24th Edition of Uganda Economic Update Launched

The Minister of State for General Duties, Henry Musasizi, launched the 24^th edition of the World Bank’s Economic Update on Uganda with focus on investing in Early Childhood Development (ECD) for Transformation of Human Capital in Uganda.

The Minister said Uganda’s economy has fully recovered from a number of shocks including the Covid 19 pandemic, the increase in global commodity prices which led to imported inflation.

He said Government is committed to addressing challenges affecting private sector growth including the high cost of credit. He noted that through Uganda Development Bank, Government is ready to provide affordable credit at an interest rate of not more than 12%.

Musasizi also affirmed that Government through its Planning framework (NDP IV) under the Human Capital Development Programme is ready to invest in early childhood development.

Mr. Qimiao Fan, the World Bank Country Director, in charge of Uganda, Kenya, Rwanda and Somalia said that Uganda’s growth path remains resilient in the medium term, despite some risks including delays in oil production and climate-related shocks.

Ms. Mukami Kariuki, the World Bank Country Manager, said the aim these updates is to inform policymakers, stakeholders and the public, and also stimulate debate around topical issues by combining country-specific analysis with other experience in countries around the world.

Highlights of the Report

• The Ugandan economy continues to demonstrate resilience. Uganda’s economy recorded 6.1% growth in FY 2023/24 on top of 5.3% the year before. This growth remained broad-based with services and industrial sectors leading.
• Inflation in Uganda has significantly decreased, falling below the Central Bank’s target of 5%. During FY2023/24, headline inflation declined to 3.2% on average, from 8.8% in FY2022/23.

• Fiscal consolidation efforts continue but need more focus in domestic revenue mobilization (DRM) to mitigate negative impacts in priority expenditure like human capital investment.

• The medium-term outlook for Uganda remains broadly positive, with significant down-side risks. Real GDP growth is projected at 6.2% in FY2024/25.

• Human capital- knowledge, skill, and physical health that enable people to be productive- will play a pivotal role in improving Uganda’s long-term potential growth, especially for creating more jobs in non-oil sectors.

• Investment in ECD can significantly shape labor market outcomes for Uganda and drive economic growth. By enhancing cognitive and non-cognitive skills from a young age, increased ECD investment lays the foundation for higher educational attainment and better job performance, boosting worker productivity.