Ugandans are investing in less productive areas, says IMF

Prime Minister Ruhakana Rugunda

The International Monetary Fund (IMF) has said a significant number of Ugandans are investing in less productive areas.

The IMF conclusion is based on the analysis of the investment priorities of Ugandans between 2008 and 2015.

The IMF analysed the information supplied by Uganda Bureau of Statistics regarding the investment choices of Ugandans over the last nine years.

The analysis shows that over the last nine years Ugandans have increasingly invested in buildings, but IMF said real estate is one of the less productive areas. It shows that investment in real estate has been expanding from over 50% in 2008 t0 about 70% in 2015.

A big number of the people, according to IMF, are also investing in "equipment" and other less productive areas. The IMF shared the findings at the high-level economic growth forum at Common Wealth Resort, Munyonyo, Kampala, yesterday.

During a session chaired by finance minister, Matia Kasaija, Dr Albert Musisi, the commissioner for microeconomic policy in the (finance) ministry said several factors, including negative external shocks such as global economic crisis, foreign exchange instabilities and climate change, are partly responsible for the fall in the average real GDP growth from 7.3% in 1999 to 4.4% in 2016.

However, President Yoweri Museveni, in a speech delivered by the Prime Minister, Ruhakana Rugunda, noted that the economy has become "more sophisticated compared to what it was in 1986".

"We have made significant progress on all fronts. We had almost no international reserves in 1986 which now stands at $3b. In 1992, 56% of the Ugandan population was below the poverty line. Poverty reduced to 19.7% in 2015," he stated.

Despite improvements in health and power access, which will be increased significantly from the current 20.4% when Isimba and Karuma come on stream in about two years' time, the President said the economy still faces some challenges, including inadequate infrastructure, low value-addition, low labour productivity, unstable export markets and low implementation of government programmes.