THE International Monetary Fundâ€™s latest report on Sub-Saharan Africa projects that Ugandaâ€™s economy is set to grow by 6.2% in 2007. This is lower than the sub-Saharan Africa average of 6.7%, which is skewed upwards by oil producing countries such as Angola and Nigeria.
However our high population growth has dampened per capita economic growth to 2.5%. Ugandaâ€™s per capita income for 2007 is projected to be $282 against the regional average of $624.
In addition Uganda more than halves sub-Saharaâ€™s 13% average inflation rate and our 6.2 months reserves of imports is higher than the 5.6 month regional average.
But Uganda underperforms the region in the critical areas of exports, domestic savings and revenue collections as a percentage of GDP.
Our stellar performance on macro-economic stability should be measured against whether or not it is moving us towards our stated aim of export led growth.
The export-led growth model presupposes that in developing countries local demand is low because of widespread poverty therefore the need to find markets abroad.
In the quest to satisfy international demand, production is then pushed up, jobs created and ideally local income levels rise.
No one doubts the importance of macro-economic stability as an incentive for investment and savings. But shouldnâ€™t macro-economic stability be a means to increased production, improved incomes and sustainable development?
So the mismatch between our world beating performance in maintaining macro-economic stability and our luke-warm results in increasing export receipts, domestic savings and local taxes should be scrutinised closely.
The economy remains afloat on the largesse of the donor community. A relationship which manifests itself in pockets of affluence among the urban elite in sharp contrast to the dehumanising rural poverty.
Macro economic stability should be a tool for raising our capacity to mobilize resources domestically, wean us off foreign aid and not to perpetuate donor dependency.
More economic growth for Uganda