Uganda's yearly income from coffee sales nearly doubles in a given year
Uganda has cemented its position as Africa's leading coffee exporter in 2024, with a record-breaking earnings of US$2.2 billion. This impressive achievement is the result of a combination of increased coffee production, higher global prices, expanded market access, and favourable economic conditions.
The significant increase in coffee export volumes is a key factor. Uganda exported 7.7 million bags (462,000 tonnes) of coffee in the 2024/25 season, a 25% rise from the previous year. This surge is primarily due to a bountiful harvest in major coffee-growing regions like Greater Masaka and South Western Uganda.
The strong price gains for both main coffee types, Robusta and Arabica, have boosted revenue. Robusta coffee prices rose by 33%, while Arabica prices almost doubled, contributing significantly to Uganda's earnings. It's worth noting that Uganda produces about 85% Robusta and 15% Arabica, allowing it to capitalise on robust demand for both varieties.
Uganda's success in the global coffee market is also marked by its expanding export markets, especially in Asia and Europe. Europe remains the largest market, accounting for 69% of exports, with Italy and Germany prominent players. Meanwhile, exports to China surged dramatically, making it Uganda’s second-largest coffee market in Asia and sixth globally.
The favourable macroeconomic environment in Uganda has also supported the sector’s growth. The stronger Ugandan shilling, increased investor confidence, and improvements in trade balance and credit access have contributed to the sector's growth.
External factors have also played a role in Uganda's coffee export success. Supply disruptions and climate challenges in other major coffee producers like Brazil and Vietnam have raised global prices, aiding Uganda’s earnings.
David Ortega, a professor of food economics and policy at Michigan State University, attributes Uganda's coffee success to long-term investments in replanting, farmer training, and value-chain development. These strategic moves have positioned Uganda as a reliable and competitive player in the global coffee market.
In 2017, Kampala launched a major coffee investment project, further bolstering the country's coffee industry. The initial capital for the investment bank, which will reduce the countries' reliance on foreign donors for financing development projects, will come from a "set of taxes imposed in each state," amounting to around 5% of their tax revenues.
As Uganda continues to thrive in the global coffee market, it serves as a shining example of how strategic investments and favourable economic conditions can drive success in the agricultural sector.
Investments in the coffee industry, such as the 2017 Kampala-launched coffee investment project, have facilitated Uganda's advancement in the global coffee market. The initial capital for this investment bank, derived from a 5% tax levy, will provide an alternative to foreign donor financing for development projects. Additionally, the financial sector may benefit from increasing real-estate demand due to the surge in coffee earnings, which could stimulate business growth and expanding opportunities for investing in Uganda's thriving agricultural sector.
