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The Uganda Shilling has emerged as Africa's best-performing currency, appreciating by 6.1% in the past year.
This impressive rise has placed it ahead of 23 other currencies across the continent, according to data tracked by Bloomberg.
The Ministry of Finance attributed the strength of the Shilling to several factors, including a higher inflow of dollars from portfolio investors, which outweighed the corporate demand for the US dollar.
In a report published in February 2025, the Ministry says this increased inflow of dollars has played a key role in stabilising the Shilling and contributing to its impressive performance.
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Power tariffs
One of the key developments linked to the Shilling's strong performance was this week’s reduction in power prices by an average of 14% for the quarter ending June 30, 2025.
The Electricity Regulatory Authority (ERA) cited the Shilling's 0.25% appreciation against the US dollarin February as one of the factors contributing to the tariff adjustments.
Dr. Sarah Wasagali Kanaabi, ERA's Board Chairperson, explained that the tariff changes were influenced by the positive currency trends, among other key considerations.
A stable currency like the Uganda Shilling plays a crucial role in boosting economic resilience, attracting foreign investment, and ensuring overall growth.
It helps to keep inflation under control, reduces exchange rate volatility, and serves as a cushion against economic shocks. This stability is vital for preserving purchasing power and maintaining economic confidence across the country.