In a two-part report on Uganda’s economic environment, the World Bank found that the country is poised to recover from a brief slump and build back up to previously seen growth rates of 7 percent a year. Uganda will likely benefit from recent oil-related investments, but how it manages these benefits is crucial to its success moving forward. It will need to execute prudent fiscal management and good governance and work to diversify its economic base. The biggest challenge facing the government is one detailed in the second part of the report: creating a business environment that will enable farms and firms to grow and create productive jobs.
Uganda’s macroeconomic environment has seen ups and downs. From 2001 to 2008, the country’s economy grew at a good clip: an average of 9.3 percent annually. That rate then began declining, reaching a low of 3.4 percent in 2012. This was accompanied by a decrease in per capita income and an increase in the proportion of people living below the poverty line (from 25 percent to as much as 29 percent). The economy picked up again in 2013 and is estimated to have grown at a rate of about 5 percent.