As budget cuts in both the public and private sectors continue to hit Uganda, businesses in the fast-moving consumer goods and hospitality industries are feeling the pinch. Lower sales and decreased foot traffic are being observed in the market, signaling a challenging first half of 2024.
The government’s spending cuts, attributed to reduced tax revenues and high debt costs, have affected various ministries and agencies. A supplementary budget of Ush1.3 trillion ($342 million) was introduced to address emerging needs.
While distributor sales of consumer goods have dipped in Q1 2024, restaurants are also witnessing a decline in sales. Loan applications and approvals in commercial banks have decreased, affecting sectors like transport, communications, and business services.
Despite these challenges, some sectors like transport and communications have shown slight growth. However, personal loans segment credit growth has declined.