Uganda economy to grow by 6.2% - IMF
UGANDA'S economy is expected to grow by 6.2% this year, up from last year’s 5.4%, according to projections of the International Monetary Fund (IMF). This is below the anticipated 6.7% for sub-Saharan Africa but is higher than the 5.2% average for the non-oil producing countries.
By Paul Busharizi
UGANDA'S economy is expected to grow by 6.2% this year, up from last year’s 5.4%, according to projections of the International Monetary Fund (IMF).
In its just released report, ‘The Regional Economic Outlook, Sub-Saharan Africa’, the IMF shows this is below the anticipated 6.7% for sub-Saharan Africa. However, the growth is higher than the 5.2% average for the non-oil producing countries.
Uganda scores better than the continent’s average in key areas such as inflation control, investment as percentage of GDP, and national hard currency reserves. The country, on the other hand, performs below average in areas like domestic savings, government revenues excluding grants, and exports as a percentage of GDP.
The country’s GDP is expected to grow to $282 per capita in 2007, slightly up from $275 in 2006. That is lower than the average for sub-Saharan Africa ($624). Compared to other countries in East Africa, Uganda’s GDP is lower than that of Kenya ($478 per capita) and Tanzania ($364) but higher than Rwanda ($271), Burundi ($112) and the DR Congo ($96). This makes Congolese and Burundians the poorest people in the world.
Asked for a reaction, economists were not surprised that Uganda performed well in macro-economic stability, reflected in low inflation and improved reserves. But they suggested that the economy is still on shaky grounds because of low export.
“Our export to GDP ratio tells us whether growth is rooted in economic fundamentals, whether we are producing or dependent on handouts,†said Lawrence Bategeka of the Economic Policy Research Centre.
He warned that over-emphasis on inflation control by restricting the money supply, as Uganda has been doing over the last 20 years, can stifle production.
Bategeka also suggested that institutions need to be strengthened to see stronger growth figures. “Institutions, the organisations and the formal and informal rules that support them are not yet strong enough to promote national savings, mobilise local revenues or boost exports.â€
UGANDA'S economy is expected to grow by 6.2% this year, up from last year’s 5.4%, according to projections of the International Monetary Fund (IMF).
In its just released report, ‘The Regional Economic Outlook, Sub-Saharan Africa’, the IMF shows this is below the anticipated 6.7% for sub-Saharan Africa. However, the growth is higher than the 5.2% average for the non-oil producing countries.
Uganda scores better than the continent’s average in key areas such as inflation control, investment as percentage of GDP, and national hard currency reserves. The country, on the other hand, performs below average in areas like domestic savings, government revenues excluding grants, and exports as a percentage of GDP.
The country’s GDP is expected to grow to $282 per capita in 2007, slightly up from $275 in 2006. That is lower than the average for sub-Saharan Africa ($624). Compared to other countries in East Africa, Uganda’s GDP is lower than that of Kenya ($478 per capita) and Tanzania ($364) but higher than Rwanda ($271), Burundi ($112) and the DR Congo ($96). This makes Congolese and Burundians the poorest people in the world.
Asked for a reaction, economists were not surprised that Uganda performed well in macro-economic stability, reflected in low inflation and improved reserves. But they suggested that the economy is still on shaky grounds because of low export.
“Our export to GDP ratio tells us whether growth is rooted in economic fundamentals, whether we are producing or dependent on handouts,†said Lawrence Bategeka of the Economic Policy Research Centre.
He warned that over-emphasis on inflation control by restricting the money supply, as Uganda has been doing over the last 20 years, can stifle production.
Bategeka also suggested that institutions need to be strengthened to see stronger growth figures. “Institutions, the organisations and the formal and informal rules that support them are not yet strong enough to promote national savings, mobilise local revenues or boost exports.â€