Ugandan investors respond to Museveni's "non-dormant term": cautious optimism coexists with challenges
Following the swearing-in of Ugandan President Yoweri Museveni for his seventh term on May 12, and his designation of this five-year period as a "kisanja of no sleep" to expedite economic transformation, the country's business and investment communities have responded positively yet cautiously. Investors generally welcome the government's clear policy direction, but also focus on key practical issues such as anti-corruption effectiveness, improvements in the business environment, and policy stability.
"No Hibernation" Agenda: A Clear Roadmap for Economic Transformation
Mr Museveni’s inaugural speech provided a clear blueprint for investors. At the heart of this “non-hibernation” agenda is a shift from the longstanding “hard investment” in infrastructure to a “soft focus” on wealth creation, industrialisation and high value-added industries.
The President emphasized that the focus of his new term would be on supporting the private sector to lead the economy, and vigorously developing commercial agriculture, manufacturing, information and communication technology, as well as the service industry. He particularly reiterated the long-standing position of banning the export of unprocessed raw materials, aiming to create more jobs through domestic processing and enhance the value of exports. Furthermore, Uganda is expected to initiate commercial oil production during this term, which is regarded as one of the strongest engines driving the country's economic takeoff.
Investors' response: confidence and pragmatic demands
The private sector has given Museveni a "vote of confidence" for his re-election and new policy direction, but at the same time, it has also presented a detailed "wish list".
I have confidence in the macro direction
Investors have welcomed the continuity of policies and the stability of the macroeconomy. Uganda's economy is currently growing at a rate of about 7% per year, and the government aims to achieve growth of 6.5% to 7% in the next fiscal year, with plans to increase the total economic output to $500 billion by 2040. The business community, represented by organizations such as the Uganda National Chamber of Commerce, believes that Museveni's re-election ensures stability in infrastructure investment and regional integration processes, which are crucial for long-term business planning.
Despite the right direction, investors have clearly pointed out the practical obstacles that must be addressed to achieve the "non-dormant" agenda:
Anti-corruption is a top concern: investors warn that corruption is a "parasite" that erodes business costs and efficiency. They call on the government to go beyond slogans and effectively combat corruption through digital systems and strengthened accountability, which is key to enhancing the confidence of domestic and foreign investors.
Reducing business costs: The costs associated with electricity, Internet plus, fuel (especially aviation fuel), as well as railway transportation and pipeline infrastructure, are a common focus of attention for both the president and investors.
Financing and tax reform: Small and medium-sized enterprises contribute about 70 per cent of Uganda’s GDP but still face regulatory hurdles and high credit costs. Investors are calling for more “patient capital” from the government through institutions such as the Uganda Development Bank and a review of unjustified taxes such as the textile levy, which is based on weight rather than value.
Policy uncertainty: Controversy over the Sovereignty Bill
The optimism of investors this time is also subtly influenced by a recent legislative controversy. Just two weeks before his inauguration, Museveni publicly clarified the "Sovereignty Bill" that had sparked market concerns, emphasizing that the bill aims to protect the country's autonomy in policy-making and is in no way intended to hinder foreign direct investment, remittances from expatriates, or private capital flows. He made it clear that the core of the bill is to prevent external forces from interfering in Uganda's domestic affairs, while the free market economy and the free flow of private capital will be protected.
Overall, investors have “cautious expectations” for Museveni’s seventh term. The slogan “A term that never sleeps” sets the tone for the government’s execution. Analysts point out that Museveni’s government has successfully shifted the narrative from “what we have built” to “what wealth we have created”, which is in line with the expectations of the private sector.
However, as pointed out at the National Performance Review Conference, Uganda still faces serious challenges in terms of poor coordination, funding gaps, and implementation. For this eastern African country, the real test lies in whether the president's grandiose rhetoric can be translated into lower electricity prices, less corruption, more convenient financing channels, and real income growth for every household within the next five years. Investors are closely watching to see whether actions will truly follow the echoes of slogans.
