Uganda became a United Nations Least Developed Country (LDC) in 1971 when the LDC category was established and since then, has enjoyed preferential treatment, primarily through duty-free market access for goods, preferential access for services, and tailored technical assistance and capacity building from developed and developing countries. These international support measures are rooted in the World Trade Organization agreements, designed to help these vulnerable economies integrate into the global trading system and increase their participation in world trade.
However, in March 2024, Uganda received a notification from the UN Committee for Development Policy that the country had fulfilled the criteria for graduation from the LDC category for the first time. Uganda together with Rwanda and Tanzania met the minimum two criteria for graduation which include the human assets and the economic and environmental vulnerability indices.
Following the notification for graduation, Uganda is currently undergoing two assessments by the United Nation, one is expected to cover the impact of graduation on trade preferences and resilience amidst global trade dynamics. The second assessment analyses Uganda vulnerability on economic, social and environmental aspects.
According to Ms. Lynette Bagonza, the Permanent Secretary in the Ministry of Trade, Industry and Cooperatives, during the three years of assessment, Uganda has to keep its development trajectory without backtracking on the required parameters for graduation.
As part of Uganda’s preparation for the transition and ultimate graduation, a National Workshop on Enhancing Trade Resilience in Preparation for Uganda’s Graduation from the Least Developed Country (LDC) category is being organized by the Ministry of Trade, Industry and Cooperatives, in partnership with the United Nations, and is scheduled to take place on 2-3 October 2025 at Four Points by Sheraton Kampala.
The workshop will bring together UN Dignitaries, Senior Government officials, Private-sector Leaders, Development Partners, Research and Civil-society actors to discuss practical strategies for strengthening Uganda’s trade competitiveness and economic resilience.
As an LDC, Uganda is enjoying benefits from preferential trade arrangements with major developed economies like the European who are offering duty free quota free market access for all products from LDCs, except arms and ammunition. In the first half of vision 2040, Uganda’s merchandise exports increased by nearly fivefold (463%) with a 36% increase in FY 2024/25. Currently, Uganda’s total exports are valued at USD $10.6b.
Beyond the EU, Ugandan enjoys benefit from countries such as China and India. These schemes allow preferential access to a variety of goods from developing countries, typically without quantitative restrictions.
“As an LDC, we have attracted trade financing under the Enhanced Integrated Framework (EIF) of the World Trade Organisation (WTO), we receive funding to improve on our productive capacities, trade infrastructures and institutional support. We also enjoy preferential rates for our subscription fees to international organisations, and logistical support to travel and attend technical meetings”, explained Bagonza
Uganda’s graduation from LDC to a Developing Country means the country will forego all these benefits. Uganda will also lose out on access to certain concessional financing and travel assistance, the lower contributions to UN budgets, WTO flexibilities for LDCs among other benefits.
However, according to Trade minister Francis Mwebesa, the graduation comes with quite a number of benefits; “For a country to graduate from LDC is a symbol of progress, national pride and international recognition. Graduation can change our investment climate and potential as a country and increase the foreign direct investment as a result of improved perception”, explained Mwebesa.
He added, the graduation comes with a momentum for policy reforms and stronger development planning to build the country’s resilience.
Mwebesa says, with Uganda becoming a Developing Country, the private sector will be able to attract partnerships with investors, access technology transfer and improve on their competitiveness in the global economy.
The upcoming National Workshop will discuss strategies on building Uganda’s trade resilience and competitiveness.
“Government has taken steps in enhancing the private sector competitiveness through the tenfold growth Strategy, prioritising value addition to agro-produce and manufactures products. In addition, resources are being allocated to the development of trade infrastructure among other interventions. We have a responsibility to prepare the Private sector for this transition. Trade resilience is key to ensuring that Uganda not only meets the graduation criteria but thrives in the post-graduation environment”, explained Lynette Bagonza
Collins Agaba from Private Sector Foundation Uganda says though they are excited about this development, their worry is on the preparedness of the private sector for the external shocks that are going to come with the graduation.
“The graduation is a good sign that our economy is growing. However, as private sector, we are going to lose out a lot on the benefits we have been enjoying while exporting to the developed countries. We urge our government to put emphasis on supporting the MSMEs through trade financing to cushion themselves from the shocks that will come with the changes”, explained Agaba
If Uganda meets the criteria during the second UN assessment of 2027, it will be granted a transitional period of five years before the actual graduation is confirmed.
