The World Bank’s new report on the Ugandan economy looks encouraging save the nuances the bank warned of.
According to the report, the Ugandan economy is expected to grow by 5.5% during the 2022/2023 Financial Year, up from 4.7% in the previous financial year.
The estimates were revealed in World Bank’s 20th edition of the Uganda Economic Update, which detailed Uganda's economy to bounce back from the Covid-19 pandemic.
The 20th edition of the Uganda Economic Update was released in Kampala on the 15th of December 2022.
The report also showed that the Ugandan economy is expected to grow as much as 6% in 2024, demonstrating the strength of the economy in a period of global economic turmoil.
During the pandemic, Uganda’s economy took a huge hit as the lockdown protocols cut down the growth of the economy by half in 2021.
The country’s economic recovery shot up in 2022, owing to a strong performance in the services and industrial sectors, progressing private consumption, and a boost in private investment.
The bank projects that in the coming years, the growth in the east African nation’s economy will be accelerated by infrastructure construction and heavy investment in oil production.
The World Bank’s report reads in parts, “accelerated growth may reduce the poverty rate slightly to 41.9 percent by 2024, though this will depend on how circumstances evolve.”
Commenting on the World Bank’s prediction, Ms Mukami Kariuki, the World Bank country manager, stated “now, to generate enough jobs for one of the fastest growing populations in the world, accelerate growth in incomes and lift its population out of poverty, the Ugandan economy will need to grow even more rapidly, sustainably, and broadly. Strengthening regional trade and international trade is one of the ways to go.”
However, the World bank warned of a few growth deterrent. For starters, the bank warned that if the Ebola outbreak in the country is not contained, it could drastically affect the country’s economy.
The report also warned of the resurgence of the Covid-19 pandemic. Asides health related issues, there is also the issue of incurring more external debts. This is currently not a problem for the Ugandan government, as it is still able to service its debts, however, now more than ever, Uganda must be careful not to exceed its current capacity.
“The government’s fiscal strategy should rationalize expenditures to create adequate space for priority spending while continuing to rebalance expenditures away from hard infrastructure and towards investment in human capital,’’ the report indicates.
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