Uganda Country Risk Report

Published 25 February 2015 | Quarterly

  • 40 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
Uganda Country Risk Report

Core Views

  • We maintain our view that economic growth in Uganda will quicken in pace in 2014 driven by a fast-growing consumer segment and accelerating investment into the infrastructure and extractive sectors. Still, we believe the outlook has softened slightly in recent months owing to the effects of the intensifying crisis in South Sudan and a weaker-than-expected recovery in credit growth.

  • We are more pessimistic than the government in our projections for the country's fiscal balance in FY2014/15. Official tax collection targets are likely to prove overly ambitious, particularly set against a recent softening in the outlook for the economy and Uganda's deteriorating relationship with foreign donors. Limiting expenditure to a 10% rise may also prove challenging against a backdrop of soaring capital spending and wage and election-related current spending pressures.

  • Despite negative international headlines, the approval of new anti-homosexuality legislation has provided a much-needed domestic popularity boost for President Yoweri Museveni ahead of the elections in 2016.

Major Forecast Changes

  • We believe that the outlook for the Ugandan economy over the coming months has dimmed slightly since our last update. We now predict that real GDP growth in the East African country will expand by 6.3% this year and 6.4% next year, compared to our previous projections of 6.6% and 6.8% respectively.

Key Risks To Outlook

  • Weather always poses risks to our outlook, as the Ugandan economy is heavily reliant on agriculture. Adverse weather conditions could seriously hamper economic output and stoke inflationary pressures, while favourable weather could boost productivity.

  • If there are further delays to oil production - currently scheduled to begin in 2017 - or if the industry moves more quickly than we anticipate, we would adjust our medium-to-long term forecasts accordingly.

  • The ongoing and deepening crisis in South Sudan poses a risk to our forecasts the...

Table of Contents

Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Museveni Makes Ambition Clear With PM's Sacking
Table: Political Overview
Long-Term Political Outlook
Political Challenges For Museveni Ahead
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
On The Up, But Not At Potential
Tab le: Ec onomic Acti vity
Balance Of Payments
Rising Imports To Drive C/A Deficit Wider In 2015
Table: Current Account
Monetary Policy
Currency Concerns Dictate Wait-And-See Monetary Policy
Tab le: Moneta ry Policy
Fiscal Policy
Spending Ambition, Low Tax-Take To Keep Deficit Wide
Table: Fiscal Policy
Chapter 3: 10-Year Forecast
The Ugandan Economy To 2023
A Decade Of Promise But Also Of Risk
Table: Long -Term Mac roeconomic Forecasts
Chapter 4: Operational Risk
BMI Operational Risk Index
Operational Risk
Table: Operational Risk
Transport Network
Table: Sub-Saharan Africa Transport Network Risks
Economic Openness
Table: Sub -Saharan Africa Economic Openness Risks
Table: Exports
Chapter 5: BMI Global Assumptions
Global Outlook
Reality Check: Uncertainty Reigns
Table: Global Assumptions
Table: Developed States, Real GDP Growth, %
Tab le: Em erging Markets , Real GDP Growt h, %

The Uganda Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Uganda. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Uganda's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of Uganda's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Uganda's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Uganda, including currency volatility, the commodity price boom and protectionist policies.

The Uganda Country Risk Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Uganda' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Uganda through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Uganda Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:


  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Uganda and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Uganda, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Uganda over the next 5-years?

BMI's Uganda country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Uganda Market - Political Strengths, Weaknesses, Opportunities and Threats facing Uganda.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Uganda's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Uganda’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Uganda's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Uganda?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Uganda against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Uganda’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

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The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express