Publication: Uganda Economic Update, 20th Edition: Unlocking the Benefits of the African Continental Free Trade Area and Regional Integration
Loading...
Published
2022-12
ISSN
Date
2023-01-09
Author(s)
Editor(s)
Abstract
The Ugandan economy will need to grow rapidly, sustainably, and broadly (i.e., in a shared manner), to reach middle-income status, lift its population out of poverty, and generate enough jobs for one of the fastest growing populations in the world. To do so, the country needs to unlock its growth potential by allocating productive factors to their most efficient uses. However, like many least developing countries, Uganda suffers from a small domestic market and distortions, which leads to misallocation of resources. As a result, international trade will play a critical role in solving some of the current challenges faced by the Ugandan economy and ultimately boosting economic growth and development. For Uganda, greater integration into global value chains will be crucial to create jobs outside of subsistence agriculture and the informal economy. Sustained growth in trade will also increase consumer welfare by expanding options and lowering prices of consumer goods. Regional trade agreements can help Uganda diversify its range of markets and products, mitigating the risk of external shocks by lessening dependence on any single trading partner. Greater intra-African trade also offers opportunities to add more value to export commodities and to leverage the potential of agribusiness to promote inclusive growth. The African Continental Free Trade Area (AfCFTA) offers opportunities for Uganda to deepen its access to regional markets and exploit the growth potential of the region. Expanding regional and continental trade offers significant benefits for Uganda, including potential economies of scale, new export opportunities, access to higher levels of the value chain, and forums to improve trade facilitation. However, non-tariff barriers continue to limit trade, including the discriminatory use of technical regulations, non-harmonized sanitary and phytosanitary requirements, and complex rules of origin. Security challenges such as the closure of the border between Rwanda and Uganda in 2019 has also constrained regional integration. To benefit fully from the AfCFTA, Uganda and her neighbors will need to overcome hurdles that have long weakened the effectiveness of existing regional arrangements by facilitating better trade through improved logistics, infrastructure, addressing non-tariff barriers and avoiding the politically motivated trade barriers like border closures.
Link to Data Set
Citation
“World Bank. 2022. Uganda Economic Update, 20th Edition: Unlocking the Benefits of the African Continental Free Trade Area and Regional Integration. © World Bank. http://hdl.handle.net/10986/38411 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Uganda Economic Update, 25th Edition: Increasing Uganda’s Fiscal Space throughImproved Revenue Mobilization and Enhanced Efficiency of Spending and Service Delivery(Washington, DC: World Bank, 2025-09-26)Economic growth in Uganda remains strong. Real GDP growth accelerated from 6.1 percent in 9M-FY24 to an estimated 6.8 percent in 9M-FY25. This robust performance was mainly driven on the supply side by improvement in the commodity producing sectors as well as in manufacturing. This was particularly notable in pharmaceuticals and construction-related activities, which stood out. In contrast, the services sector recorded a broad-based deceleration. On the demand side, household consumption remained strong and a key contributor to growth, followed by government consumption. Moreover, gross fixed capital formation posted moderate growth, consistent with the rise in construction activity. High frequency indicators continue to support this dynamic growth, reflecting stronger demand, increased new orders, and higher output across sectors.Publication Uganda Economic Update 21st Edition(Washington, DC, 2023-12-18)Economic activity in Uganda is accelerating despite commodity-price inflation, global monetary tightening, international supply-chain bottlenecks, and a local Ebola outbreak. Real GDP growth is estimated to reach 5.7 percent in FY22/23, albeit still below the pre-COVID-19 projection of 6.5 percent. Growth has been supported by a robust post-pandemic recovery in the services sector, bolstered by the rapid growth of information and communications technology. Real estate and construction also performed well, while agriculture suffered from droughts in some regions and heavy rains in others, as well as rising input costs. The recovery of income and employment bolstered demand, while private investment overcame tight domestic and global financial conditions to sustain increases in new exports and manufacturing orders into the third quarter of FY22/23. As growth accelerated, Uganda’s per capita income increased to about US$930 for FY21/22, edging closer to the lower-middle-income threshold.Publication Uganda Economic Update, 19th Edition(Washington, DC, 2021)New shocks hit the Ugandan economy in 2022, just as it was recovering as the COVID-19 pandemic waned and related mobility restrictions were fully removed. Commodity price surges and disruptions to trade and supply chains because of the war in Ukraine worsened a global economy that was dragging under the weight of new waves of COVID-19 in some regions and unwinding of stimulus policies. The outlook