Uganda’s foreign exchange reserves have seen a major increase, jumping from $3.2 billion to $4.3 billion within one year. This rise represents about a 33% growth, giving the East African country stronger financial backing for imports and international transactions. The information was made public by top officials from Uganda’s Ministry of Finance and Central Bank.
Speaking at a press briefing in Kampala, the Permanent Secretary at the Ministry of Finance, Planning and Economic Development, Mr. Ramathan Ggoobi, said the country’s gross reserves now provide coverage for 3.8 months of imports. This is a significant improvement compared to last year’s 2.9 months. According to Ggoobi, the increase in reserves is a reflection of the government’s effort to manage Uganda’s economy more efficiently, even as challenges remain in areas like debt servicing and rising expenditure.
On his part, Mr. Jimmy Apaa, the Director for Financial Markets at the Bank of Uganda, said the rise in foreign exchange reserves is mainly due to direct purchases made by the Central Bank from the foreign exchange market. Between July 2024 and June 2025, the Central Bank reportedly bought nearly $2.2 billion worth of foreign currency from the open market. This bold move, according to Apaa, helped to strengthen the country’s financial position and provide a cushion for the economy.
Apaa noted that Uganda has enjoyed good foreign-currency inflows, particularly from the export of major commodities like coffee and cocoa. These commodities have remained competitive on the international market, providing the country with steady income in foreign currency. Uganda is one of Africa’s top coffee exporters and has seen increased demand for its cocoa beans as well.
Another source of the boost in forex reserves is the inflow of offshore investments into Ugandan government bonds. Apaa explained that investors from other countries are attracted to Uganda’s bond market because of the relatively high interest rates. These offshore inflows not only support the local currency, the Ugandan shilling, but also provide the government with funds for infrastructure and other key projects.
The Central Bank of Uganda has also shown interest in diversifying its reserve assets. It recently disclosed plans to start purchasing gold as part of efforts to make the country’s reserve holdings more stable and secure against currency volatility. Gold, being a global store of value, is expected to play a strategic role in strengthening Uganda’s financial foundation.
Uganda’s economy has seen impressive growth in recent years, thanks to heavy investments in infrastructure and the oil and gas sector. The government has invested billions of dollars in roads, bridges, power projects, and oil infrastructure. These efforts are aimed at positioning Uganda as a regional hub for trade and energy. The development of the oil sector, including the planned East African Crude Oil Pipeline (EACOP), is expected to bring in more revenue when production fully begins.
Despite the progress, there are growing concerns about Uganda’s rising debt levels. The cost of debt servicing has increased, raising questions about the long-term sustainability of public finances. Analysts say that while strong reserves provide short-term relief, more must be done to manage the country’s borrowing and spending.
Viewers also note that maintaining a high level of forex reserves is essential for economic stability, especially in times of global uncertainty. The reserves help the country respond to economic shocks, manage its currency, and reassure investors and international partners of Uganda’s financial health.
As Uganda continues to navigate economic reforms and external pressures, the increase in forex reserves comes as a timely boost. However, stakeholders are urging the government to use the breathing space wisely by implementing strong fiscal discipline, promoting exports, and reducing dependence on foreign loans.
