Economic experts have revealed that amid uncertainties posed by reduced capital flows, rising global interest rates, global protectionism, geopolitical tensions, and long-term risks associated with climate change, Uganda’s economy is growing driven mainly by the increase in the popularity of locally made products which has in return increased investment into the manufacturing sub-sector.
According to experts, this growth has also been significantly supported by “interventions that have increased government expenditure on social services and business recovery, thereby boosting investment and demand for locally produced goods”.
On the sidelines of the 2 day high-level Economic Forum taking place from 29th to 30th August 2024 In Kampala, the Minister of State for Finance, Planning and Economic Development in charge of General Duties, Hon. Henry Ariganyira Musasizi, in an interview told this website that for Uganda to seize opportunities for structural transformation, increase productivity and resilience, there is a need to fast track on key priorities on sustaining productivity in the economy.
“The government has retaliated the urgent need to fast track key priorities on sustaining productivity in the economy in a bid to grow the GDP from 500 billion from the current 50 billion shillings”.
He said that the economic forum said that despite economic uncertainties posed by various factors, Uganda’s growth is steadily increasing driven by infrastructure development, investment in human capital development, deliberate government programs for agriculture, and agro-industrialization such as the Parish Development Model (PDM) and a conducive macroeconomic environment among others.
The economic forum is running under the theme: "Seizing opportunities for structural transformation to increase productivity and resilience".
The Permanent Secretary/Secretary to the Treasury, Mr. Ramathan Ggobi while addressing the media after the opening of the forum, emphasized that, “Despite facing global challenges such as tighter financial conditions and supply chain disruptions, Uganda's economy demonstrated impressive resilience by achieving a growth rate of 6.0% in FY 2023/24".
The Permanent Secretary also said, the achieved economic performance has significantly surpassed the Sub-Saharan Africa average of 3.8% projected for 2024 and the global average of 3.2%.
He added that on the external front, Uganda has continued to attract more foreign investment and remittances with a total foreign direct investment increase of up to US $ 3.01 billion as at end April 2024.
“Increased foreign investment was observed in the oil and gas sector and this has spurred economic activity, especially in infrastructure and services. Similarly, remittances rose to US $1.43 billion in 2023 from US $ 1.25 billion in 2022” he said.
When asked about agricultural exports, he said “Exports of agricultural products have significantly increased in recent years. Coffee, in which the government has invested over time, has seen its earnings rise from US $ 845.40 million in FY 2022/23 to a record US $1143.8 million in FY 2023/24” he said.
Ms. Jane Nalunga The Executive Director of the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda Chapter, in a separate interview said that Uganda's exports especially Coffee has faced a challenge of global standards that require coffee exporters to proof sustainability standards that include climate change aspects.
“European Union market regulations require proof that Ugandan coffee is not contributing to deforestation. This poses a significant challenge, given the need to align with sustainability standards while ensuring coffee industry growth.
The obligation to show compliance with human rights and environmental directives places additional pressure on Uganda’s coffee sector.
Addressing these challenges is critical for maintaining market access and industry credibility” she told this website.
In the latest Strategy accessed from the Ministry of Finance, Planning and Economic Development, Experts have outlined priorities to grow Uganda's economy from USD 50 billion to USD 500 billion by 2040, targeting four key sectors of agro-industrialization, tourism, mineral development (including oil and gas), and science, technology, and innovation (STI), including ICT commonly known as (ATMIS).
The plan according to the ministry aims to double GDP every 5 years, raise per capita GDP from USD 1,146 to USD 7,000 by FY 2039/40, increase savings from 20% to 40% of GDP by 2040, raise the share of exports in GDP from 12% to 50% and increase annual FDI inflows from USD 2.9 billion in 2022 to USD 50 billion by 2040.
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