Uganda Economic Outlook
- Uganda’s economy continued to improve in 2015, despite external shocks, with real GDP growth projected to reach 5.1% in 2016, and 5.8% in 2017, driven by industry, services and public infrastructure investment.
- Uganda’s economic stance remains focused on containing inflationary pressures and on enabling growth by ensuring exchange rate stability and maximising domestic resources mobilisation.
- Uganda has made progress in reducing poverty and in enhancing gender equality and women’s empowerment.
Uganda’s economic outlook is positive, with real GDP growth expected to reach 5.1% in 2016, compared to 5.3% in 2015, and 4.7% for 2014. This assumes that the government will maintain macroeconomic stability and tackle corruption. Growth will mainly be driven by strong performances in the industry and services sectors, and also by public infrastructure investment and other investments in priority sectors. Large infrastructure projects will boost manufacturing, as well as services, notably tourism. Rising private consumption will also drive growth. Credit expansion, which increased by 16% in February 2015, more than double last year’s growth rate, will boost consumption, as will higher government consumption in the run-up to elections. Investment in the energy sector will also boost growth, although the pace of growth has slowed in the past year as oil prices have fallen sharply. The issue of new licences for further oil exploration in the greater Albertan region will boost much-needed foreign direct investment.
Uganda’s Human Development Index (HDI) improved slightly to 0.483 in 2014, from 0.478 in 2013. This still falls below the 0.502 average for the world’s least developed countries (LDCs), and the 0.518 average for sub-Saharan Africa. Moreover, earlier progress towards Millennium Development Goals (MDGs) for health and education has stalled, with outcomes underperforming the goals due to insufficient funding. Nonetheless, there has been significant progress in increasing access to anti-retroviral treatment, in preventing mother-to-child HIV transmission, and in reducing the prevalence of malaria, which fell from 43% in 2009 to 19% in 2014. Poverty fell in all regions except the Eastern region, where it increased between 2009/10 and 2012/13. Although the Northern region has witnessed a significant reduction in poverty – from 60.7% in 2005/06 to 43.7% in 2012/13 – this still remains more than twice the national average. Uganda has steadily improved its performance in gender equality and women’s empowerment. Nonetheless, women continue to face discrimination, particularly in their access to economic opportunities and ownership of assets.