Uganda’s Economic Growth Remains Resilient Amid Global Challenges – Ggoobi
Uganda’s economy continues to demonstrate resilience, maintaining strong growth despite global economic uncertainties. Addressing the state of the economy and the ongoing 2024/25 budget process, Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, outlined key economic achievements, challenges, and the government’s strategies for sustaining growth.
The economy has been expanding steadily, recording a 6.1% growth rate in the last quarter, with a peak of 6.7% in a previous quarter.
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This growth is expected to accelerate further as oil revenues begin to flow. Uganda’s Gross Domestic Product (GDP) is projected to reach USD 59 billion by June 2025 and surpass USD 60 billion in the 2024/25 financial year.
Ggoobi also noted that Foreign Direct Investment (FDI) has seen significant growth, reinforcing investor confidence in Uganda’s economic trajectory.
Additionally, the Ugandan Shilling remains one of the most stable currencies in Africa, outperforming several larger economies in currency stability over the past decade.
Inflation has declined significantly, standing at 3.6% as of January, a sharp drop from 10.4% in October 2022. This reduction reflects the effectiveness of monetary policies in managing aggregate demand.
To maintain economic stability, the Bank of Uganda (BOU) has kept the key interest rate at 9.75%, balancing economic stimulation while keeping inflation in check. These measures have helped stabilise prices and maintain investor confidence.
Debt servicing remains a major concern, consuming 31% of government revenue. However, Ggoobi reassured that Uganda is managing its debt better than many of its peers.
He cited the government’s recent decision to withdraw from borrowing USD 440 million at a 9% interest rate due to unfavourable market conditions, demonstrating a cautious and strategic approach to debt acquisition.
Despite initial skepticism, the Parish Development Model (PDM) has significantly contributed to grassroots economic growth.
While some critics feared that funds allocated to local communities would be mismanaged, Ggoobi emphasised that the initiative has played a transformative role in economic expansion and financial inclusion.
However, challenges remain. Corruption and weaknesses in the taxation system continue to hinder economic progress. Ggoobi reaffirmed his commitment to professionalism, ethical governance, and integrity in public service, warning ministry officials that once trust is lost, it cannot be regained—likening it to toothpaste squeezed from a tube.
He acknowledged ongoing efforts to combat corruption, noting that while some officials have faced legal action for misconduct, government operations and economic progress remain uninterrupted.
He also cautioned that corruption cartels often target individuals committed to reform.
With strong macroeconomic fundamentals, stable inflation, and growing investor confidence, Uganda is on track for sustained economic growth. The anticipated oil revenues are expected to further accelerate development and create new opportunities.
As the government finalizes the 2024/25 budget, the focus remains on prudent financial management, strengthening domestic revenue collection, and ensuring that economic gains translate into improved livelihoods for all Ugandans.
Additionally, the construction of the Standard Gauge Railway (SGR) is set to begin in March. The contractor is fully mobilised, the contract has been signed, and the government has already disbursed the first tranche of funding to the Ministry of Works. The SGR is expected to be completed within the next four years.
Despite existing challenges, Uganda’s economy has demonstrated its ability to withstand shocks. With continued fiscal and monetary discipline, the country is well-positioned for long-term economic prosperity.
