The United States has identified endemic corruption, shrinking democratic space, human rights violations, and weaknesses in public financial accountability as major obstacles facing investors in Uganda. According to a US Department of State report, these challenges are undermining the country's investment climate, despite Uganda's continued economic growth and increasing foreign direct investment. The report notes that corruption is a major impediment to investment, particularly in government procurement.
The report raises concerns about the treatment of politically connected individuals accused of corruption, saying that although Uganda has an established legal framework and several institutions mandated to fight graft, well-connected individuals often enjoy de facto immunity. The assessment acknowledges that Uganda has established a network of anti-corruption institutions and laws requiring bidders and contractors to disclose potential conflicts of interest when seeking government contracts. However, it says implementation remains a major weakness.
The report also questions the effectiveness of public financial oversight, particularly the government's use of supplementary and classified budget accounts, which it says undermines parliamentary and public scrutiny of expenditure. Although government budget documents and annual debt statistical bulletins are publicly available, the assessment says extensive reliance on supplementary and classified accounts, sometimes in violation of public finance laws, weakens accountability in the management of public resources.
On judicial independence, the report says corruption undermines the impartiality of the judiciary, while understaffing and a backlog of cases delay the resolution of disputes. It also cites reports of high-ranking government officials influencing court decisions, raising concerns about the justice system's ability to provide impartial remedies in disputes involving investors and government institutions. The report notes that the Inspectorate of Government and the courts are mandated to oversee compliance with administrative procedures.
Human rights and democratic governance also feature prominently in the assessment. The report says opposition supporters frequently face restrictions on organising demonstrations and holding political rallies, despite constitutional guarantees of freedom of assembly, speech, and expression. It further cites reports of security forces arresting opposition supporters and detaining them beyond constitutionally mandated limits.
The report links political uncertainty to the investment environment, noting that Uganda has never experienced a peaceful political transition. It points to questions surrounding succession to President Yoweri Museveni, who won a seventh term in the January 2026 elections with 72 per cent of the vote, amid reports of political violence and restrictions on democratic institutions. Speculation about the 2031 elections and the perceived absence of a succession plan add to uncertainty for investors.
Despite these challenges, the report acknowledges Uganda's economic performance and continued ability to attract foreign capital. The economy grew by 6.7 per cent in 2025, according to the International Monetary Fund, while foreign direct investment inflows increased by 8.8 per cent to a record $3.7 billion, largely driven by oil-related investments. Industrial activity recorded the strongest growth, followed by agriculture, as investments in preparations for oil production continued.
Key points
- The US has raised concerns over Uganda's endemic corruption and human rights abuses.
- Corruption undermines the impartiality of the judiciary and weakens accountability in the management of public resources.
- The report links political uncertainty to the investment environment, noting that Uganda has never experienced a peaceful political transition.
