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StatementJuly 7, 2022

A Statement on the World Bank Approach to Global Income Classification

KAMPALA, July 7, 2022 — On June 30, 2022, the World Bank released the 19th edition of its biannual Uganda Economic Update (UEU) in Kampala. Among the issues reported, Uganda’s gross national income (GNI) per capita was US $840 based on fiscal year (FY) 2020/21 data.

The calculation of US $840 GNI contained in the 19th edition of the UEU is based on data from FY2020/21, which is the same reference period for all member countries included in the current global income classification. The World Bank has carried out income classifications annually since 1989 to ensure consistency and global comparability. The current global income classifications were released on July 1, 2022, comprising low, lower-middle, upper-middle, and high income countries. These classifications are based on GNI per capita calculated using data from the previous fiscal year.

The GNI per capita measure used by the World Bank is derived from the sum of the gross domestic product (GDP) and net income of residents, converted into United States dollars using conversion factors, according to the Atlas method, which the World Bank has used since 1993.

The GNI per capita estimates and the updated operational thresholds are circulated to the World Bank’s Board of Executive Directors for information and all member countries of the World Bank are assigned to these classifications prior to the end of every fiscal year. These income classifications are used to guide the World Bank’s operational lending for the fiscal year.

According to the latest income classifications, low-income economies are defined as those with a GNI per capita of $1,085 or less; and lower-middle income economies are those with a GNI per capita between $1,086 and $4,255. Middle- and high-income classifications are also established annually.

The World Bank’s operational lending policy provides low-income countries access to concessional financing terms, with low to zero interest rates, through the International Development Association (IDA).  Generally, middle-income countries get less concessional terms, depending on their income levels, as IDA targets most of its grant financing to countries with high debt vulnerability. Middle income countries that are financially creditworthy, may also access financing from the International Bank for Reconstruction and Development (IBRD).

The World Bank’s income classifications are also used by other development partners for analytical and operational reasons. The wide use and acceptability of these income classifications is due to a robust methodology that is standardized across all countries.

The World Bank supports its member countries to accelerate economic growth thereby moving up the income classification ladder. Typical areas of support include investment financing, knowledge, analytics, and advisory support.

Uganda’s GNI per capita improved significantly over the past few decades, although in recent years, this has slowed due to a series of shocks, while the country maintained a high rate of population growth.  Deepening ongoing reforms would accelerate improvements in GNI per capita.

The World Bank has been an active Development Partner in Uganda since 1963 and currently has US $5.6 billion in commitments including 28 projects of which 4 are regional.   The World Bank remains committed to supporting Uganda’s development journey within the context of the country’s Vision 2040.

Additional information on the World Bank’s income classification framework is accessible on this link - (FAQ).


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