The Government of Uganda has been urged to prioritise diversification of exports, dealing with climate change, employment creation, and creation on local markets if it is to achieve sustainable economic recovery.
Speaking during the 5th Economic Growth Forum at Kampala Serena Hotel on Thursday, 13 January 2022, economic experts said Uganda needs to achieve and sustain much higher growth to attain middle income status.
Jonathan Leape, an Associate Professor of Economics at the London School of Economics and Political Science, speaking via a video link, said Uganda should take advantage of the free trade areas, maximize its industrial parks and link SMEs to the external market.
“Job creation is critical for economic growth. Uganda’s unemployment rate is one of the highest in Africa. One of the ways to create employment is by growing the economy,” he explained.
Nicholas Stern, a British economist, banker, and academic, emphasized that without addressing concerns over climate change, it will be difficult for Uganda to sustain growth in years to come.
“Unless we address the issue of climate change, in some years to come, it will be difficult for people to spend time outside because of the extreme weather conditions,” he warned.
Dr Michael Atingi-Ego, the Deputy Governor Bank of Uganda, speaking on fiscal policy, called for reduction in spending on non-priority areas, postponement of capital intensive and import dependent projects to help improve external balance as well as revenue enhancing measures to protect against future shocks.
Dr Atingi-Ego said evidence show that recovery in global economic growth after adverse impact of COVID-19 has been partly driven by countries with strong well diversified economies, governance structures, remote working and vulnerable support.
“For low-income countries, because of limited diversification, pre-existing structural inefficiencies and narrower fiscal space, any adverse shocks, even temporary ones, can have profound impact on the economy,” he explained.
Dr Albert Musisi, the Commissioner for Macroeconomic Policy at the Ministry of Finance, Planning and Economic Development, said focus areas are making Uganda’s growth more inclusive (transition from subsistence to market economy, informal to formal employment) and improving effectiveness of government in terms of policy implementation.
Others he said include building resilience to future shocks (internal & external), diversification of export basket & markets, dealing with climate change, using trade to drive recovery and accelerated growth.
“For 19 years (1992-2011), Uganda achieved average annual GDP growth of 7.3% but growth in the last decade has slowed to an average 4.5%. We need to sustain the high growth rates,” he said.
“We want to ensure that economic growth is a means to development and not an end in itself. The goal is to provide evidence to inform our national budget priorities,” he added.
The Minister of State for Planning, Mr Amos Lugoloobi, who opened the 5th Economic Growth Forum, is optimistic that the ideas from the forum will be incorporated into Government development strategies for next financial year and the medium term.
The economy is now expected to grow at about 3.8% but Amos Lugoloobi says Uganda needs to achieve and sustain much higher growth to attain middle income status, adding that government is doing everything possible to minimize the impact of COVID-19.