with low consumer spending patterns, and weak government expenditure.

A score above 100 points implies strong business confidence levels while those below signal weak business confidence levels. A 100-point score implies neutral movement in business sentiments.

While business confidence levels in the services sector increased to 132.3 points between July and September 2025 – a consequence of exchange rate appreciation and higher demand for certain services particularly transport and events management associated with the election season – sentiments captured in manufacturing and agriculture suffered declines during the same period.

The latest data published by the Economic Policy Research Centre (EPRC), a Ugandan think tank, shows business confidence levels posted by the manufacturing sector fell to 84.1 points between July and September 2025 on account of rising taxation pressures and fairly high borrowing costs incurred by local producers.

Prime lending rates refer to discounted borrowing rates offered by commercial banks to high profile, less risky clients that possess valuable collateral, strong cashflows and business relationships among others.

Business confidence levels captured in the agricultural sector dropped to 105.5 points during the same period amid significant pressure from a prolonged dry spell that affected crop yields, harvests, farmers’ incomes and business opportunities for value chain actors such as agricultural inputs dealers.

A notable appreciation posted by the Uganda shilling against the US dollar during the third quarter of 2025 is cited for optimistic behaviour among business owners in the services sector.

The currency gains were attributed to fresh US dollar inflows driven by offshore investors eager to exploit new opportunities in Uganda’s debt market represented by higher interest rates earned on treasury bills and bonds.“The continued strengthening of the Uganda shilling against the US dollar, an appreciation of 2.7 percent in the quarter from an average mid-rate of Ush3,605.84/USD in June 2025 to Ush3,507.79/USD in September 2025, is among the positive sentiments mentioned.“The appreciation meant that businesses that rely on imported raw materials, machinery were spending less in shillings, lowering production and operating costs…” the EPRC survey report reads.

Besides clearing import orders, local businesses utilise US dollars for payment of rental bills among others, certain professional services and servicing of US dollar denominated loans.

According to Benoni Okwenje, General Manager for Financial Markets Operations at Centenary Bank, coffee exports, new capital inflows in the oil and gas sector and offshore investors that returned to this market generated considerable dollar inflows during the third quarter of 2025.

Analysis of Centenary Bank’s transactions shows forex demand by traders reduced this year, Okwenje said.

Despite signs of downturn witnessed in the manufacturing sector, rising election spending somewhat offers a boost to industrial growth prospects in the short term.“Electricity supply is improving and infrastructure projects are being implemented. But delayed payments due to contractors from the government are partly a cause of corruption in Uganda,” noted Stuart Mwesigwa, a senior executive at Roofings Group Limited.

Mr. Mwesigwa wonders why suppliers’ invoices issued to government entities are forced to wait for months before being cleared, even though the Treasury allocates huge budgets for works and transport projects.“On the other hand, the election season has proved a plus for our sector because of rising demand for construction materials that are bought by election candidates who distribute them in communities where they conduct campaigns to entice voters,” Mr Mwesigwa explains.

© Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).