A forecast for Uganda's economy, Finance Minister Matia Kasaija announced that the country is poised to achieve steady-state growth of between 6.4 percent and 7.0 percent in the next financial year. This growth is expected to accelerate to double digits over the next five years, marking a significant recovery from the economic challenges of the past four years.
Minister Kasaija, while presenting the 2024/2025 budget on Thursday, highlighted that Uganda's GDP is projected to grow by 6 percent in the Financial Year (FY) 2023/2024, a notable increase from the 5.3 percent growth recorded in FY2022/2023. He emphasized that this growth rate surpasses the average growth rates for sub-Saharan Africa and the global economy, projected at 3.8 percent and 2.9 percent, respectively, for 2024.
“This year’s growth of six percent is more impressive when compared to sub-Saharan Africa’s average of 3.8 percent, and the global average of 2.9 percent projected for the year 2024,” Kasaija remarked.
Looking ahead to FY2024/2025, Uganda's GDP is expected to expand to Shs225.5 trillion ($60 billion). These figures do not yet include anticipated revenues from oil and gas, which are expected to begin flowing with the start of oil production in FY2025/2026.
Kasaija outlined several key drivers for this projected economic growth. The burgeoning oil and gas sector will play a crucial role, alongside increased exports bolstered by regional trade within the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA), as well as expanded trade with partners in the Middle East and Asia. The tourism sector is also set to contribute significantly, supported by investments in infrastructure, branding, and marketing, as well as the implementation of the Meetings, Incentives, Conferences, and Events (MICE) Programme.
Additionally, the finance minister pointed to agro-industrialization and light manufacturing as vital components of economic growth, facilitated by access to affordable credit through the Uganda Development Bank (UDB). Other important initiatives include investments through the Uganda Development Corporation (UDC), the Parish Development Model, the Small Business Recovery Fund, Emyooga, and the Presidential Industrial Hubs for Youth Entrepreneurs. These programs aim to support exporters and enhance the productivity of women's enterprises.
However, Minister Kasaija cautioned that several risks could potentially impact these growth projections. Climate change poses a threat to agricultural production and infrastructure, while regional and global geopolitical tensions, high interest rates, and fluctuations in global commodity prices could also pose challenges. To mitigate these risks, the government is implementing climate change adaptation measures, exploring cheaper sources of financing, including climate finance, and ensuring prudent government expenditure.
With these strategies in place, Uganda is well-positioned to navigate potential risks and sustain its impressive economic growth trajectory in the coming years.
