The Uganda Business Climate Index

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How has the COVID-19 pandemic impacted Ugandan businesses? Results from a business climate survey

This special issue of the Uganda Business Climate Index examines the effect of the risk presented by COVID-19 pandemic on Uganda’s businesses. The report indicates that that small and medium businesses have experienced the largest effects of the risk associated with COVID-19 compared to large scale businesses. In addition, agriculture enterprises have been worst hit due to challenges of accessing inputs arising from transport restrictions and the ban on weekly markets, as well as due to the lost demand and the shift from consumption of fresh agricultural produce to dry rations.

Above normal rainfall dampens business climate environment; future outlook remains subdued

This Business Climate Index (BCI) shows slight improvement by four percentage points from 100.8 in the previous quarter (July-September 2019) to 104.9 in the current quarter (October-December 2019).

Recovery in the manufacturing sector improves the business climate; but future outlook remains downcast

The Business Climate Index (BCI) slightly improved from 100.3 in the previous quarter (April-June 2019) to 100.8 in the current quarter (July-September 2019). The slight improvement was largely driven by  improvement in business perceptions in the manufacturing sector.

Above potential performance in Agriculture and Service sectors improve business climate with a more optimistic future

This BCI shows that the positive effects of rainfall on business climate were bolstered by improved perceptions of sales turnover, increase in business activity, incoming new businesses, reduction in inputs cost, and general business optimism during the April to June 2019, quarter.

 Closure of the Rwanda-Uganda Border and the delay in seasonal rainfall affects the business climate

The Business Climate Index (BCI) declined by more than eleven basis points from 107.02 in the previous quarter (October-December 2018) to 95.61 in the current quarter (January-March 2019)

Recovery in Agriculture and Service sectors improve business climate, but future business outlook is less optimistic

The Business Climate Index (BCI) improved by more than eighteen basis points from 88.72 in the July-September 2018 quarter to 107.02 in the October-December 2018 quarter. Nonetheless, perceptions about future business for January – March 2019 indicated worsening business performance.

Agriculture Sector Performance Deteriorates Drastically, but Businesses Remain Optimistic about the Future

This quarter’s performance was mainly driven by changes in Uganda’s tax policy which came into effect on 1 July 2018. The Business Climate Index (BCI) declined by 1.68 points from 90.40 in the previous quarter (April – June 2018) to 88.72 in the current quarter (July – September 2018), remaining below potential.  

Agriculture sector performs above potential but business deteriorates owing to underperformance in the manufacturing and service sectors

The Business Climate Index (BCI) declined by more than six basis points from 96.53 in the previous quarter (January - March 2018) to 90.40 in the current quarter (April - June 2018). The below potential performance was largely driven by poor performance in the manufacturing and services sectors.

Agriculture sector performance sustained, but businesses are less optimistic about the future 

This Business Climate Index covers the January to March 2018 quarter.  It is computed based on the  level of business activity, turnover, profitability, incoming new business, capacity utilisation, average costs of inputs, price of produced goods among others. 

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