UGANDA | MIDDLE | INCOME STATUS

KAMPALA - A meeting, meant to clarify Uganda’s position on attaining Middle Income Status was Monday (July 4) 'suspended' at the Uganda Bureau of Statistics (UBOS). 

UBOS invited journalists from various media houses to brief them on the outcome of a high-level meeting they had organized with stakeholders from the World Bank, Bank of Uganda, Ministry of Finance, planning and economic development as well as experts from the academia. 

This follows pronouncements made by President Yoweri Museveni during this year's state of the nation address where he declared that Uganda had reached middle-income status. 

This was however disputed by the World Bank on its own premise. 

It is against this background that UBOS organized a press briefing to give an expert analysis and clarity on this issue of strategic economic importance.  

However, during a brief interaction with the media, Dr Chris Mukiza, the executive director UBOS said some officials 'rushed' out of the meeting for other engagements on Parish Development Model. 

"This morning, we UBOS had a meeting with the World Bank country office, joined by the Ministry of Finance officials, Bank of Uganda officials and the academia, to discuss matters related to the report published by the World Bank for the end of the financial year 2022. 

The meeting has been cordial, and very insightful and we have agreed on many areas. Unfortunately the press statement is not yet ready and we promise you we shall share the statement when it is ready before the week ends," Mukiza said. 

"I know you were anxiously waiting to get the outcome of the meeting. I had thought it would end much earlier but because some stakeholders were rushing for other engagements on the Parish Development Model, we couldn't finish," Mukiza explained. 

He, however, reassured journalists that the press statement to be shared later in the week will clarify the difference in the GDP per capita Government of Uganda published and the Gross National Income per capita coming from the World Bank.

"Our statement will clarify the difference between the two and how the country can move forward in interpreting the two reports," he said. 

Background 

Over the past decade, Uganda set a number of targets to drive it into the coveted middle-income status but failed to hit the World Bank threshold, due to several local and global social-economic challenges.  

In the most recent past, for instance, the government put up a spirited fight against the locust invasion, the floating islands, the landslides, the terrorist bombs, the COVID-19 pandemic, and most recently, the rising commodity prices caused by the Ukrainian war.  

In spite of these and past challenges, President Museveni said Uganda’s economy had expanded, growing 19.3% ($25.4b) by the close of the current financial year, to hit $131.6b (sh493.105 trillion) by the Purchasing Power Parities (PPP) method.  

The PPPs measure the total amount of goods and services that a single unit of a country's currency can buy in another country.  

He said Gross Domestic Product (GDP) per capita, one of the parameters used to admit a country into the middle-income status, was recorded at $1046 (sh3.919m), $10 (sh37,470) above the World Bank threshold.  

Museveni, however, quickly noted that the country will have to sustain its current economic growth rate for at least two consecutive years, to be declared a middle-income country by the World Bank.  

What it means 

Uganda’s ascendance to the middle-income status will add to three, the number of East African Community (EAC) partner states currently rated as such. 

Kenya and Tanzania are the only other countries with lower-middle-income status, with the latter only achieving it recently.  

A country’s income status is determined by looking at its Gross National Income (GNI) per capita.  

GNI is the total amount of money earned by a nation's people and businesses. 

The GNI per capita is the dollar value of a country's final income in a year, divided by its population. It should be reflecting the average before-tax income of a country's citizens. 

According to the World Bank, the lower-middle-income status, which Uganda eyeing, is one with an income per capita of between $1,046 (sh3.919m) and $4,095 (sh54.34m), while the higher middle income lies between $4,096 (sh15.347m) and $12,695 (sh47.56m).  

In determining per capita income, the global banking prefect also considers factors such as economic growth, inflation, exchange rates, and population growth.  

To subsequently achieve the upper-middle-income, Uganda’s GNI per capita must reach between $4,046 (about sh14m) and $12,535 (about sh44m) 

Experts argue that the countries of the world are broadly grouped into four categories by the World Bank, including the low, lower-middle, upper-middle- and high-income countries.  

Ascension to the middle income thus increases a country’s eligibility for International Development Association (IDA) financing - the World Bank’s concessional lending arm.