Uganda Says Private Credit Must Rise 17-Fold for a US$500 Billion Economy

Uganda’s government says its Tenfold Growth Strategy requires private-sector credit to rise to Shs490 trillion (about US$128 billion) by 2040. Capital-market financing would also have to grow from about Shs1.5 trillion (about US$390 million) today.

The target is part of a plan to expand the economy from about US$50 billion to US$500 billion by 2040. Finance Minister Henry Musasizi has urged capital markets to play a bigger role in mobilising long-term capital.

The Scale of Uganda’s Private Credit Gap

Uganda’s Tenfold Growth Strategy aims to expand the economy from about US$50 billion in the 2023/24 financial year to US$500 billion by 2040. The plan relies on industrialisation, value addition, export growth and higher productivity.

The Uganda Bankers Association’s ATMS strategy, cited by the Daily Monitor, sets out the credit requirement. Private-sector credit must rise from Shs28.6 trillion (about US$7.5 billion) in 2025 to Shs490 trillion (about US$128 billion) by 2040.

Capital-market financing would also have to rise from about Shs1.5 trillion (about US$390 million). Published targets range from Shs240 trillion (about US$63 billion) to Shs440 trillion (about US$115 billion).

Outstanding private-sector credit rose 3.8% from Shs26.715 trillion (about US$7 billion) in May 2026 to Shs27.737 trillion (about US$7.3 billion) in June 2026. That is according to New Vision.

Why the Central Bank Is Pushing Banks to Act

The Bank of Uganda has directed supervised financial institutions to submit board-approved strategies for expanding private-sector credit. The directive, reported by ChimpReports on 24 August 2026, requires plans showing how lenders will support a more than sixteen-fold increase in credit.

Loan approval rates have improved sharply this year, though from a low base. The approval rate was 39.2% in January 2026, 50.4% in April and 73.8% in May, according to Ministry of Finance monthly reports.

In May 2026, credit approved for extension to the private sector rose to Shs2,290.14 billion (about US$600 million). That was up from Shs2,053.62 billion (about US$538 million) in April.

Total loan applications in May were worth Shs3,104.63 billion (about US$813 million). The figures suggest credit supply is loosening, but the total stock of lending remains far below what the government says is needed.

Capital Markets and the Long-Term Funding Challenge

Finance Minister Henry Musasizi has urged Uganda’s capital markets to take a bigger role in mobilising long-term capital. Government spending and bank loans alone cannot deliver the US$500 billion goal, he said, according to a ministry update on 3 September 2026.

By August 2026, domestic market capitalisation stood at Shs24.28 trillion (about US$6.4 billion), and corporate bonds had raised about Shs290 billion (about US$76 million). Collective investment schemes held about Shs7.08 trillion (about US$1.9 billion) in assets.

The gap between today’s capital markets and those targets points to a much deeper role for bonds and equity. Closing it would require new instruments and a broader investor base.

Who Gains and Who Is Affected

Banks and institutional investors stand to gain if the credit expansion materialises. A larger loan book and deeper capital markets would create new fee and interest income.

Businesses in agriculture, minerals, tourism and industry would benefit from more available long-term funding. These are the sectors the Tenfold Growth Strategy identifies for expansion.

The risk falls on borrowers and lenders if credit grows faster than repayment capacity. A rapid expansion from a shallow base can create asset-quality problems if underwriting standards weaken.

What to Watch Next

The next test is whether the Bank of Uganda’s directive to banks produces concrete lending plans and measurable growth in the credit stock. Monthly data from the Ministry of Finance will show whether the approval-rate gains translate into a sustained rise in outstanding credit.

Investors should also watch the capital-market side, where the targets will require new instruments and a broader investor base. The government has not set a public date for the next milestone, but the 2040 horizon leaves little room for delay.

On 18 September 2026, the government urged commercial banks to lower lending rates to support the strategy. Bankers were also challenged to increase lending, mobilise long-term capital and adopt innovative financing models.

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