Harvard experts predict Uganda economic growth

Jul 13, 2015

INDIA and Uganda are poised to lead global growth in the next decade as new economic projections indicate the ascendency of countries on the Indian Ocean rim and East Africa

By Moses Walubiri

 

INDIA and Uganda are poised to lead global growth in the next decade as new economic projections indicate the ascendency of countries on the Indian Ocean rim and East Africa.

 

With average annual growth projections of 7.9% and 7.0% for India and Uganda, respectively, the latest report by the Centre for International Development (CID) at Harvard University indicates relative stagnation for Europe and the US, while China’s growth will start to peter out. 

 

CID’s projections are based on the newly released 2015 global trade data and The Atlas of Economic Complexity, an online tool which measures a country’s productive knowledge and predicts its rate of growth.

 

According to the Financial Times’ John Authers, a senior columnist, “CID has a successful record of identifying which countries are positioned to grow. Based on the latest global trade data for 2015, they aim to identify the drivers of why some countries grow, while others do not.”

 

Authers published an article about the predictions in the Financial Times.

 

With the exception of India and Philippines, all the countries in the top 10 are in Africa — Kenya (6.7%), Malawi (6.5%), Tanzania (6.5%), Egypt (6.0%), Madagascar (5.9%), Zambia (5.8%), Senegal (5.5%) and Philippines (5.5%).

 

“Our economic complexity predictions find India’s disputed upper hand in growth will expand into a widening gap in the medium-term, with growth projections to 2023 predicted to be at 7.9% annually, ahead of the 4.6% for China,” said

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Ricardo Hausmann, Professor of the Practice of Economic Development at Harvard Kennedy School), the leading researcher of The Atlas and the director of CID.

 

The projections also favour Pakistan’s potential, at 5.1% predicted growth, presenting a clear picture of South Asia and East Africa’s positive growth outlook.

 

The report notes that countries like India, Kenya and the Philippines have made quantum leaps in diversifying their exports “into more complex products”.

 

Citing the example of Libya, Venezuela, Namibia, Georgia and Qatar — all oil-based economies — the report warns of the dangers of failure to economically diversify as vindicated by the plummeting oil prices.

 

“For Uganda’s case, the economic projections are feasible. Government’s current investment in infrastructure will spur agriculture and create jobs,” Dr. Tom Mwebaze, Makerere University’s head of the department of policy and development economics, told New Vision on Sunday when asked about the projections.

 

Citing the example of China, Mwebaze downplayed concerns about Uganda’s fast-growing population turning out to be an impediment.

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“As long as the population is productive, there is no problem,” he said.

 

Commenting about the predictions, finance minister Matia Kasaija said: “This growth rate is feasible and in line with our projection. This will be possible if we continue investing in infrastructure, woo investors, avoid sinking resources into consumptive expenditure and encouraging more Ugandans to enter the money economy".

 

As to whether this will help scale down poverty levels is another matter. It is possible to increase wealth creation without reducing poverty” he added.

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