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Uganda is the third-largest economy in East Africa, after Kenya and Tanzania. The country has achieved astonishing economic performances in the last decades and, although slower, growth remains sustained. Between 1992 and 2010, the country experienced average economic growth of 8%, GDP per capita tripled and the poverty rate was cut in half. In 2022, however, the economy grew 4.4%, mainly driven by private investment and consumption, as well as a recovery in wholesale and retail trade, real estate, education, construction, manufacturing. The economy is expected to continue growing in 2023 and 2024, at an estimated rate of 5.9% and 6%, respectively.
In 2022, the country's current account deficit widened to USD 3.8 billion, as the increase in export revenues linked to the recovery in activity following the initial shock of the pandemic was offset by dried up earnings from the tourism industry. Public debt increased to 52.1%, mainly due to interest on domestic debt, which will continue to weigh on public finances in the coming years. Still, the debt-to-GDP ratio should remain stable in 2023 and 2024, at around 51.3% and 51%, respectively. Inflation increased to 6.4% in 2022, and it should remain stable at 6.4% in 2023, before decreasing to 5.7% in 2024. To mitigate the effect of the pandemic, the World Bank has provided the country with USD 300 million, which has been essential in Uganda's economic recovery following the crisis. In 2022, recovery has strengthened throughout the country, underpinned by improved business and trading conditions as COVID-19 restrictions eased.
Uganda has surpassed the Millennium Development Goal (MDG) of halving poverty by 2015, but the poverty rate has recently increased. According to the World Bank, one in five people lives in extreme poverty and about a third live on less than USD 1.90 / day . These rates have been heightened by the pandemic, and added to the 8.7 million people living below the poverty line in Uganda. The crisis effect has been worsened by heavy rains, flooding, and a locust invasion that has impacted agricultural production. In 2022, the unemployment rate in the country was at 3%. However, this figure does not reflect reality since a significant part of the population work in the informal sector.
Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
---|---|---|---|---|---|
GDP (billions USD) | 37.51 | 42.94 | 48.84 | 49.79 | 53.79 |
GDP (Constant Prices, Annual % Change) | -1.3 | 6.0 | 4.9 | 5.7 | 5.7 |
GDP per Capita (USD) | 910 | 1,011 | 1,117 | 1,105 | 1,159 |
General Government Gross Debt (in % of GDP) | 46.3 | 50.6 | 50.8 | 50.2 | 49.2 |
Inflation Rate (%) | 2.8 | 2.2 | 6.8 | 7.6 | 6.4 |
Current Account (billions USD) | -3.55 | -3.55 | -3.96 | -5.44 | -6.39 |
Current Account (in % of GDP) | -9.5 | -8.3 | -8.1 | -10.9 | -11.9 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Uganda has considerable natural resources, including fertile soils, regular rainfall, significant reserves of recoverable oil, and small deposits of copper, gold, cobalt, limestone, and other minerals. Agriculture is one of the most important sectors of the economy, employing 72.1% of the work force and accounting for 23.8% of the GDP. However, productivity is limited by the widespread use of traditional methods and equipment. In 2022, following job losses and closure of small businesses brought on by the pandemic, many Ugandans turned to agriculture to manage and survive the crisis, which further strained natural resources that were already under pressure from Uganda's rapid population growth, urbanisation, and industrialisation.
The country’s industrial sector is small and is dependent on imported inputs such as refined oil and heavy equipment. A number of supply-side constraints, including insufficient infrastructure, lack of modern technology and corruption hamper productivity. The sector contributes to 27.1% of GDP, but employs only 6.5% of the workforce. The most important sectors are the processing of agricultural products, the manufacture of light consumer goods and textiles, and the production of beverages, electricity, and cement. Most industries are small, local firms with limited manufacturing added value, while the larger industries in the country are predominantly foreign owned. In 2022, the industry sector showed a strong recovery following the decline in industrial activity brought on by the pandemic, particularly in construction and manufacturing.
The services sector in Uganda represents 41.8% of GDP and employs 21.4% of the active population; however it is detached from primary sectors like agriculture and manufacturing, thus lacking the ability to spur economic growth. The ICT sector is one of Uganda’s fastest-growing sectors, recording double-digit growth over the last few years, largely driven by the telecommunications sector. In 2022, increased domestic demand boosted the services sector following the negative impacts that were felt during the initial phases of the pandemic, particularly in wholesale and retail trade, real estate, and education.
Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
---|---|---|---|
Employment By Sector (in % of Total Employment) | 72.1 | 6.5 | 21.4 |
Value Added (in % of GDP) | 23.8 | 27.1 | 41.8 |
Value Added (Annual % Change) | 4.3 | 3.5 | 2.8 |
Source: World Bank - Latest available data.
