Uganda’s economy is on a recovery trend after facing the negative impacts of the ongoing COVID-19 pandemic. The economy grows by 3.3% in 2020/21 financial year amid COVID-19 pandemic. A recovery tagged this growth to how quickly the country and the region access the COVID-19 vaccines to limit the impact of the pandemic.
Chris Mukiza, executive director of Uganda Bureau of Statistics (UBOS) told that preliminary estimates show that in nominal terms, the size of the economy increased to 148.278 trillion shillings (about 42.4 billion U.S. dollars) this financial year 2020/2021 from 139.711 trillion shillings (39.9 billion dollars) in the financial year 2019/20.
In terms of Gross Domestic Products (GDP), the UBOS estimates show that the economy grew by 3.3 percent during the current financial year compared to the revised GDP growth of 3.0 percent in 2019/20.
“The country is recovering from the negative impacts of the COVID-19 pandemic”
The expansion, although still below the potential annual growth rate of 6-7 percent, suggests that the country is recovering from the negative impacts of the COVID-19 pandemic which hit the country in March last year, said Mukiza.
In terms of sectoral performance to GDP, UBOS figures show that agriculture, which is the source of livelihood to the majority of Ugandans contributed 23.7 percent this financial year compared to 23.9 percent in financial year 2019/20.
The contribution of the industry sector increased to 27.4 percent in the 2020/21 financial year from 26.5 percent in 2019/20.
The growth in the industrial sector, according to Mukiza, is attributed to the improved performance in manufacturing activities which grew by 2.1 percent this financial year compared to 1.3 percent in the previous year.
The services sector continued to be the biggest contributor to the GDP although it registered a setback decline in 2020/21 with its share contribution registering 41.5 percent from 42.8 percent in 2019/20. The setback was due to COVID-19 lockdown restrictions, according to experts.
Government, according to the ministry of finance, will mid this month present its national budget detailing how it will handle the negative impacts of the COVID-19 pandemic in a bid to put the country back to its earlier projected growth of 6-7 percent per year.
Figures released by the country’s central bank, Bank of Uganda earlier this year, showed that the projected recovery will increase to 4.0-4.5 percent and 6.0-7.0 percent in the financial year 2021/22, and in outer years, respectively.
The financial institution however tagged this growth to how quickly the country and the region access the COVID-19 vaccines to limit the impact of the pandemic.
“Whereas advanced economies are expecting a rapid vaccine-fueled recovery, the damaging effects of the pandemic could persist in less developed economies that may not receive the vaccines quickly”
The bank in February said whereas advanced economies are expecting a rapid vaccine-fueled recovery, the damaging effects of the pandemic could persist in less developed economies that may not receive the vaccines quickly. The bank cited the case of Uganda’s exports that largely target the Common Market for Eastern and Southern Africa region, where the vaccine rollout is likely to be sluggish.
This effect could be detrimental to domestic economic growth recovery in the medium and long term, the central bank said then.
Uganda is currently grappling with the impacts of the second wave of the pandemic with confirmed daily cases of up to 1,000 recorded.
Ministry of Health figures show that as of June 1, the country’s confirmed cases since March last year were 49,759 and 365 deaths.
The ministry of health has warned that the country’s health facilities were quickly filling up with severe COVID-19 cases.
The country’s President Yoweri Museveni is scheduled to address the country on Sunday to map out new ways of combating the pandemic.
Economic experts have however warned that as the country paves ways of combating the pandemic, lockdown restrictions re-imposed are likely to hurt the economy more.