Kabweri County MP Patrick Godfrey Wakida has challenged the economic philosophy guiding President Yoweri Museveni's management of Uganda's economy, citing the shilling's sharp decline, rising inflation and higher borrowing costs as evidence that the strategy is not delivering results. Wakida questioned whether Musevenomics, the approach associated with Museveni that attempts to balance market forces, state guidance and national economic sovereignty, was achieving its stated goals. According to figures Wakida attributed to Bloomberg as of October 22, the shilling had become Africa's worst-performing currency in October, falling 14.68 per cent against the US dollar year-to-date and 7.29 per cent during the month alone.
The currency weakness reflects multiple pressures. Wakida cited capital outflows, increased dollar demand from manufacturers and energy importers, and elevated international oil prices as factors driving the depreciation. In a statement dated October 23, he said foreign investors had withdrawn about $200 million from Uganda's financial markets over two weeks, moving money towards higher-yielding US Treasury securities. The depreciation has coincided with rising domestic costs. Uganda Bureau of Statistics figures showed that annual headline inflation rose to 4.6 per cent in September from 4.1 per cent in August, while annual energy, fuel and utilities inflation reached 14.5 per cent. Year-on-year, petrol prices increased by 30.9 per cent and diesel prices by 42.5 per cent.
In response, the Bank of Uganda tightened monetary policy. On October 14, it raised the Central Bank Rate from 9.75 per cent to 12 per cent, seeking to contain inflationary pressures and support the shilling by tightening financial conditions. Wakida argues, however, that the government's broader approach reflects Museveni's preference for preserving foreign exchange reserves and encouraging domestic production rather than extensively intervening to defend the currency. The President has previously argued that Uganda should increase domestic production and exports instead of spending foreign exchange reserves to finance imports of non-essential goods. While preserving reserves protects against external shocks, a rapidly depreciating currency increases the cost of living and raises production costs before domestic alternatives become available.
The debate centres on Uganda's ambition to expand the economy tenfold by 2040, known as the Tenfold Growth Strategy, which seeks to grow the economy from approximately $50 billion to $500 billion. The strategy prioritises agro-industrialisation, tourism, mineral-based industrialisation, and science, technology and innovation. Wakida contends that the combination of currency depreciation, rising inflation and higher lending costs threatens this vision. Businesses in priority sectors require affordable financing, machinery, fuel and other inputs to expand production. Agricultural processors, for instance, could earn more shillings from export proceeds while simultaneously paying more for imported machinery, fertilisers, packaging materials and fuel. The immediate question is whether gains from expanding local production can materialise quickly enough to offset the pressures facing consumers and businesses.
The government's broader economic argument is that expanding local production and value addition will eventually reduce import dependence and generate more foreign exchange through exports. However, Wakida argues that expensive credit, stemming from the higher interest rates, could constrain investment in tourism and agro-industrialisation. The effectiveness of the approach will depend on the trajectory of the shilling, the persistence of inflationary pressures, access to affordable credit and the pace at which Uganda expands domestic production and export earnings.