Uganda faces possible economic troubles as new policies from President Trump and Vice President Vance take effect. The rising strength of the US dollar against the Ugandan shilling creates major risks for the country's money system. The shilling lost value by 0.7% against the dollar in January 2025, trading at an average rate of 3,688.96 shillings per dollar compared to 3,664.08 shillings in December 2024. This change started right after Trump won the election, according to Stephen Kaboyo, who runs Alpha Capital.
Companies in energy, oil, gas, telecom, and manufacturing need more dollars, which drives down the shilling's value. Looking at the full year, the shilling actually gained strength by 3.1% from January 2024 to January 2025. Beyond money exchanges, Uganda also feels pressure from stopped USAID funding that used to support health and development programs. Groups like the Infectious Disease Institute, The AIDS Support Organization, UNFPA, and the Presidential Malaria Initiative can't count on these funds anymore.
USAID recently cut money for UNAIDS as well, causing different reactions across Uganda. Ambassador Adonia Ayebare supported these cuts on social media, claiming UNAIDS work could be done by local health departments and Africa CDC instead. He wrote that UNAIDS pushes disputed cultural issues rather than saving lives, unlike PEPFAR, which he called "the real deal." These funding changes threaten jobs throughout Uganda, according to Dr. Michael Atingi-Ego from the Bank of Uganda.
The money market shows signs of stress due to higher dollar demand. Dr. Adam Mugume from the Bank of Uganda research team points out that changing exchange rates makes business planning harder. Some experts remain hopeful despite these challenges. Dr. Robert Isabalija believes Uganda can protect itself if the government acts quickly.
Most analysts agree that without proper government action, Uganda might see slower growth, more unemployment, and unstable currency rates. Trump administration policies have already affected Uganda's economy in measurable ways. The next few months will prove crucial as Uganda's leaders try to keep the economy stable during these challenging times. The Ministry of Finance has not yet calculated exactly how much damage these policy shifts might cause to Uganda's overall economic health.
Companies in energy, oil, gas, telecom, and manufacturing need more dollars, which drives down the shilling's value. Looking at the full year, the shilling actually gained strength by 3.1% from January 2024 to January 2025. Beyond money exchanges, Uganda also feels pressure from stopped USAID funding that used to support health and development programs. Groups like the Infectious Disease Institute, The AIDS Support Organization, UNFPA, and the Presidential Malaria Initiative can't count on these funds anymore.
USAID recently cut money for UNAIDS as well, causing different reactions across Uganda. Ambassador Adonia Ayebare supported these cuts on social media, claiming UNAIDS work could be done by local health departments and Africa CDC instead. He wrote that UNAIDS pushes disputed cultural issues rather than saving lives, unlike PEPFAR, which he called "the real deal." These funding changes threaten jobs throughout Uganda, according to Dr. Michael Atingi-Ego from the Bank of Uganda.
The money market shows signs of stress due to higher dollar demand. Dr. Adam Mugume from the Bank of Uganda research team points out that changing exchange rates makes business planning harder. Some experts remain hopeful despite these challenges. Dr. Robert Isabalija believes Uganda can protect itself if the government acts quickly.
Most analysts agree that without proper government action, Uganda might see slower growth, more unemployment, and unstable currency rates. Trump administration policies have already affected Uganda's economy in measurable ways. The next few months will prove crucial as Uganda's leaders try to keep the economy stable during these challenging times. The Ministry of Finance has not yet calculated exactly how much damage these policy shifts might cause to Uganda's overall economic health.
