Uganda’s economy expanded by 8.5% in the quarter ended December 2024, sharply up from 5.4% in the same period a year earlier, as surging consumer demand and a construction boom drove the country’s strongest growth performance in recent memory, the Finance Ministry announced Tuesday.
The government disclosed the figures in a post on the X platform, painting a picture of an economy gathering momentum just as it prepares to launch commercial oil production for the first time in its history — a milestone that could reshape Uganda’s fiscal standing across sub-Saharan Africa.
Finance officials credited the acceleration to a combination of strong household consumption and elevated activity in the construction sector. While the ministry did not break down sector-specific figures, both areas have been bright spots in Uganda’s growth story throughout 2024.
Consumer demand has been underpinned by steady remittance flows and a relatively contained inflation environment compared to the regional average. Meanwhile, large-scale infrastructure projects — not least the preparation of facilities connected to the country’s nascent oil industry — have kept the construction sector humming at elevated levels.
At the heart of Uganda’s economic transformation is the East African Crude Oil Pipeline (EACOP), a $5 billion undertaking that the Finance Ministry confirmed has reached 80% completion. The 1,443-kilometer (897-mile) pipeline will transport crude oil from Uganda’s western oil fields to the port of Tanga on Tanzania’s Indian Ocean coast, giving landlocked Uganda its first direct access to international energy markets.
The project, which has faced years of delays and intense scrutiny from international environmental groups and human rights organizations, is now in its final stages. Uganda’s oil fields are operated by France’s TotalEnergies and China’s CNOOC, two of the world’s largest energy companies, both of which have remained committed to the project despite sustained external pressure.
The pipeline has been a flashpoint for controversy, with critics raising concerns about its environmental footprint across ecologically sensitive areas in Tanzania and Uganda. Proponents counter that the revenue windfall will be transformative for one of East Africa’s most populous nations.
Uganda now projects commercial oil production to commence in the second half of 2026. The government forecasts it will collect 2.2 trillion Ugandan shillings — approximately $587 million — in revenues from oil exports in the 2026/2027 financial year, which runs from July to June.
That figure would represent a meaningful injection into Uganda’s national budget, which has long grappled with a narrow tax base and heavy reliance on foreign aid and development financing. Economists caution, however, that first-year projections for new oil producers have historically tended to be optimistic, and that production ramp-up timelines can slip.
Still, the broader economic backdrop is encouraging. An 8.5% quarterly expansion positions Uganda among the fastest-growing economies on the continent at a time when many of its neighbors are navigating currency pressures, debt distress, and slower post-pandemic recoveries. With oil revenues potentially arriving within the year, Uganda’s near-term economic outlook remains among the more constructive on the African continent.
