Imagine waking up in Uganda and checking the dollar rate before checking the morning news. A trader in Kikuubo wonders whether to adjust prices again. A boda boda rider worries about the next fuel increase. A farmer struggles to afford fertilisers, while parents wonder how they will manage rising school expenses. The dollar has become an uninvited guest at every Ugandan’s table. Nobody invited it, yet everyone seems to be paying its bill.
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But why is the shilling under pressure, and what must Uganda do to turn things around?
The answer lies partly in a simple economic reality: Uganda needs dollars to pay for many of the things it imports, but the dollars coming into the country do not always match the demand. We earn foreign exchange from coffee, gold, tourism, remittances and investment. Yet we spend heavily on fuel, machinery, medicines and other goods from abroad. When more people need dollars than the market can readily supply, the shilling weakens.
Our challenge is not simply that we import too much. It is also that we have not built enough domestic capacity to produce many of the goods we consume. We sell our products abroad, sometimes with little value added, only to spend part of our earnings buying finished products we could gradually learn to make ourselves.
There is another problem: fear can feed the very situation people are trying to avoid. When businesses expect the shilling to lose more value, they may rush to buy dollars before the rate worsens. That extra demand can put even greater pressure on the currency. In such circumstances, confidence matters almost as much as the actual supply of foreign exchange.
This brings us to government policy. The Protection of Sovereignty Act, 2026, has raised questions about whether regulating foreign funding and foreign agents could affect investor confidence and legitimate financial flows. Protecting Uganda’s sovereignty is important. No country should surrender its right to determine its own future. But protecting that right must go hand in hand with protecting the economy on which citizens depend.
If a law creates uncertainty that discourages legitimate investment, it could add to existing economic pressures. Whether that has happened, and how much it has contributed to the shilling’s decline, must be established through evidence. It would be misleading to blame one law for every movement in the exchange rate. Global dollar movements, fuel demand, debt payments and other market forces also play a role.
Nevertheless, government must be willing to examine the consequences of its decisions honestly. Parliament should review how the Act is being implemented, assess its effects on lawful investment and financial flows, and amend provisions where evidence shows that they create unnecessary obstacles.
A country cannot legislate its way to prosperity while ignoring the economic consequences of its decisions.
Uganda must also focus on earning more dollars rather than endlessly worrying about how expensive they have become. This means investing in local industries, adding value to agricultural products, supporting exporters and making tourism more competitive. The more goods we can produce and sell successfully, the better our chances of strengthening foreign-exchange earnings and creating jobs.
Government should also examine the timing of major dollar payments, especially for fuel and other essential imports, and improve transparency about foreign-exchange flows. We cannot eliminate imports overnight, but we can reduce unnecessary dependence on them and manage our foreign-currency needs more carefully.
Most importantly, economic recovery must mean something to ordinary people. It is not enough for officials to discuss exchange rates while households struggle with the cost of food, transport, fuel and education. Government must address supply bottlenecks, monitor the effect of currency movements on essential goods and act where there is evidence of unfair pricing.
I do not believe Uganda must choose between sovereignty and investment. Nor do I believe the falling shilling has a single cause. What I believe is that sovereignty must be exercised with economic wisdom. A policy may sound convincing in principle, but its real value must also be judged by its consequences.
Uganda can recover, but not through slogans, blame or temporary reassurance. It requires clear policies, investor confidence, stronger domestic production and the courage to correct mistakes when evidence demands it.
History rarely remembers the applause that accompanies a policy announcement. It remembers whether the policy worked.
The shilling does not respond to political speeches; it responds to supply, demand and confidence. If Uganda is to bounce back, sovereignty must be matched by sound economic management—and the true measure of our independence must include the ability of ordinary citizens to live and work with dignity.
The Author is a Policy Analyst, Political Commentator and Social Worker
