The Uganda Shilling is having its moment in the sun. At a time when regional currencies are stumbling under global pressures, the Shilling has quietly—and steadily—emerged as East Africa’s strongest currency. It’s outperforming the Kenyan shilling, Rwandan franc, and Tanzanian shilling against the US dollar, a development that’s raising both eyebrows and hopes.
The question now is: what’s behind this remarkable stability? Is it the result of sound economic management, or is Uganda simply riding a wave of market resilience and luck?
To begin with, the macroeconomic fundamentals tell a story of deliberate discipline. Uganda’s central bank has maintained a tight monetary stance, keeping inflation largely in check while allowing the exchange rate to adjust flexibly. The Bank of Uganda’s policy interventions—particularly its careful management of forex reserves and measured use of open market operations—have cushioned the shilling from shocks that have rattled neighbors.
On the fiscal side, despite public debt pressures, the government has shown relative restraint. Oil investments, stable agricultural exports, and diaspora remittances have all contributed to a steady inflow of foreign exchange. While not every policy has been flawless, the overall mix reflects a government trying, however imperfectly, to maintain macroeconomic balance.
But markets are not run on spreadsheets alone. Part of the Shilling’s strength stems from Uganda’s resilient private sector and a financial system that has adapted well to post-COVID realities. Investors—both local and foreign—are showing renewed confidence, buoyed by improved revenue collection, moderate GDP growth, and a predictable regulatory climate.
Still, not everything can be explained by textbook economics. There’s an element of psychology—perhaps even optimism—that continues to shape Uganda’s economic narrative. And no one captures that better than the ever-charismatic Minister of Finance, Hon. Matia Kasaija, who once reminded his colleagues in typical Ugandan humor: “Colleagues, money will come.”
That phrase, which has since become something of a national meme, may sound casual, but it speaks to the enduring spirit of Uganda’s economy—resilient, hopeful, and somewhat audacious. In a region battling inflation, debt distress, and currency depreciation, Uganda’s confidence stands out.
However, sustaining this strength will require more than optimism. Structural reforms, industrial diversification, and export competitiveness remain crucial. A strong currency can be both a blessing and a burden—it lowers import costs but can also make exports less competitive. The balance between stability and growth must be carefully managed.
For now, though, Uganda can take a modest victory lap. The Shilling’s performance is a sign that a blend of discipline, resilience, and yes—a dash of Kasaija’s “money will come” optimism—can go a long way in weathering economic storms.
The real test, as always, will be maintaining that confidence when the winds shift.
