The shilling depreciated to around 4,100 per dollar at some commercial banks in early October, compared with approximately 3,730 on average in August. The weakening has cascading effects across Uganda's economy, raising costs for importers, traders and ordinary consumers buying everything from electronics to food to construction materials.
When importers face higher shilling costs to purchase the same dollar-denominated goods, they typically pass these expenses to consumers through price increases. A trader importing electronics worth $10,000 would need 37 million shillings at the August rate but 40 million shillings at the October rate for identical goods. Uganda's merchandise import bill reached approximately $1.61 billion in July 2026 alone, marking about a 25% increase compared with July 2025, making the country particularly vulnerable to exchange-rate movements.
The effects ripple through daily life. Fuel costs rise because Uganda imports refined petroleum products traded internationally in dollars. Transport operators, farmers and ultimately consumers feel the impact. Families saving to build homes find construction material prices have jumped. Even locally grown food carries exchange-rate costs through imported inputs and distribution expenses.
Not everyone loses from a stronger dollar. Ugandans exporting coffee, fish and other products earning dollars benefit when converting proceeds to shillings. Tourism operators and families receiving remittances abroad gain advantages. However, the overall challenge remains reducing Uganda's dependence on imports by investing in local manufacturing, agro-processing and value addition to capture more economic value domestically.