Summary
- Uganda’s economy shows resilience with GDP growth reaching 6% in FY23/24, supported by diversified exports and upcoming oil production. Despite challenges, the country aims for sustained growth, emphasizing increased public spending on healthcare to enhance human capital development and ensure inclusive prosperity.
KAMPALA, Uganda, 27 June 2024 – The Ugandan economy continues to show robust growth despite facing intensified climate impacts and a challenging global environment. According to the latest World Bank Uganda Economic Update, titled “Improving Public Spending on Health to Build Human Capital,” the outlook remains positive. The report highlights a GDP growth acceleration from 5.3% in FY22/23 to an estimated 6% in FY23/24, driven by diversified exports and investments in oil export infrastructure ahead of the 2025 oil production.
Key economic indicators such as low inflation, recovering real income, and resilient private investment have bolstered consumption and manufacturing orders. Per capita income has risen to approximately $980 in FY22/23, positioning Uganda closer to achieving lower-middle-income status through sustained growth.
Looking forward, the report forecasts a cautious but promising medium-term outlook, with GDP growth projected at 6.2% in FY24/25 and expected to exceed 7% in subsequent years, primarily driven by investments in the oil and gas sector. However, geopolitical tensions have led to slightly revised forecasts, necessitating tighter monetary policies to manage inflationary pressures.
To sustain economic resilience and foster inclusive growth, the report emphasizes the importance of managing debt, enhancing revenue mobilization, and improving public investment management. Critically, it underscores the need for increased investment in human capital development, particularly in healthcare, given Uganda’s youthful population and vulnerability to public health challenges.
Currently, Uganda’s public spending on health remains low and declining, at $6.8 per capita, with households and external partners funding the majority of health expenditures. The report advocates for comprehensive health financing reforms to ensure adequacy, equity, efficiency, and sustainability in healthcare financing. It recommends prioritizing primary healthcare, disease prevention, and health promotion, alongside strengthening public-private partnerships and enhancing the health workforce’s availability and productivity.
Addressing these challenges and implementing these recommendations will not only improve healthcare service quality but also position Uganda to harness its demographic dividend effectively. As Uganda navigates its economic trajectory, strategic investments in health and education are crucial to achieving sustainable development and resilient growth.
For further details and recommendations, the full Uganda Economic Update can be accessed through the World Bank’s official channels.
