Uganda

In 2011, the Ugandan economy declined from gross domestic product (GDP) growth of over 6% the previous year to 4.1%. Over the course of the year, inflation averaged 18.8%, up from 4.1% in 2010, the exchange rate depreciated by 6.2% against the US dollar (USD), and the trade deficit increased from 9.6% to 10.8% of GDP.

Supérieure à 6 % en 2010, la croissance du produit intérieur brut (PIB) de l’Ouganda est tombée à 4.1 % en 2011. Sur l’année, l’inflation est ressortie à 18.8 % en moyenne (contre 4.1 % en 2010), le taux de change s’est déprécié de 6.2 % par rapport au dollar des États-Unis (USD) et le déficit commercial s’est creusé, de 9.6 à 10.8 % du PIB.

This case study considers the domestic political economy of Uganda, and the influence of international drivers on these dynamics. For almost 25 years, Uganda has been characterised by relative economic stability and development, but also by questionable levels of democratic governance. Corruption is perceived to be an increasing challenge in Uganda, with a worsening regional position in Transparency International’s Corruption Perception Index and a number of recent high-profile procurement scandals.

The Ugandan economy recorded weaker growth of 5.1% in 2010 because of receding aggregate demand, mainly in private consumption, and weak external demand for traditional exports, in particular coffee. In spite of the declines, regional demand for Uganda's exports remained high. Export earnings fell from 2.9 billion US dollars (USD) in the financial year 2008/09 to USD 2.8 billion in 2009/10. Although lower than 2008/09 levels (USD 883 million), remittance receipts in 2009/10 (USD 820 million) surpassed traditional foreign exchange earners coffee and tourism. Earnings from coffee and tourism in 2009/10 were USD 262 million and USD 400 million respectively. Sustained public investment in infrastructure and the global recovery are expected to spur growth in the short to medium term. The near-term prospects for the oil and gas sector remain uncertain because of disputes between the government and oil exploration firms. The real gross domestic product (GDP) growth rate is projected to increase to 5.6% in 2011 and 6.9% in 2012 because of increasing regional demand and the improved global outlook.

En 2009, l’économie ougandaise a affiché un taux de croissance impressionnant de 7 %, malgré l’atonie persistante de l’économie mondiale. Après les violences postélectorales au Kenya au début de l’année 2008, qui ont perturbé les relations commerciales entre les deux pays, la situation s’améliore même si le prix des carburants reste élevé. La demande d’exportations ougandaises et les transferts de fonds des travailleurs expatriés ont repris avec le recul de la récession mondiale. En conséquence, la croissance devrait atteindre 7.4 % en 2010 et poursuivre sur sa lancée en 2011, à 7.9 %. Les résultats seront encore meilleurs si les autorités tiennent leurs promesses de lancer la production de pétrole d’ici deux ou trois ans. En 2009, la croissance a été tirée par le secteur des services et l’industrie alors que l’agriculture restait déprimée. Les services représentent environ la moitié du produit intérieur brut (PIB), contre 26 % pour le secteur industriel et 25 % pour le secteur primaire. Du côté de la demande, la croissance s’explique surtout par la consommation privée (+6.7 %) mais les investissements ont eux aussi fortement progressé. Ils devraient s’accélérer tout au long de la période de prévision, avec des taux de respectivement 17 et 18 % en 2010 et en 2011 pour l’investissement privé et l’investissement privé.

The Ugandan economy grew at the impressive rate of 7% in 2009, despite the continued weakness of the world economy. ð“e effects of the disruption of the trade link between Uganda and Kenya following the post-election violence in Kenya in early 2008 eased, but domestic fuel prices remain high. Demand for Uganda�fs exports and remittances from abroad started to pick up as the global recession also eased. As a result, the growth rate is expected to rise to 7.4% in 2010 and further improve to 7.9% in 2011, and it may be even higher if the government lives up to its promises to start oil production in the next two or three years. Growth in 2009 was led by the services and industrial sectors, while agricultural performance remained sluggish. Services account for about half of gross domestic product (GDP), the industrial sector for 26% and the primary sector for 25%. On the demand side, growth was mainly driven by private consumption (up 6.7%), but investment also grew strongly. Investment growth will accelerate over the forecast period, with growth rates for both private and public investment projected at 17% in 2010 and 18% in 2011.

The Constitution of Uganda includes anti-discriminatory provisions and condemns any custom that contradicts human rights. But discrimination against women is rife and the situation of Ugandan women is further aggravated by deeply rooted patriarchal tradition and years of armed conflict. The government has enacted new laws to improve the situation of women, but their implementation has been obstructed by some reticent communities.

EN 2008, L’ÉCONOMIE OUGANDAISE a affiché une progression impressionnante de 7 pour cent, malgré les turbulences de l’économie mondiale et l’instabilité régionale. Cette croissance est tirée par les secteurs des services et de l’industrie, tandis que l’agriculture stagne. Le pays a dû faire face à de nombreux problèmes, notamment les violences post-électorales au Kenya, début 2008, qui ont perturbé l’importante liaison commerciale avec le port de Mombasa, l’épuisement des réserves halieutiques dans le lac Victoria, la flambée des cours du pétrole au premier semestre et, plus récemment, l’aggravation de la crise économique mondiale. Ce fléchissement général menace le système financier ougandais, freine la demande d’exportations et comprime les envois de fonds des travailleurs expatriés.

THE UGANDAN ECONOMY GREW AN IMPRESSIVE 7 per cent in 2008 despite the turmoil in the world economy and regional instability. Growth has been led by the service and industrial sectors, while agriculture has stagnated. Numerous challenges include post-election violence in Kenya at the beginning of 2008, which disrupted the crucial trade link with Mombasa port, the depletion of fish stocks in Lake Victoria, soaring oil prices in the first half of the year and most recently the worsening global slump. The global downturn threatens the Ugandan financial system, dampens demand for exports and reduces remittances from abroad. As a consequence of these shocks, growth is expected to slow to 5.6 per cent in 2009 before recovering to 6.1 per cent in 2010. High fuel and food prices pushed inflation up to an estimated 12 per cent in 2008. The government is pressing ahead with a fiveyear National Development Plan (NDP) focusing on infrastructure and agricultural development in a bid to increase exports and remove constraints to further growth. Uganda continues to be a leader in social progress in Africa with poverty reduction and improvements in health and education but much remains to be done.

UGANDA CONTINUES TO SUSTAIN THE SUCCESS of the last two decadeswith the economy characterised by high growth and lowinflation.The realGDP growth ratewas 6.0 per cent in the 2006/07 fiscal year and is projected to rise to 6.2 per cent in 2007/08. Economic performance in 2006/07 benefited fromincreased export diversification and investment in construction and services. The base of Uganda’s growth seems to be broadening as reflected in the introduction of newproducts, exports, technology and movement of labour into new occupations. But growth remains belowpotential because of infrastructure constraints, especially the energy deficit, and shocks as a result of flooding that destroyed crops and transport infrastructure in some areas.

Uganda’s economy has undergone major fluctuations from a vibrant economy in the 1960s, to suffering severe macroeconomic imbalances in the 1970s and 1980s, to enjoying an economic revival since the late 1980s. A key focus of recent public financial management reforms has been to improve macroeconomic performance and ensure strict budgetary discipline, in particular through the use of a three-year rolling budgetary plan as early as 1992/93. However, problems with the cash budgeting system undermined efforts to improve budget planning, requiring complementary reforms to cash management and commitment control systems. Reforms have also focused on poverty reduction, expenditure efficiency and effectiveness, financial management and accountability, and transparency and openness.