Eronda
JF-Expert Member
- Dec 16, 2025
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President Museveni has attributed pressure on Uganda’s exchange rate to a shortage of foreign currency, saying the country must increase its dollar earnings from exports and tourism instead of relying on government interventions to stabilise the shilling.
Museveni made the remarks during an address at State House Entebbe to mark Uganda’s 64th Independence Anniversary, explaining how fluctuations in the dollar’s value affect exporters, importers and the wider economy.
He said coffee farmers could earn more in Uganda shillings when the dollar strengthens, even if the international price of coffee remains unchanged.
“If I sell my coffee and get the same two dollars, when the price of the dollar is Shs3,700, I get more shillings than when the dollar is worth less,” Museveni said.
However, he noted that a stronger dollar makes imports more expensive because businesses need more shillings to purchase the same amount of foreign currency.
The President explained that exchange-rate movements are influenced by the balance between the supply of dollars entering Uganda and demand for foreign currency to finance imports.
He cited disruptions to tourism, including fears associated with Ebola, as one of the factors that had affected foreign visitor numbers and reduced the inflow of dollars into the country.
Museveni said Uganda needed to strengthen its capacity to earn foreign currency to meet demand from businesses and other importers.
He also questioned the use of the country’s foreign exchange reserves to meet demand for dollars, arguing that scarce reserves should not be used to finance imports of non-essential goods.
The President cited imported perfumes and human hair products as examples of items consumers could reconsider purchasing when foreign currency supplies are under pressure.
He urged Ugandans to prioritise productive economic activities that generate foreign exchange, particularly through exports and tourism, to strengthen the country’s ability to pay for essential imports.
Museveni also pointed to Uganda’s relatively low inflation rate, which he put at about 4%, saying the country had not experienced the widespread price increases associated with high inflation.
He nevertheless acknowledged the need to understand the factors driving prevailing economic conditions and their effects on businesses and households.
The President’s remarks come amid concerns about exchange-rate movements and their implications for the cost of imported goods, business operations and household spending
Source: Nile Post