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Monetary Indicators | 2016 | 2017 | 2018 | 2019 | 2020 |
---|---|---|---|---|---|
Uganda Shilling (UGX) - Average Annual Exchange Rate For 1 MUR | 96.23 | 104.73 | 109.83 | 105.26 | 94.42 |
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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Uganda is open to foreign trade, which accounts for 41.7% of its GDP (World Bank). The country is a member of numerous international organisations, such as the WTO, COMESA, EAC (East African Community), ESAAMLG (anti-money laundering group in Eastern and Southern Africa), and IGAD (Intergovernmental Authority for the Development of the Horn of Africa States). The country mainly exports gold (43.8%), coffee (12.4%), cocoa beans (2.4%), tea (1.9%), and petroleum oils (1.9%). Its main imports are gold (22.3%), petroleum oils (11.3¨%), medicaments (3.6%), palm oil (3.3%), and motor cars (2.2%).
Uganda's main trading partners are the United Arab Emirates, Kenya, China, India,Tanzania, South Sudan, the Democratic Republic of Congo, and Italy. The country's trade policy aims to encourage cooperation and integration in East Africa to stimulate production and increase export earnings. Tariffs are not very high and the country has few non-tariff barriers to trade. However, corruption and underdeveloped infrastructure remain major obstacles to trade. The political situation in South Sudan, one of the country's main trading partners with Kenya, continues to affect trade flows. Besides, weak global growth, affected by trade tensions between the United States and China and stagnant growth in Europe, may negatively impact Ugandan exports. The wealth of natural resources, the improvement of national security, and the return of Indo-Ugandan entrepreneurs in exile are factors favouring foreign trade.
Uganda's trade balance is structurally in deficit. In 2021, exports of goods amounted to USD 4.1 billion, while imports reached USD 8.7 billion, resulting on a negative trade balance of USD 3 billion. As for services, exports reached USD 1.8 billion, while imports amounted to USD 3.2 billion. As such, the overall trade balance amounted to a deficit of USD 4.5 billion in 2021. Imports of goods and services should remain high in the coming years due to investment in major infrastructure projects, food needs, and economic growth, which have boosted demand for consumer goods.
Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 5,596 | 6,729 | 7,518 | 8,251 | 8,784 |
Exports of Goods (million USD) | 2,901 | 3,087 | 3,477 | 4,149 | 4,193 |
Imports of Services (million USD) | 2,048 | 2,528 | 2,653 | 3,004 | 3,211 |
Exports of Services (million USD) | 1,375 | 1,610 | 1,752 | 882 | 1,852 |
Imports of Goods and Services (Annual % Change) | 2.4 | 8.4 | 7.1 | 0.4 | 18.9 |
Exports of Goods and Services (Annual % Change) | 32.9 | 9.4 | 4.3 | -1.2 | 0.2 |
Imports of Goods and Services (in % of GDP) | 20.2 | 21.6 | 22.3 | 21.6 | 25.9 |
Exports of Goods and Services (in % of GDP) | 16.7 | 15.1 | 17.1 | 15.4 | 15.8 |
Trade Balance (million USD) | -1,714 | -2,462 | -2,755 | -2,637 | -3,046 |
Trade Balance (Including Service) (million USD) | -2,136 | -2,647 | -3,623 | -4,635 | -4,527 |
Foreign Trade (in % of GDP) | 36.8 | 36.6 | 39.4 | 37.0 | 41.7 |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
Main Customers (% of Exports) |
2020 |
---|---|
United Arab Emirates | 44.5% |
Kenya | 11.2% |
South Sudan | 8.6% |
Democratic Republic of Congo | 6.4% |
Italy | 3.3% |
See More Countries | 25.9% |
Main Suppliers (% of Imports) |
2020 |
---|---|
China | 16.4% |
India | 11.6% |
Kenya | 9.4% |
Tanzania | 9.0% |
United Arab Emirates | 6.0% |
See More Countries | 47.6% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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2.0 bn USD of services exported in 2018 | |
---|---|
52.24% | |
Personal travelPersonal travel | 44.75% |
Business travelBusiness travel | 7.49% |
20.24% | |
9.90% | |
9.22% | |
3.52% | |
2.67% | |
1.08% | |
0.53% | |
0.35% | |
0.25% |
2.5 bn USD of services imported in 2018 | |
---|---|
55.59% | |
28.28% | |
7.35% | |
Personal travelPersonal travel | 5.39% |
Business travelBusiness travel | 1.97% |
3.15% | |
2.93% | |
1.07% | |
0.69% | |
0.44% | |
0.32% | |
0.19% |
Source: United Nations Statistics Division, Latest Available Data
Other minor parties in the country are: Alliance for National Transformation (ANT), Justice Forum (JEEMA), and People's Progressive Party (PPP).
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: September 2023