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Uganda’s economic growth exceeds expectations

Uganda’s economic growth exceeds expectations

In his address during a press briefing on Quarter 2 FY 2023/24, the Permanent Secretary of the Ministry of Finance, Planning, and Economic Development, Mr. Ramathan Ggoobi highlighted several key developments and state of the economy.

Mr. Ggoobi reported that Uganda’s economy is on a steady recovery path, with an estimated growth rate of 5.3% for the fiscal year 2022/23.

This marks a notable improvement from the 4.6% growth rate recorded in the previous fiscal year (2021/22).

The outlook for the current fiscal year is even more promising, with an expected growth rate of 6.0% in FY 2023/24.

Inflation Tamed; One of the noteworthy achievements highlighted was the significant reduction in inflation. Headline inflation has declined to 2.7% in September 2023, down from a peak of 10.7% in October 2022. This decline in inflation reflects the effectiveness of economic policies in stabilizing prices and maintaining affordability for consumers.

Fiscal Responsibility The Permanent Secretary emphasized the government’s commitment to fiscal consolidation. As a result, the public debt as a percentage of GDP has been steadily decreasing. Projections indicate that by June 2023, the debt-to-GDP ratio will stand at 47.1%, down from 48.4% in June 2022. This demonstrates the government’s efforts to manage its finances prudently.

Robust Revenue Collection; The cumulative domestic revenue collections for the fiscal year up to the end of September 2023 reached Ushs 6.327 trillion. This represents a remarkable 16.5% growth compared to the same period in the previous fiscal year. This surge in revenue collection is indicative of a growing and more vibrant economy.

SACCO Capitalization and Disbursements; Mr. Ggoobi noted that all 10,585 verified Savings and Credit Cooperative Organizations (SACCOs) were successfully capitalized with Ushs 100 million each as of June 30, 2023.

Furthermore, disbursements from SACCO accounts to beneficiaries have reached 63%.

He urged Chief Administrative Officers to ensure that 100% of these funds are disbursed by the end of October to enable beneficiaries to leverage the upcoming rainy season for their economic activities.

Prioritized Government Initiatives; In his concluding remarks, the Permanent Secretary outlined several key priorities for government institutions and accounting officers:

  1. Timely payment of wages, salaries, pensions, and gratuities by the 28th of each month.
  2. Prioritization of timely payments to service providers to prevent the accumulation of arrears.
  3. Monthly display of payrolls for salaries and pensions on government institutions’ notice boards.
  4. Timely submission of performance reports and accountability.
  5. Pre-payment of utilities (water and electricity) by government institutions, with non-compliant entities facing service interruptions.
  6. Effective supervision of the implementation of government programs and projects.

Uganda’s economy appears to be on an upward trajectory, with impressive growth rates, controlled inflation, and responsible fiscal management. The government’s focus on transparency and accountability further enhances the country’s economic outlook, providing optimism for both investors and citizens alike.

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