Uganda's economic growth rate at 4.6%

Statistics from the Uganda Bureau of Statistics (UBOS) show that Uganda's economy economic growth rate stands at 4.6% in the Financial Year (FY) 2015/16 down from the 5% growth rate that was registered in the FY 2014/15.

The regression in Gross Domestic Product (GDP) is attributed to economy volatilities such as the depreciation of the shilling which slowed down investments.

Chris Mukiza the UBOS director macro-economic statistics released the preliminary GDP estimates at Statistics House in Kampala recently and noted that Uganda's economy continued to grow in the financial year 2015/16 but at a much slower pace compared to the 2014/15. The statistics will be read today.

"Uganda's economy in real terms has expanded to sh55.7 trillion in the 2015/16, up from sh53.2 trillion that was registered in the previous financial year 2014/15," Mukiza said.

He said that the sectors that led to the expansion of the economy included; agriculture which grew by 3.2% up from 2.3%.  

The agricultural sector growth contributors were cash crops which grew by 2.2%, forestry 3.7% from 1.7% and food crops 3.1% from 2.9%.

Mukiza added that service sector registered a stronger growth rate of 6.6% from 4.5%. 

The contributors to this sector are; storage and transportation which grew by 7.7% from 6.2%, accommodation and food services at 6.9% from -0.1%. These registered sh29.6 trillion from sh26.9 trillion.

He noted that the construction sector also performed well with a 5.7% expansion from 2.7% that was registered in 2014.

The communication sector registered the same growth rate of 2.7%.

"The sectors which performed lowest include; manufacturing which declined from 11.0% to 0.4% and industry from 7.8% to 3%" he added.

Mukiza further added that the export performance weakened thereby registering a 0.5% growth rate in the 2015/16 down from 9.4% recorded in 2014/15.

"If we would try to improve the manufacturing sectors, we would gain from export earnings," he said.

Stephen Kaboyo a financial analyst said the effects of the recent economic downturn are lingering on.

"The economy faced very strong headwinds last year such as a weak shilling, high interest rates and upward inflationary pressures.

And because of this, some fundamentals of the economy were eroded including foreign direct investment flows and savings among others which come with long term consequences for growth," Kaboyo said.

He added that obstacles including slow progress towards regional integration and infrastructure deficits persistently undermine Uganda's economic performance and growth potential.