Uganda was among the first Sub-Saharan African countries to embark on liberalization and pro-market policies in the late 1980s. Real gross domestic product (GDP) growth averaged 7% per year in the 1990s and the 2000s, but from 2006 and onwards, the country witnessed more economic volatility and gross domestic product (GDP) growth slowed to an average of just about 5%. New statistical evidence from the rebasing of national accounts to FY2009/10 and the 2014 population census suggests that the Ugandan economy is about 20% larger than had previously been calculated, while the population is 3% smaller. Going forward, a huge public investment program is expected to drive growth while private investments remain subdued. The economy is forecast to grow at a rate of approximately 5.6% in FY14/15, and could maintain an upward trajectory into the near future, as oil investments and the large infrastructure program boost construction activities. The agricultural sector, which employs the bulk of the labor force, is unlikely to achieve high rates of growth due to supply-side constraints, such as limited use of improved inputs, lack of irrigation systems and low levels of mechanization.
The country has to manage a number of risks, particularly fiscal risks associated with low revenues in the face of reduced aid inflows to Uganda, the sequencing and overall management of the financing and implementation of the government’s huge infrastructure development program, and spending pressures, all of which could disrupt spending plans.
When the National Resistance Movement (NRM), led by Yoweri Museveni, took power in 1986, the government started to focus on restructuring the economy through pro-market reforms and increasing the legitimacy of public institutions through political liberalization. However, a civil war waged by the Lord’s Resistance Army (LRA) in Northern Uganda left thousands dead and millions displaced, dampening economic activity and deepening poverty in the region. The LRA was pushed out of Uganda in 2005, and there have been no major security incidents since then. Economic activity has resumed in Northern Uganda, and most internally displaced persons have returned to their land.
Following the promulgation of the 1995 constitution, President Museveni was elected to a first term in 1996. He was re-elected in a contested election in 2001. The constitutional amendments approved by a referendum in July 2005 introduced multi-partyism, and Parliament lifted the two, five-year presidential term limits, which allowed President Museveni to seek a third term in office during the elections in 2006. On February 28, 2011 President Museveni was re-elected to yet another five-year term and his party enjoys an overwhelming majority in the 375-member Parliament. The next elections are scheduled to take place in February 2016.
Uganda has made important progress towards meeting the Millennium Development Goals (MDGs), especially with respect to income poverty, promoting gender equality and women empowerment reducing child mortality, ensuring environmental sustainability and developing a global partnership for development. The two decades of strong economic growth with poverty reducing from 56% in 1992-93 to 19.7% by 2012-13, thus surpassing the 2015 MDG target of halving the poverty rate. However, Uganda remains a very poor country. Despite declining poverty rates, the absolute number of poor has decreased relatively little due to high population growth with Uganda’s population doubling since 1990. Moreover, the poverty line is low and many remain poor and vulnerable to poverty. Inequality is also high by international standards (0.438), which could undermine the achievements in growth and poverty reduction. A key challenge to accelerating progress towards middle income status and promote shared prosperity is to raise productivity in sectors where most people are employed or move people from low to higher productivity activities.
Health-related Millennium Development Goals (MDGs), including child and maternal mortality rates, remain low, while progress that had been achieved on access to HIV/AIDS, malaria and tuberculosis treatment has reversed in some aspects. Uganda is also off-track on the MDGs related to universal primary education. Performance of the North and North-East regions is lagging for most indicators, while the South-West performs worst on health-related indicators. At the same time, many people who are not poor, are still classified as vulnerable, partly because the majority of the population derives livelihood from agriculture.
Last Updated: Apr 09, 2015