He said the direct health costs of treatment, together with lost wealth as a result of reduced manpower, are the main reasons for the huge losses.
"We lose an estimated $702m to the Aids epidemic and another $348m to malaria," he told a five-day conference of Commonwealth health ministers from eastern, central and southern Africa.
"Comparing it with how much we earn from coffee, this loss is several times bigger," President Museveni said.
Uganda's gross domestic product is only about $6 billion a year.
Schools
Uganda has been badly hit by the Aids virus, but the government has been commended for its open public campaigns to combat the disease.
More than 900,000 people have perished from Aids-related illnesses since the disease was first diagnosed in Uganda in 1982.
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President Museveni: Costs are direct and indirect |
Fortnightly anti-Aids rallies are due to begin soon in schools across the country to target young people.
The Aids epidemic in Uganda has contributed to a reduction in the life expectancy of economically active Ugandans from 48 years in 1990 to 38 years by 1997.
The government has sought to coordinate Aids policy to reduce infection and fatality rates.
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