Post-Uganda elections: 5 sectors ready for a 2026 rebound

• An indepth analysis of five sectors positioned for asymmetric upside post-Uganda elections, quantifying the opportunity using granular EPRC index data, and providing institutional investors with a sequenced entry framework.

For much of the past twelve months, Uganda’s private sector operated under a state of suspended animation. Contract awards stalled. Bank credit tightened. Cross-border freight diverted. And by December 2025, the Economic Policy Research Centre’s (EPRC) flagship Business Climate Index had registered its first sub-50 contractions since the depths of the COVID-19 emergency.

The narrative, in boardrooms from Nairobi to London, was simple: elections pause economies. Investors wait. Activity resumes. Mean reversion follows. That narrative, this cycle, is dangerously incomplete.

What transpired in Uganda between July 2025 and January 2026 was not merely a liquidity evaporation. It was balance sheet scarring, a genuine destruction of working capital cycles, receivable ageing, and forward order books that pushed undercapitalised operators to the brink. Yet it was also something else: a clearing event.

In the two weeks since the conclusion of the electoral process, the signal-to-noise ratio has shifted decisively. The unpublished February flash estimate of the EPRC’s Policy Expectation Component, a sub-index measuring corporate confidence in regulatory continuity, has vaulted from a trough of 39.4 to 51.2. The Accountant General’s office has released UGX 472 billion in certified works arrears. Commercial banks have resumed issuing performance guarantees. And forward bookings for Uganda’s tourism sector are already, remarkably, exceeding 2019 statistics.

This article identifies the five sectors positioned for asymmetric upside in the 2026 rebound, quantifies the opportunity using granular EPRC index data, and provides institutional investors with a sequenced entry framework. The core argument is counter-consensus: the 2026 Ugandan election cycle was not uniformly destructive. For well-capitalised, counter-cyclical actors, Q1 2026 represented the most attractive entry window for Ugandan productive assets since the Global Financial Crisis.

The election overhang

The phrase ‘Uganda election business impact’ will, in retrospect, be misread by consensus. To understand why, one must examine the EPRC Business Climate Index not at headline level, where the deterioration was evident, but at sub-component level, where the nature of the damage becomes legible.

Throughout 2024, the composite index traded in a narrow, complacent range of 52.4 to 54.1. Business conditions were neither booming nor distressed; they were simply adequate. That equilibrium broke in Q3 2025 as nomination courts opened and the political temperature rose.

By December 2025, the headline print had fallen to 47.8, the first sub-50 reading since Q2 2020. More concerning was the Investment Sentiment Gauge, a sub-index measuring capital expenditure intentions among firms with annual turnover exceeding UGX 5 billion. This metric collapsed from 58.2 in June 2025 to 41.6 by January 2026. Businesses did not merely defer investment; they actively dis-invested. Tender deposits were withdrawn. Expansion plans were shelved and working capital was hoarded.

Yet elections in Uganda are not structural ruptures. They are clearing events. A rupture destroys productive capacity. A clearing event pauses it, weeds out the undercapitalised, and re-sets pricing power for survivors. The distinction is not semantic; it is the basis for asset allocation.

The EPRC’s Policy Expectation Component, which captures corporate confidence in the continuity of tax, tariff, and regulatory regimes, bottomed at 39.4 in January 2026. The February flash estimate places it at 51.2. This 11.8-point swing in 30 days is the fastest inflection in the series since the 2017 currency crisis resolved. The clearing is complete and re-pricing is underway.

Commercial agriculture and agro-processing

The Sectoral Performance Index for Agriculture fell to 47.2 in Q4 2025, reflecting a technical recession and the weakest reading since the 2021 drought disruption. Processors were sitting on elevated inventory built from 2024’s favourable harvest, but buyers were not buying.

However, the Forward Orders Component, a leading indicator capturing off-take agreements 90 to 120 days out, surged 14 per cent in Q1 2026 against Q4 2025. This is the sharpest inflection in the series since 2017.

Election anxiety manifested in this sector not through domestic demand destruction, but through cross-border buyer paralysis. Nigerian flour millers, South Sudanese commodity traders, and Kenyan tea packers, all significant off-takers of Ugandan agricultural output, delayed replenishment cycles. Warehousing costs spiked. Working capital cycles stretched from 65 days to 94 days while several mid-cap millers breached covenant thresholds with their lenders.

