Blog post by Emmanuel Rukundo, Analyst at the Development Initiatives Nairobi office. Emmanuel can be contacted on emmanuel.rukundo@devinit.org.
To mark the 50th anniversary of Ugandan Independence, Development Initiatives has published a report outlining the current economic situation in the country, highlighting some of the economic and social challenges that it faces. Uganda: Resources-for-poverty-eradication, reveals that despite major strides taken in reducing poverty, the economic picture in Uganda (a country where 10% of the population is classified as chronically poor) is complex.
The report reveals that:
- Uganda has sustained an impressive economic growth rate over the past 20 years making it one of the fastest growing economies in the world, having undergone a “catching up” phase after decades of economic stagnation and political strife. Over the past 12 years, the country’s real gross domestic product (GDP) has grown at an average rate of over 7% per year, significantly more than its regional neighbours. Poverty has fallen by 6.6% in just 4 years.
- Tax revenue increased from US$805 million in 1998 to over US$4.3billion in 2010. Over the same period grants received by the government increased from US$397 million to US$1.1 billion in 2010 and overall net official development assistance (ODA) increased from US$655 million to US$1.7 billion. The United States and the World Bank continue to be the country’s main donors. Between 2006 and 2010, the United States gave over US$1.6 billion to the country while the World Bank gave over US$1.5 billion (excluding debt relief).
- As a result of increased revenue, there have been consistent increases in budgetary allocations to key sectors. The amount of resources received by the education and agriculture sectors has almost doubled in real terms in the past decade. Health allocations have also substantially increased, but experienced fluctuations. However, proportional public expenditure for education, health and agriculture has reduced due to the emergence of other sectors such as energy, increasing costs of public sector management and administration and high spending on security. Findings reveal that for each of the sectors, government funding has fallen short of required levels if social development is to be achieved and sustained.
- While the country has been commended for its poverty reduction, in fact over the last two decades only 2.4 million people have been lifted out of poverty, due to high population growth rates. Many more, especially women, continue to fall into chronic and intergenerational poverty. Although chronic poverty has reduced, more than 10% of the population (the equivalent of at least 3.5 million people) are classed as chronically poor.
- Almost three-quarters of the population suffer from at least one type of deprivation, outside of income. Over 70% of the population was deprived of electricity and energy for cooking, 69% was deprived of appropriate sanitation while over 40% showed poor indicators on child mortality.
- Uganda’s under-5 mortality rate is close to the sub-Saharan African average, at 128 deaths per 1000 births. This makes it the second worse country in the region for this indicator.
The report is one of a series of reports on East African Countries that DI will be publishing. If you would like to find out more about this work please contact Emmanuel Rukundo at emmanuel.rukundo@devinit.org.
