Traders Raise Alarm Over Rising Fuel Prices, Cost of Credit and Shilling Depreciation

KAMPALA, Uganda — The National Entrepreneurs and Traders Associations (NETA Uganda) has called on the government to urgently intervene in rising business costs, warning that expensive fuel, a weakening shilling and higher borrowing costs are putting pressure on households and micro, small and medium enterprises (MSMEs).

The association has urged the Ministry of Finance, Planning and Economic Development to convene an urgent public-private dialogue within 14 days to address the economic challenges facing traders, manufacturers, farmers and other business operators.

Speaking to journalists in Kampala on Friday, NETA Uganda president Dr Thadeus Musoke Nagenda said the economic pressures were affecting businesses across the country, with many reporting reduced sales, limited working capital and difficulties retaining employees.

NETA Uganda brings together traders from major commercial centres, including Kikuubo, Owino and Kisekka, alongside farmers, boda boda operators, manufacturers and entrepreneurs from different parts of the country.

“Uganda remains a country of great opportunity. However, the current economic environment is testing the resilience of our people,” Musoke said.

He warned that the combined impact of rising fuel prices, currency depreciation, inflation and expensive credit was reducing business profitability while increasing the cost of living for ordinary Ugandans.

Traders Warn of Rising Cost of Doing Business

NETA Uganda cited recent monetary policy tightening by the Bank of Uganda as one of the factors likely to increase financial pressure on businesses.

The association said the Central Bank Rate had been raised to 12 per cent on October 14, 2026, from 9.75 per cent, marking the first increase in two years.

It warned that the increase could translate into higher commercial lending rates, making it more expensive for businesses to borrow money for stock, expansion and daily operations.

The association called on the Ministry of Finance and the Bank of Uganda to expand credit guarantee schemes and risk-sharing facilities targeting viable MSMEs.

It also urged commercial banks and other financial institutions to avoid blanket increases on existing MSME loans and consider restructuring facilities for businesses with good repayment records.

According to NETA Uganda, access to affordable financing remains essential for small businesses that depend on borrowed capital to maintain stock, pay workers and meet operational expenses.

The association also expressed concern over the depreciation of the Uganda shilling, which it said had increased the cost of importing goods and raw materials.

A weaker shilling raises the local-currency cost of imported merchandise, fuel and production inputs, potentially forcing traders to increase prices or absorb additional costs at the expense of their profit margins.

Fuel Prices Under Scrutiny

The association identified rising fuel prices as another major concern, citing their impact on transport, distribution, manufacturing and food prices.

According to figures presented by NETA Uganda, petrol prices in Kampala had risen to between Shs6,950 and Shs7,000 per litre, compared with approximately Shs5,090 in March 2026.

Diesel prices were reported at between Shs6,780 and Shs7,000 per litre.

The association attributed the increases to several factors, including geopolitical tensions in the Middle East, international oil prices, shipping costs, depreciation of the shilling and an excise duty increase that took effect in July.

It called on the Uganda National Oil Company (UNOC) to provide greater transparency regarding fuel pricing, stock holdings and profit margins.

NETA Uganda also asked the government to review the recent fuel excise duty increase, arguing that reducing avoidable costs could ease pressure on businesses and consumers.

The association warned that higher fuel prices have far-reaching consequences because transport costs influence the prices of goods moving from production centres to markets across the country.

For traders, particularly those operating on narrow profit margins, the rising cost of transporting merchandise can make it increasingly difficult to maintain affordable prices.

Inflation Threatens Household Purchasing Power

NETA Uganda further raised concerns about inflation, saying rising prices were eroding household purchasing power and weakening consumer demand.

The association cited headline inflation of 4.6 per cent in September, up from 4.1 per cent in August, and referred to Bank of Uganda projections indicating that inflation could rise further over the following 12 months.

It warned that higher transport fares and food prices would disproportionately affect households with limited incomes, while businesses could struggle to pass additional costs on to consumers.

“For the ordinary Ugandan, this means higher transport fares, higher cost of food, higher cost of bringing goods from Mombasa, and reduced profit for the trader who cannot increase prices because the customer the mwananchi has no money,” the association said in its statement.

It added that reduced consumer spending could further weaken sales and limit the capacity of small businesses to maintain employees.

Call for Investment in Agriculture and Food Processing

Beyond immediate economic pressures, NETA Uganda urged the government to invest in agricultural storage facilities, cold-chain infrastructure, irrigation and value addition to reduce post-harvest losses.

The association argued that inadequate storage and processing facilities force farmers to lose part of their produce, contributing to supply shortages and higher prices for consumers.

It cited the example of tomato farmers in Mbale and Mubende, saying losses at the production stage ultimately affect consumers in Kampala and other urban centres.

The association said strengthening agricultural value chains would help stabilise food supplies, improve farmers' incomes and reduce unnecessary costs between producers and consumers.

It also called for greater support for domestic manufacturing and agro-processing as part of efforts to reduce Uganda's dependence on imported goods.

Government Urged to Clear Domestic Arrears

NETA Uganda called on the Uganda Revenue Authority (URA), Uganda National Bureau of Standards (UNBS), Kampala Capital City Authority (KCCA) and local governments to prioritise taxpayer education, predictable enforcement of regulations and simplified licensing procedures.

The association said a more predictable regulatory environment would help businesses plan better, comply with tax obligations and direct more resources towards growth.

It also urged the government to pay verified domestic arrears owed to suppliers, arguing that timely payments would inject money into businesses and support economic activity.

According to the association, delayed payments can leave suppliers struggling to meet their own financial obligations, including salaries, taxes, loan repayments and payments to other businesses.

BUBU Seen as Long-Term Solution

For a sustainable response to the economic pressures, NETA Uganda called for measures to increase foreign exchange earnings, strengthen local production and expand exports.

The association reaffirmed its support for the Buy Uganda, Build Uganda (BUBU) policy, urging the government and private sector to accelerate domestic manufacturing, agro-processing and the export of value-added products, including coffee.

It argued that producing more goods locally and exporting higher-value products would help Uganda earn foreign exchange, reduce unnecessary imports and strengthen the shilling over time.

NETA Uganda also encouraged its members to maintain proper accounting records, practise financial discipline, meet their tax obligations and avoid unjustified price increases that could further burden consumers.

The association said economic stability should be measured not only through national indicators but also by its impact on households and businesses.

“Economic stability must be felt in the pocket of the mother buying food in Nakawa, the youth running a workshop in Katwe, and the trader stocking her shop in Arua. It should not be just numbers on paper,” the statement said.

NETA Uganda called on the Ministry of Finance, Planning and Economic Development to convene a time-bound public-private dialogue within 14 days and publish a clear action matrix outlining measures to reduce avoidable business costs.

The association said it remained committed to constructive engagement with the government in pursuit of practical solutions that protect businesses, sustain jobs and improve the livelihoods of Ugandans.