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This policy note illustrates how the ongoing US-Israel war on Iran has affected the Ugandan economy. Since the war began, the clearest effects on Uganda show up at the fuel prices, but not yet in the other headline figures.
Diesel rose 10.2 percent and petrol 5.8 percent between February and April 2026, feeding straight into transport and food costs. Remittances from Saudi Arabia, the UAE, and Qatar fell by a combined USD 7 million, from USD 69 million to USD 62 million, between February and March.
And 63 percent of firms surveyed in the January- March 2026 Business Climate Index (BCI) report being hurt by the war, mainly through higher fuel, shipping, and freight costs. As such, businesses are already feeling the squeeze even though headline and core inflation sit near 3 percent and the central bank has held steady the bank rate.
The aggregate numbers so far look calm, but the pressure is real and building. If the conflict drags on, fuel prices, the exchange rate, and remittances are more likely to get worse.
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- Published Jun 13, 2026