The study examined the impact of water transport and economic development in Ggaba region of Makindye division, Kampala city. The study objectives were; (i) to find out the influence of water transport on employment level in Ggaba, (ii) to find out the impact of water transport on the productivity of economic activities in Ggaba, (ii) to identify the challenges facing water transport in promoting economic development in Ggaba and (iv) to find out the relationship between water transport and economic development. Quantitative methodological approach was used specifically the descriptive correlation research design. Self-administered questionnaires were distributed to a sample of 80 respondents who were retailers, fishermen, fishmongers and passengers of water transport by simple random sampling procedure. The findings of the study indicated that the degree of water transportation is high and the level of economic development is high. Water transportation was mainly determined by is reliability and efficiency. The findings further indicated that there is a significant positive correlation between water transport and economic development. The research concluded that water transport is a significant factor that promotes economic development. Therefore the government should focus on how to improve on water transport services by encouraging more foreign investors in water transport, directing more support in terms of funds towards the development of water transport and also monitoring funds that have been directed to water transport.