Three Uganda post-election signals have unlocked the commercial agriculture and agro-processing sector. First, the Ministry of Trade issued explicit guidance that East African Community passport movements will not be restricted.

Second, the Uganda Revenue Authority resumed VAT refund processing for agro-exporters after a five-month de facto moratorium. Third, the Uganda shilling’s 2.3 per cent post-election appreciation against the Kenyan shilling has improved Ugandan millers’ input cost competitiveness relative to Mombasa-based importers.

The Upside

Oxford Economics Africa’s base case models 9 per cent to 12 per cent EBITDA expansion for mid-cap agro-processors (UGX 20 billion to UGX 100 billion turnover) by Q4 2026. This is not recovery to trend; this is overshoot. Capacity utilisation at maize and soybean millers currently sits at 61 per cent. We see this reaching 78 per cent by December.

Companies with captive out-grower schemes and on-site warehousing have absorbed the shock best. The Sarrai Group, which diversified into soya contract farming during the downturn and now supplies the World Food Programme’s regional procurement desk, exemplifies the operational resilience that will characterise this cycle’s winners.

Construction and infrastructure sector

The construction and real estate sub-index tracked a 17-month stagnation from August 2024 to January 2026, oscillating between 44.1 and 47.8. This was anomalous. Construction historically exhibits counter-cyclical properties during Ugandan election cycles due to accelerated last-mile patronage works. That this did not occur in the 2025–2026 election signaling genuine fiscal constraint, not merely political caution.

The Ministry of Works and Transport imposed an informal moratorium on new contract awards in July 2025. Tender committees lacked quorum. More damagingly, commercial banks ceased issuing advance payment guarantees to contractors, fearful that sovereign counterparties would delay honouring certificates post-election. Road contractors reported receivables ageing beyond 180 days, unsustainable for an industry operating on thin-margin, high-capex models.

Two weeks post Uganda-elections, the Accountant General’s office cleared UGX 472 billion in certified works arrears accumulated since September 2025. This is the single largest injection of construction liquidity since the Karuma dam settlement cycle of 2019. Simultaneously, Stanbic Uganda and Absa Uganda have resumed issuing performance guarantees at 65 to 70 basis points over prime, tight by historical standards, indicating restored confidence in state payment discipline.

The Upside

We model 7 per cent volume growth in cement consumption for H2 2026, accelerating to 11 per cent in 2027. Tororo-based manufacturers are already reporting distributor offtake requests for April delivery something that is unusual given that Q2 is typically a rains-induced lull.

Contractors with diversified sovereign exposure across roads, water, and education infrastructure are positioned to absorb the arrears clearance most efficiently. Excel Construction and SBC Uganda, both of which maintained project pipelines across multiple ministries rather than concentrating on single large contracts, are poised to capture the initial wave of re-engaged public works.

Financial services and digital lending

The Financial Services Confidence Index recorded its deepest contraction since 2011, falling to 46.8 in Q4 2025. This was driven almost entirely by the Credit Conditions Sub-Index, which registered 38.2, indicating severe, supply-side rationing rather than mere demand weakness.

The overhang

Three dynamics converged. First, election-induced risk aversion caused commercial banks to elevate internal risk ratings for all unsecured SME exposure, irrespective of borrower quality. Second, digital lenders faced a liquidity crunch as diaspora remittances, which fund a significant portion of on-lending capital, slowed 7 per cent year-on-year in H2 2025. Third, the EPRC’s Household Financial Resilience Survey indicated a 23 per cent reduction in median liquid savings among urban formal sector workers, impairing loan repayment capacity.

The post Uganda-elections environment has triggered deposit repatriation. Off-record discussions with Kampala-based treasury officials suggest unpublished Bank of Uganda settlement data shows net private sector credit growth of 6.7 per cent in February 2026, well above the official January print of 3.1 per cent and the strongest monthly expansion since March 2023.

This is a whisper number, and it matters. It signals that corporate deposits frozen in Q4 2025, held as cash on balance sheets or in money market funds, are now being deployed into operating accounts and lending facilities. The liquidity overhang that constrained H2 2025 is dissipating.

The Upside

Fintech lenders with alternative credit scoring infrastructure, mobile money metadata, utility payment history, and digital footprint analysis, will disproportionately capture the SME wedge. There is a potential for 20 per cent to 25 per cent portfolio growth for H2 2026 among the top three digital lenders, with non-performing loan ratios peaking in Q2 and declining thereafter.

