During the budget reading at Kololo Ceremonial Grounds on Thursday, Finance Minister Matia Kasaija announced that Uganda’s economy has fully recovered from various internal and external shocks experienced over the past four years.
The economy is projected to grow by 6 percent for the financial year 2024/25, a significant increase from the 5.3 percent growth recorded in FY2022/23. This growth rate outpaces the Sub-Saharan Africa average of 3.8 percent and the global average of 2.9 percent projected for 2024.
Minister Kasaija highlighted that the size of Uganda’s economy has now reached UGX 202 trillion (USD 53.3 billion), up from UGX 184.3 trillion (USD 48.8 billion) in nominal terms. This growth translates to a GDP per capita increase to USD 1,146, compared to USD 1,081 in the previous financial year.
The minister attributed this robust economic performance to higher growth across all sectors.
The services sector is estimated to grow by 6.6 percent, agriculture by 5.1 percent, and industry by 5.8 percent in FY2023/24. The services sector’s impressive performance is mainly driven by a strong recovery in retail and wholesale trade, tourism, communication, and real estate activities.
Industrial growth has been fueled by manufacturing, construction, and mining, while the agriculture sector benefited from streamlined implementation of the Parish Development Model (PDM) and favorable weather conditions.
Key factors supporting the strong economic growth include low inflation, a stable exchange rate, increased investments in the oil and gas sector, higher external demand for Uganda’s products, a recovering tourism sector, and continued peace and security.
The Minister said in March 2024, Uganda met the requirements to graduate from the category of Least Developed Countries (LDCs) and moved from low human development to medium human development. This milestone is attributed to consistent improvements in health, education, the economy, and living standards.
Despite the positive economic outlook, Minister Kasaija acknowledged potential risks to growth, such as climate change, geopolitical tensions, high interest rates, and fluctuations in global commodity prices. To mitigate these risks, he said the government is implementing climate change adaptation measures, exploring cheaper financing sources, and ensuring frugality in government expenditure.
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