Fitch Ratings has affirmed Uganda's Long-Term Issuer Default Rating at 'B' and retained a Stable Outlook. The agency framed the rating decision around a mix of structural constraints - including low GDP per capita and weak governance - and near-term supportive factors tied to imminent oil production.
Among the constraints highlighted are sizeable fiscal and current account deficits, a rising public debt load and a high interest burden on government finances. Counterbalancing these weaknesses, Fitch noted macroeconomic stability to date and the potential for stronger medium-term growth as oil production begins.
On growth, Fitch expects real GDP to expand by 6.3% in 2026 and to accelerate to 7.5% in 2027 once oil production starts in the first half of the year. The agency projects average oil output of 50,000 barrels per day in 2027, increasing to 210,000 barrels per day in 2028 as the Kingfisher and Tilenga fields scale up toward a combined full capacity of 230,000 barrels per day.
Inflation is forecast to average 4.4% in 2026, which Fitch notes is below the 'B' median of 5.6%.
On public finances, the general government budget deficit for fiscal year 2026, which ended in June, widened to 6.4% of GDP. Fitch attributed this deterioration primarily to a sharp rise in interest outlays. Public debt is projected to reach 56.1% of GDP in fiscal 2027, placing it above the current-year 'B' median of 54.7%.
Fitch also drew attention to the government's interest-to-revenue ratio, which rose by 6.4 percentage points year-on-year to 31.5% in fiscal 2026 - a level far above the 'B' median of 12.6%.
External balances are a further area of concern. Fitch expects Uganda's current account deficit to widen by 2 percentage points of GDP to 6.8% in 2026. The agency cited higher world energy prices, continued imports linked to oil sector development, an anticipated contraction in tourism receipts owing to incidences of Ebola, and disrupted remittance inflows caused by conflict in the Middle East as drivers of the wider deficit. The current account is forecast to narrow to 2% of GDP in 2028 as oil exports begin to contribute.
Foreign exchange reserve coverage is projected at 2.7 months of current external payments in 2026, down from 3.1 months in 2025. The 2025 level followed an increase of almost $2.7 billion that year, driven by foreign direct investment in the oil sector and record investment into Ugandan Treasuries.
Fitch's commentary also noted recent political developments: President Yoweri Museveni won a seventh consecutive term in the January 2026 general election, extending his rule to 2031.
This assessment leaves Uganda positioned between short-term fiscal pressures and medium-term growth potential tied to oil production, according to Fitch's projections and analysis.