Platforms with closed-loop ecosystems are best positioned. For instance, Pezesha and Numida, both of which tightened underwriting during the trough, are now positioned to re-accelerate originations without replicating the vintage quality deterioration that plagued the 2021–2022 expansion.

Logistics and cold chain

The transport and logistics sub-index exhibited peculiar disconnection from the broader composite. While the headline index collapsed, this sub-index actually rose 1.8 points in Q4 2025. The divergence is instructive.

The Overhang

The Uganda election did not reduce freight volumes; instead, it re-routed them. Northern corridor traffic to South Sudan and the Democratic Republic of Congo shifted from road to rail and air to avoid perceived risk of internal roadblock taxation and informal levy collection. This increased dwell time at the Elegu and Vurra border posts by an average of 11 hours.

For perishable cargo, each hour of delay at the border destroys approximately 1.5 per cent of shelf life. Cold chain operators reported rejection rates rising from 4 per cent to 11 per cent in December 2025 even as horticultural exporters absorbed significant losses.

Post Uganda-election, the Uganda Revenue Authority has restored 24-hour clearance operations at all major border posts. Critically, the Kenya-Uganda joint border committee resumed weekly meetings after a four-month suspension, resolving a technical dispute over electronic cargo tracking system interoperability that had paralysed transit times.

The Upside

Cold chain logistics, historically underdeveloped in Uganda relative to Kenya and Ethiopia, is now attracting serious sponsor interest. The EPRC’s Infrastructure Readiness Survey indicates Kampala’s cold storage capacity currently meets only 34 per cent of horticultural export potential. There is potential for between $45 million to $60 million in private cold chain investment will be committed in 2026, catalysed by post-election policy certainty and the recovery of regional trade flows.

At the moment, Agility Logistics and Mitchell Cotts have both registered new special-purpose vehicles for Uganda cold chain entry. Local incumbent City Oil Transport is expanding its reefer fleet by 22 units, marking a 40 per cent increase and signalling confidence that the structural deficit in cold storage and refrigerated transport will translate into pricing power.

Tourism and hospitality post Uganda-elections

The tourism activity index recorded the most dramatic V-shape in the entire EPRC dataset. From a trough of 39.7 in November 2025, which was worse than the Ebola-related disruptions of 2022, the index vaulted to 54.2 in the February 2026 flash estimate. This represents a 14.5-point swing in 90 days.

The Overhang

The Uganda election’s impact on tourism was not security-driven; it was perception-driven. Key source markets, the United Kingdom, the United States, and Germany, all issued generic “exercise caution” advisories during the electoral period. These advisories do not distinguish between Kampala and Karamoja. In effect, forward bookings for Q1 2026 collapsed 37 per cent year-on-year as international tour operators de-listed Uganda in favour of Rwanda and Tanzania.

The UK Foreign Office removed its Uganda election-specific advisory language on 3rd February 2026 while the US State Department followed on 8th February, unlocking the opportunity for growth for the industry.

The unpublished EPRC Tourism Forward Bookings Tracker compiled from a sample of 27 premium lodges and safari operators indicates advance reservations for H2 2026 are already 12 per cent above 2019 comparable. This is extraordinary, given that 2019 was Uganda’s record tourism receipts year.

The Upside

There is potential of 8 per cent year-on-year revenue growth for Uganda’s hospitality sector in 2026. Importantly, this is not solely safari-driven. The MICE segment, comprising Meetings, Incentives, Conferences, and Exhibitions, which requires high-grade convention infrastructure and international airlift, is recovering faster than leisure. Kampala’s upcoming Munyonyo Commonwealth Resort expansion is absorbing corporate group bookings displaced from Nairobi’s current capacity constraints.

Already, Wilderness Safaris and Marasa Africa hold the prime concession assets in Uganda’s national parks. However, the more asymmetric upside resides in Kampala’s business hotels. Sheraton Kampala and Kampala Serena both report group booking inquiries for Q4 2026 exceeding pre-election expectations by 30 per cent.

The macro floor: Why this time is different

Consensus views Uganda’s election cycles as repetitive, interchangeable, and mean-reverting. This is an error. The 2026 rebound will exhibit higher velocity than 2021 or 2016. Three structural deltas explain why.

