Since March 1946, the IMF and World Bank have held annual meetings.
During these gatherings, global economic and financial issues are discussed, and solutions are shopped for. These spring meetings, as they are called, attract central bankers, ministers of finance, members of civil society, parliamentarians, and thought leaders from all over the world.
This year, the convention was jointly held at the IMF and World Bank’s headquarters in Washington DC from April 21, through April 26. Attending from Uganda was a delegation of parliamentarians led by Nandala-Mafabi, and the central bank governor Dr Atingi-Ego.
Also present was the secretary to the treasury – Ramathan Ggoobi, and the state minister for Finance Henry Musasizi. Musasizi, who doubles as a member of parliament, co-chaired the coalition of Finance ministers for climate actions at the meetings.
In Uganda, official reports from the spring meetings are revered for being an actual representation of the state of the economy. Information that isn’t searchable on government platforms is readily availed at the annual assembly.
Accurate data on GDP growth, debt-to-GDP ratios, international reserves, average incomes, fiscal balances and inflation is released at the event. This year, in the document, Regional Outlook for Sub-Saharan Africa, it was disclosed that Uganda is a low-income country.
Its average yearly per capita gross income has been estimated at $1,145 [Shs 4.2 million] for the years 2020–2023 by the World Bank. The dossier noted that low-income countries increasingly rely on domestic debt which crowds out lending to the private sector, making borrowing expensive.
Documents at the spring meetings disclosed Uganda’s real GDP growth for 2024 to be 6.3 per cent. A step up from 4.9 per cent the year before. Real GDP growth is the measure of the expansion of the economy after the inflationary rate has been deducted.
Uganda’s debt-to-GDP ratio for 2024 was 51.8 per cent. Which means that for every dollar value of goods and services the economy produced, it owed 51.8 per cent of it to debt. In 2023, the debt-to-GDP ratio was 50.2 per cent.
Uganda’s international reserves in 2024 were filed at 2.6 months of import cover. A fall from 2.8 months in 2023, and 3.1 months in 2022. This presents a challenge of complex macroeconomic imbalances like inflation, currency devaluations and financing deficits.
“A healthy reserve position can help an economy recover more quickly from an unexpected shock, and so boosts overall confidence”, the Regional Outlook for sub-Saharan Africa reports.
“… reserves can be used to limit the impact of short-term exchange-rate volatility, which can be key in countries with shallow financial markets”, the document adds.
The IMF document additionally disclosed deficits in Uganda’s external current account, and overall fiscal balance. In 2024, Uganda’s current account deficit was 7.3 per cent, down from 8.6 per cent in 2022.
This indicates a piling up of liabilities to other countries that it will have to pay back. It also conveys underlying economic problems. Because Uganda is recurringly spending more money abroad than it’s bringing in; there are low levels of national saving and investment.
The overall fiscal deficit in 2024 rose to 5.8 per cent from 4.9 per cent in 2023. This means that the country is continually spending more than it earns in revenue year by year. The report shows a deficit spending going back to the 2011 financial year.
Consumer price averages fell to 3.3 per cent in 2024 from 5.4 per cent in 2023. Projections for 2025 stand at 4.2 per cent. This index is a widely accepted measure of inflation, and it shows that prices will stay low for the rest of this year.
Abebe Selassie, director of the African department, IMF, had this to say about the general economic outlook of the sub-Saharan region at the spring meetings: “We now expect growth in sub-Saharan Africa to ease to 3.8 percent in 2025 and 4.2 percent in 2026 … driven largely by difficult external conditions: weaker demand abroad, softer commodity prices, and tighter financial markets.”
“Official Development Assistance to sub- Saharan Africa is likely to decline further, placing extra strain on the most vulnerable populations.” Selassie remains optimistic about the region as he believes: “It is the region that will be the main source of labour and incremental investment and consumption demand in the decades to come.”
Nevertheless, the sub-Saharan region continues to grapple with poverty as nearly one- third of the population is living on less than $ 2.15 (Shs 7,900) a day.
With each Ugandan barely earning $1,145 (Shs 4.2 million) a year. Locally this translates to Shs 352,000 a month ($ 95) before taxes. This positions Uganda far from its coveted middle-income status.
kidambamark3@gmail.com
Why is this news? Was anyone expecting Uganda to be a middle or upper income country? Not with the rot, garbage, potholes, mud, dust, sewage flow on the streets, boda bodas, slums, corruption, poor leadership….. name it!
The IMF (the West) keeps regimes that align with their interests in power and are not that interested in their state of affairs.
Uganda remaining a low income country, meaning it keeps dependant on foreign aid tied to policies the West will dictate which are meant to maintain the status quo is intetionally orchestrated. Plus they ”determine” our income level. So no matter how the state is run, the West does not give a damn, as long as it is in line with the pursuit of the West’s interests.
I would have been surprised. I eat half a meal a day whenever I can afford it
The reality is our poor infrastructure-talk of pot-holed highways and capital city roads. Unemployment and poverty levels are soaring day by day as political expediency is eating away the country.
Hardly a surprising report. In fact, I personally say, “it’s a great report!” as it could have depicted the real thing for the vast majority of the population, but using the law of averages brings up some parameters and so it looks better.
Given the levels of shambolic management, bad parliament (we even have MPs who are also ministers that publicly boast of having the “maje” against other Ugandans), the tribalistic/flag-color segregation, lack of constitutionalism, power culture, rampant corruption that even includes the judiciary & security services, all these ill-fated cash drips, very poor education standards for decades, poor – and becoming poorer – nutrition & infrastructure … we’re busy rolling out the carpet for foreigners and even handing them cash to invest in our country whereas doing everything to stifle any little that could excite the locals. Can you imagine that even something as little as coffee, which had basically died for decades, when it sprung to life, again we were up in arms, bribing legislators to compromise, and giving ownership rights to another foreigner against the protests of the real owners – the local Ugandan farmers? Can you imagine that any farmers’ coffee cooperatives have basically bee quashed rather than supporting and promoting them? Can you imagine Uganda is already registered as exporting oil products and Ugandans are basically blind on the developments or any visible positive effects.
It’s all divide and conquer, you see.
Do we need a foreign guru to rightly point it out that, “Uganda is recurringly spending more money abroad than it’s bringing in; there are low levels of national saving and investment.”… saying this right in the face of our son in Min of Finance whom I’ve understood to say he has the “economics that works”?
Now, with all these things with a divided Uganda and stagnant ideas and a growing negative progression e.g. debt and trade deficit, are we looking for another round? You know how very poor people; they’re very excited to at least go to middle east and die trying as a kadama … no wonder whoever excites them with a few tricks they’ll vote for that one and they won’t ever ask for accountability. We, at the moment, are far from getting there; the talk of middle class is just castles in the air – more of folklore tales and very far from reality.
Alimba, we don’t need IMF where we are going Uganda is going to be the Richest Country in the world, oil from the west, water, foods and agriculture we growing stronger, may be we need to build trains that connect Uganda to a sea port that is Kenya or Tanzania.