Uganda earned $1.86 billion from tourism last year and drew $3.2 billion in foreign direct investment. Both figures are now in question.
On May 17, 2026, the US State Department placed the country under a Level 4 “Do Not Travel” advisory – its highest restriction tier, shared with Afghanistan and Somalia – citing crime, health, terrorism, and civil unrest.
The fallout is showing up across four channels: a direct hit to tourism bookings, pressure on the shilling and foreign reserves, a chill on new foreign investment, and a budget redirected toward emergency response.
Early data complicates parts of that picture – offshore portfolio inflows have actually risen since the advisory took effect – but the sectors most exposed to American travel and capital are already reporting losses.
Washington pointed to a mix of factors behind the decision. Chief among them is the Ebola outbreak, which prompted the World Health Organisation to declare a public health emergency of international concern. Uganda this year recorded a total of 20 Ebola cases, 15 of them imported from the DRC.
On July 28, after 42 days without recording a new case, the country was declared Ebola-free. US officials also cited a rising threat of violent crime – armed robbery, home invasions, and sexual assault – putting American travellers at elevated risk.
The advisory further flags the danger of terrorist violence targeting religious venues, schools, and tourist areas, and warns of possible civil unrest erupting around political events, with little notice.
The decision has been received with widespread contention in Kampala. A US travel advisory can carry weight beyond its immediate effect on American travellers, because multinational companies, insurers, and other governments also monitor US risk assessments.
Uganda has previously been placed on a Level 4 advisory for purely health reasons, but this is the first time it has landed there over both health and security concerns. Never mind that some of the terrorism concerns were later found to have been stage-managed by UPDF intelligence chiefs seeking budgetary approvals; Maj Gen James Birungi is currently facing charges on offences relating to security and treachery.
TOURISM AND HOSPITALITY
This is the fastest and most visible channel, given how heavily these sectors depend on inbound travel.
A “Do Not Travel” advisory triggers cancellations from foreign tour operators and reduced airline loads on inbound routes, putting the $1.86 billion in tourism revenue the Ministry of Finance recorded in 2025, at risk. Tour operator Eric Kalere Jali of Lakewood Safaris, said the effect was immediate.
“Within days of the advisory, we saw cancellations and postponements pour in, and by the end of May, new bookings had sharply declined. Some of that business did not just disappear; it moved,” Jali said.
“Some clients who cancelled Uganda trips chose to redirect their travel to competing East African destinations, particularly Kenya, Tanzania and Rwanda. Uganda was not just losing bookings; it was losing business to destinations travellers perceived as lower risk.”
Jali said several tourism companies put their operations on hold and laid off staff, while others sold off assets to service bank loans.
Dr Emmanuel Erem, a Research Fellow at the Economic Policy Research Centre (EPRC), frames the exposure more precisely: the advisory’s biggest economic effect won’t be a collapse in total visitor numbers, but the loss of high-value American spending, since US travellers typically buy safaris, gorilla permits, and premium accommodation.
He expects the real hit to arrivals and revenue to show up between August and December as existing bookings expire, with job losses and business closures possible if the Level 4 status holds for six to twelve months.
FOREIGN DIRECT INVESTMENT
In the FY 2026/27 budget speech, Finance Minister Henry Musasizi reported FDI at $3.2 billion for the twelve months ending March 2026. That figure is now at risk: investors price political risk into capital decisions, and advisory levels shape how much multinationals are willing to commit.
A “Do Not Travel” warning can freeze new capital commitments and expansion plans, particularly in expatriate-heavy sectors like mining and oil and gas. Contracts, joint ventures, and supply agreements often contain risk-review clauses triggered by formal government advisories.
US and other Western firms will be reluctant to send negotiating teams and technical staff to close deals in person during a Level 4 period.
FOREIGN EXCHANGE RESERVES
Falling tourism receipts and FDI – both key sources of foreign currency – would squeeze the Bank of Uganda’s reserves. The IMF had projected reserves at $6 billion for 2025/26, covering 2.7 months of imports, with a slight increase forecast for this financial year.
Less foreign currency entering the country would pressure the shilling to depreciate, feeding imported inflation and weakening the buffer against external shocks, which could in turn affect credit ratings, borrowing costs, and public debt.
Kenneth Egesa, Director of Communications and Public Relations at the Bank of Uganda, said net assets held by offshore investors in Uganda’s banking sector rose 5 percent since the first quarter of 2026, with inflows surging in July and August.
He noted no significant change in holdings of government securities in Quarter One, though investors can shift between assets – government securities, deposits, swaps – depending on market conditions and objectives.
The distinction matters: portfolio investors hold financial securities that can be sold quickly, while FDI is a longterm commitment to physical assets like buildings and equipment. A rise in one does not offset a decline in the other.
CROSS-BORDER TRADE
Neighbouring countries’ businesses and logistics firms will factor the advisory into their own risk assessments when routing goods through Uganda. During the earlier Ebola outbreak, restricted crossings at the Uganda – DRC border slowed trade along corridors affected by the virus, particularly with the DRC and South Sudan.
A REACTIVE BUDGET
The government has had to respond to the conditions driving the advisory – health, crime, terrorism, and unrest. Because these are emergency conditions, funds have been redirected from planned development budget lines, such as infrastructure, education, and agriculture, toward emergency health response, security deployments, and public order operations.
The impact extends to donor-funded programmes too, as development partners may pause disbursements or staffing and redirect funding toward the emergency, further squeezing resources meant for the original development agenda.
It is not yet clear how much of Uganda’s own development budget has been redirected internally – the government has not released a breakdown – but regional donor funding is already shifting: the African Development Bank approved $13 million in emergency-response grants in July for countries including Uganda.
The net effect is a budget that becomes reactive rather than developmental, with costs that outlast the crisis itself.
THE STATE DEPARTMENT’S RESPONSE
Asked whether Washington had introduced new trade or investment programmes since the advisory, and whether bilateral engagement would stay the same, the State Department maintained that the advisory has not altered the underlying USA-Uganda relationship.
It called the 60-year partnership “unchanged” and pointed to continued cooperation on regional security, trade, and public health, including US funding for the Ebola response in the DRC.
On the advisory itself, the spokesperson said: “We routinely update our Travel Advisories and destination information pages for all countries based on a comprehensive review of all available safety information and ongoing developments.”
WHAT TO WATCH
Erem estimates that even after a possible downgrade, recovery could take another three to nine months as operators and insurers rebuild confidence. For now, the sectors most exposed to American money – safari tourism, hospitality, expatriate-heavy investment – are absorbing the loss in real time, while the rest of the economy waits on a single variable: how long Uganda stays at Level 4.
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