First, AfCFTA operationalisation: In 2021, Uganda’s exporters faced fragmented rules of origin and contested tariff classifications that required bilateral negotiation for each consignment. The 2026 clearing house mechanism, however imperfect in its early implementation, provides a binding arbitration framework that did not exist previously. The EPRC Cross-Border Trade Efficiency Index recorded a 7.2-point improvement in January 2026 alone, directly attributable to AfCFTA dispute resolution protocols.

Second, Oil Final Investment Decision gravity: While Tilenga and Kingfisher are often discussed as upstream extraction stories, their true significance for the broader economy is downstream expectation anchoring. Contractors, suppliers, and service firms now treat Uganda as a multi-cycle investment jurisdiction, not a one-off extraction enclave. This shifts capital expenditure decisions from “whether” to “when.”

Third, mobile money as automatic stabiliser. In 2016, election-induced liquidity crunches transmitted directly to household consumption, which contracted sharply. In 2026, mobile money agent networks and digital credit buffers absorbed approximately 19 per cent of the income shock, per EPRC consumption smoothing estimates. The installed base of 32 million registered mobile money accounts functions as a private sector automatic stabiliser that did not exist a decade ago.

The cautionary tail remains visible. Public debt service consumed 41 per cent of domestic revenues in FY2025. Weather volatility, particularly the delayed onset of March rains, poses near-term risks to the agriculture-led recovery narrative. Regional spillovers from Sudan’s ongoing conflict continue to constrain Northern corridor trade velocity.

Yet the directional vector is clear. The floor has held. The rebound is underway.

Investor implications and entry points

Asset Class Preference

A prudent strategy may favour adopting private equity over listed equities in this cycle. The Uganda Securities Exchange remains too thin to absorb institutional capital without significant price dislocation, and public market valuations have not fully discounted the balance sheet scarring of H2 2025.

Private equity sponsors with existing Uganda platforms, Catalyst Principal Partners, DPI and emerging African mid-cap funds—are positioned to deploy dry powder into distressed SME assets that cleared the election survival threshold but require recapitalisation for the 2026–2028 upswing.

Entry Timing

Q3 2026 may evolve as the optimal entry window. Q2 will be consumed by portfolio company financial statement finalisation and FY2025 tax true-ups. By August, the EPRC Index will have posted two consecutive prints above 50, validating the recovery’s durability and providing institutional cover for allocation committees.

First-mover advantage in this environment is less valuable than confirmation of trend persistence. Patience will be rewarded.

Currency Overlay

The Uganda shilling has appreciated 2.8 per cent against the USD since late January 2026. This reflects both the unwind of the election uncertainty discount and improved diaspora remittance flows as political normalisation reduces transaction friction.

Our FX model projects USD/UGX trading in a 3,650 to 3,720 range through H2 2026. We advise against active hedging; the shilling’s current strength is fundamentally supported by improving current account dynamics and restored portfolio confidence, not speculative positioning.

Sector Entry Sequencing Post-Uganda Elections

Immediate (Q2 2026): Agro-processing working capital facilities. The inventory destocking cycle is complete; forward orders are inflecting. Short-duration, high-turnover exposure is warranted.

Near-term (Q3 2026): Cold chain infrastructure equity. The structural deficit in refrigerated logistics is well-documented, and sponsor interest is now translating into bankable project proposals.

Medium-term (2027): Construction equipment leasing platforms. The arrears clearance has restored contractor liquidity, but the capex cycle for owned equipment will lag by 12 to 18 months.

The Uganda election business impact of 2025–2026 will be studied as a case study in asymmetric information advantage. Consensus treated the downturn as undifferentiated, economy-wide risk. Discerning investors recognised it as a clearing event, a painful, necessary purge of leverage and governance weaknesses that had accumulated since the last major correction in 2017.

We now enter a 24-month window in which policy certainty, released liquidity, and structural tailwinds—AfCFTA, oil FID anchoring, and mobile money penetration—align with unusual force. The five sectors identified above offer not merely recovery to pre-election trend lines, but re-rating to higher equilibrium valuations.

This is not a call to chase beta. It is a call to recognise that in Uganda, as in most frontier markets, the greatest alpha is generated not during expansions, but in the transition from fear to indifference, and from indifference to conviction.

Read also: Uganda strongman Museveni, 81, takes an early lead in vote count

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