for Uganda is now one of slower GDP growth with increased vulnerabilities, including in household incomes and food security. The authorities face the challenge to maintain a delicate balance between policies required to support and sustain a growth acceleration and ensuring stability otherwise the start-stop recovery as shocks evolve, will make it impossible for Uganda to build back better.Publication Uganda Economic Update, 13th Edition, May 2019(World Bank, Washington, DC, 2019-05-29)The World Bank’s analysis of cross-country data on human capital indicates that Uganda is underinvesting in the future productivity of its citizens. A child born in Uganda today will onlybe 38 percent as productive when she grows up as she could be if she enjoyed complete education and full health. Uganda is ranked among the countries in the lowest quartile of the Human Capital Index (HCI) distribution, with an index slightly lower than the average for the Sub-Saharan Africa (SSA) region, and below what would be predicted by its income level. Uganda’s low ranking in the HCI is mainly due to the country’s low education outcomes. A child born today in Uganda is expected to complete only 7 years of education by age 18, compared to a regional average of 8.1. Because of the low levels of learning achievement in Uganda, this is only equivalent to 4.5 years of learning, with 2.5 years considered as “lost” due to poor quality of education (as shown by thequality-adjusted years of schooling component of the HCI). Uganda’s score on this componentis the lowest amongst the comparator countries and below the SSA average.Publication Uganda Economic Update, 11th Edition, May 2018(World Bank, Washington, DC, 2018-05)Uganda's fiscal policy has remained mainly expenditure driven, with domestic revenue continuing to lag. This has resulted in a widening financing gap. In the 10-year period to 2017, the total valueof public expenditure increased from 15 percent of GDP to more than 20 percent. During this time, the tax-to-GDP ratio grew by an average annual rate of 0.2 percentage points, with the value of collected revenues increasing from 10 to 13.8 percent of GDP over the same period. By 2016, the value of Uganda's collected per capita revenues stood at US$ 211 of PPP adjusted to 2011 international dollars. This covered 66 percent of general government expenditures, with the remainder covered by loans and grants. The gap between revenues and expenditures could continue to increase into the future, with the expenditure increasing to meet the need to develop thestock of physical infrastructure and to raise the quality and quantity of social services to meet the needs of Uganda’s rapidly expanding population.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2023: Migrants, Refugees, and Societies(Washington, DC : World Bank, 2023-04-25)Migration is a development challenge. About 184 million people—2.3 percent of the world’s population—live outside of their country of nationality. Almost half of them are in low- and middle-income countries. But what lies ahead? As the world struggles to cope with global economic imbalances, diverging demographic trends, and climate change, migration will become a necessity in the decades to come for countries at all levels of income. If managed well, migration can be a force for prosperity and can help achieve the United Nations’ Sustainable Development Goals. World Development Report 2023 proposes an innovative approach to maximize the development impacts of cross-border movements on both destination and origin countries and on migrants and refugees themselves. The framework it offers, drawn from labor economics and international law, rests on a “Match and Motive Matrix” that focuses on two factors: how closely migrants’ skills and attributes match the needs of destination countries and what motives underlie their movements. This approach enables policy makers to distinguish between different types of movements and to design migration policies for each. International cooperation will be critical to the effective management of migration.Publication World Development Report 2024(Washington, DC: World Bank, 2024-08-01)Middle-income countries are in a race against time. Many of them have done well since the 1990s to escape low-income levels and eradicate extreme poverty, leading to the perception that the last three decades have been great for development. But the ambition of the more than 100 economies with incomes per capita between US$1,100 and US$14,000 is to reach high-income status within the next generation. When assessed against this goal, their record is discouraging. Since the 1970s, income per capita in the median middle-income country has stagnated at less than a tenth of the US level. With aging populations, growing protectionism, and escalating pressures to speed up the energy transition, today’s middle-income economies face ever more daunting odds. To become advanced economies despite the growing headwinds, they will have to make miracles. Drawing on the development experience and advances in economic analysis since the 1950s, World Development Report 2024 identifies pathways for developing economies to avoid the “middle-income trap.” It points to the need for not one but two transitions for those at the middle-income level: the first from investment to infusion and the second from infusion to innovation. Governments in lower-middle-income countries must drop the habit of repeating the