Bank of Uganda last week projected that Uganda’s economy will grow by 6.2% in the FY2018/19 having grown by 6.4% in the first quarter of this financial year according to the latest report from Uganda Bureau of Statistics (UBOs).
This is a major improvement from the 4.5% growth in the first quarter of FY 2017/18
According to Bank of Uganda (BoU), the economy is expected to grow even further in the coming years, with a projected sustainable 6.2% in 2019/2020 and 7% in the next two years.
The two-year projection is based on massive investments in infrastructure development related to the oil and gas sector and the related expected increase in Foreign Direct Investment inflows.
Despite this growth, however, economists are still pessimistic about its actual impact to the citizens in terms of job creation, poverty reduction and general welfare of the population.
According to a Pricewaterhouse Coopers (PwC) report for Uganda’s economic outlook for 2019, although the economy is now on a path of rapid and sustained growth, the number of new jobs arising from this growth has been disappointingly low.
The report indicates that although the economy grew by an average of 4.5% year on year between FY2015/16 and FY2017/18, the number of people living in poverty increased in the same period from 19.7% in FY2015/16 to 21.4% in FY2017/18
Additionally, during the last ten years the economy (measured at current market prices) has nearly trebled in size from Shs 35,065 billion in FY08/09 to UShs 100,531 billion in FY17/18. However in that same period, average GDP per capita at current prices has increased by only 23% from USD 650 in FY08/09 to USD 799 in FY2017/18 .
“Sustained growth of the economy is expected to create jobs, drive poverty reduction and make growth more inclusive. This means that whereas the economy is growing, this growth has not been inclusive enough as it has not translated into job creation, poverty reduction and significant wealth creation for Ugandans,” part of the report reads.
This lack of economic growth reflection on the general population is attributed to the fact that the growth has come from infrastructure investments and the oil and gas sector which do not have a direct impact on the general population especially the low earners
“This is Mainly because in the past ten years, Uganda’s growth has been originating mainly from investments in public infrastructure as well as the mining and oil and gas capital intensive sectors, rather than in traditional labor intensive sectors such as agriculture, manufacturing and tourism” the report states.