In a remarkable achievement for Uganda’s economy, the Uganda shilling has been recognized as the world’s most stable currency, outperforming major global currencies such as the U.S. dollar, the British pound, and the Hong Kong dollar. The stability of Uganda’s currency is attributed to effective fiscal management, low inflation, and strategic government interventions, even as the global economy faces volatility and political uncertainties, particularly in Uganda’s election year.
Ramathan Ggoobi, the Permanent Secretary and Secretary to the Treasury, confirmed this milestone during a briefing on the third-quarter budget performance in Kampala on January 8, 2026. He stated that the Uganda shilling appreciated by 2.45% in the year ending December 2025, underscoring the resilience of the nation’s currency in the face of both domestic and international challenges. According to Ggoobi, the shilling now stands at the forefront of global currency stability, followed by the British pound and the Hong Kong dollar.
Key Factors Behind the Shilling’s Resilience
Several factors have contributed to the shilling’s unprecedented stability, with fiscal discipline, low inflation, and government interventions being central to the currency’s performance. Ggoobi highlighted the government’s strategic actions in managing the country’s economic challenges, such as controlling food prices and stabilizing fuel costs, as key drivers of the shilling’s stability.
One of the most significant measures was the government’s decision to import fuel directly through the Uganda National Oil Company (UNOC), which helped insulate domestic fuel prices from global oil price shocks. By maintaining tight control over government expenditure, particularly during the election year—a period traditionally marked by inflationary pressures due to increased spending—the government was able to maintain price stability. Ggoobi noted that Uganda had achieved Africa’s lowest inflation rate over the past decade, which remained steady at 3.1% through November and December 2025, an anomaly for an election year when prices typically rise.
The stable inflation rate and the robust fiscal management allowed the shilling to perform better than other African currencies, even as many emerging markets struggled with inflation and currency depreciation. Ggoobi further confirmed that Uganda’s GDP growth had remained strong, with a growth rate of 6.3% for FY2024/25, and projections indicating a growth of between 6.5% and 7% in the current financial year. These figures position Uganda as a regional economic leader, reinforcing the stability of the shilling in global markets.
Government’s Strategic Economic and Monetary Policy
The government’s disciplined approach to fiscal management, alongside its monetary policy measures, has played a crucial role in stabilizing the currency. Uganda has focused on maintaining a strong capital base while promoting investment in critical sectors such as infrastructure, health, education, and wealth creation. The government’s ability to fund these sectors, even in the face of election-related pressures, further illustrates its capacity to manage economic challenges effectively.
Ggoobi’s statements also emphasized that the government’s success in implementing fiscal discipline was critical in sustaining the shilling’s performance. “The shilling’s stability reflects the underlying strength of Uganda’s economy,” he remarked. As a result, Uganda has emerged as a global outlier in terms of currency performance, particularly compared to major African economies like Egypt and South Africa, where the local currencies have weakened significantly against the dollar.
Uganda’s Growing Credibility Among Global Investors
The appreciation of the shilling over the past five years has significantly enhanced Uganda’s credibility among global investors. Patrick Ayota, Managing Director of the National Social Security Fund (NSSF), underscored the importance of the shilling’s steady performance during the 4th Uganda-UAE Business Forum. He pointed out that anyone who exchanged $10,000 into Ugandan shillings five years ago would now have $695 more when converting back, highlighting the impressive return on investment due to the currency’s stability.
Ayota also credited Uganda’s liberalized financial environment, which allows for the free movement of capital, as a crucial factor in attracting long-term foreign investment. He noted that Uganda’s free-floating exchange rate and absence of foreign exchange controls provided both local and international investors with the flexibility to engage with the market, further boosting investor confidence.
Uganda’s Economic Growth and Future Outlook
Uganda’s growing economy is projected to expand to $68.4 billion (Shs 249.4 trillion) by FY2025/26, reflecting a positive trajectory despite the challenges faced by many other countries in the region. The shilling’s stability is expected to play a key role in facilitating continued economic growth, particularly in sectors such as manufacturing, agriculture, and services, which are critical to the country’s economic transformation.
Looking ahead, Uganda is expected to maintain a strong focus on infrastructure development and resource management, ensuring that its economic policies align with the global push for sustainable growth. With continued efforts to improve fiscal management and attract foreign capital, the country is well-positioned to achieve its goal of becoming a middle-income economy in the coming years.
The Shilling as a Symbol of Economic Resilience
The Uganda shilling’s emergence as the world’s most stable currency in 2025 is a testament to the country’s impressive economic resilience and prudent fiscal management. Against the backdrop of global economic instability and domestic election pressures, Uganda has proven its ability to maintain price stability and economic growth through disciplined monetary and fiscal policies.
As the economy continues to expand and diversify, the stability of the shilling will remain a key factor in Uganda’s ongoing efforts to attract investment, foster growth, and secure its place as a regional economic powerhouse. With the government’s continued commitment to sound economic management, Uganda’s future looks promising, and the stability of the shilling will undoubtedly play a crucial role in this success.