same investment-driven strategies and work instead to infuse modern technologies and successful business processes from around the world into their economies. This requires reshaping large swaths of those economies into globally competitive suppliers of goods and services. Upper-middle-income countries that have mastered infusion can accelerate the shift to innovation—not just borrowing ideas from the global frontiers of technology but also beginning to push the frontiers outward. This requires restructuring enterprise, work, and energy use once again, with an even greater emphasis on economic freedom, social mobility, and political contestability. Neither transition is automatic. The handful of economies that made speedy transitions from middle- to high-income status have encouraged enterprise by disciplining powerful incumbents, developed talent by rewarding merit, and capitalized on crises to alter policies and institutions that no longer suit the purposes they were once designed to serve. Today’s middle-income countries will have to do the same.Publication World Development Report 2021(Washington, DC: World Bank, 2021-03-24)Today’s unprecedented growth of data and their ubiquity in our lives are signs that the data revolution is transforming the world. And yet much of the value of data remains untapped. Data collected for one purpose have the potential to generate economic and social value in applications far beyond those originally anticipated. But many barriers stand in the way, ranging from misaligned incentives and incompatible data systems to a fundamental lack of trust. World Development Report 2021: Data for Better Lives explores the tremendous potential of the changing data landscape to improve the lives of poor people, while also acknowledging its potential to open back doors that can harm individuals, businesses, and societies. To address this tension between the helpful and harmful potential of data, this Report calls for a new social contract that enables the use and reuse of data to create economic and social value, ensures equitable access to that value, and fosters trust that data will not be misused in harmful ways. This Report begins by assessing how better use and reuse of data can enhance the design of public policies, programs, and service delivery, as well as improve market efficiency and job creation through private sector growth. Because better data governance is key to realizing this value, the Report then looks at how infrastructure policy, data regulation, economic policies, and institutional capabilities enable the sharing of data for their economic and social benefits, while safeguarding against harmful outcomes. The Report concludes by pulling together the pieces and offering an aspirational vision of an integrated national data system that would deliver on the promise of producing high-quality data and making them accessible in a way that promotes their safe use and reuse. By examining these opportunities and challenges, the Report shows how data can benefit the lives of all people, but particularly poor people in low- and middle-income countries.Publication Western Balkans 6 Country Climate and Development Report(Washington, DC: World Bank Group, 2024-07-16)This Regional Western Balkans Countries Climate and Development Report (CCDR) stands out in several ways. In a region that often lacks cohesive regional alliances, this report emphasizes how the challenges faced across countries are often common and interconnected, and, importantly, that climate action requires coordination on multiple fronts. Simultaneously, it illustrates the differences across countries, places, and people that require targeted strategies and interventions. This report demonstrates how shocks and stressors re intensifying and how investments in adaptation could bring significant benefits in the form of avoided losses, accelerated economic potential, and amplified social and economic spillovers. Given the region’s high emission and energy intensity and the limitations of its current fossil fuel-based development model, the report articulates a path to greener and more resilient growth, a path that is more consistent with the aspiration of accession to the EU. The report finds that the net zero transition can be undertaken without compromising the economic potential of the Western Balkans and that it could lead to higher growth than under the Reference Scenario (RS) with appropriate structural reforms.Publication World Development Report 2022(Washington, DC: World Bank, 2022-02-15)World Development Report 2022: Finance for an Equitable Recovery examines the central role of finance in the economic recovery from COVID-19. Based on an in-depth look at the consequences of the crisis most likely to affect low- and middle-income economies, it advocates a set of policies and measures to mitigate the interconnected economic risks stemming from the pandemic—risks that may become more acute as stimulus measures are withdrawn at both the domestic and global levels. Those policies include the efficient and transparent management of nonperforming loans to mitigate threats to financial stability, insolvency reforms to allow for the orderly reduction of unsustainable debts, innovations in risk management and lending models to ensure continued access to credit for households and businesses, and improvements in sovereign debt management to preserve the ability of governments to support an equitable recovery.