Uganda economy to grow by 7% – IMF

The International Monetary Fund says Uganda’s economy is poised to experience economic growth of 7 per cent in the financial year 2024/2025 from 6 per cent in financial year 2023/2024, in one of the highest forecasts by the institution in recent years.

The announcement came as the executive board of the International Monetary Fund concluded the fifth review of Uganda’s Extended Credit Facility Arrangement.

The ECF arrangement for Uganda, which stands at $1 billion, was approved by the executive board of IMF on June 28, 2021 with the aim of supporting the near-term response to the Covid-19 pandemic and boost inclusivity in the private sector to bring about long-term growth.

According to the IMF, the economic recovery in Uganda continues to gain strength, following a rapid decline in inflation, favourable agriculture and robust industrial and services activity.

The IMF has advised Uganda to focus on creating fiscal space for priority social spending, keep its debts low and within sustainable levels, strengthen governance, and reduce corruption, among others, if economic growth has to go higher.

“Growth is projected to reach 6 per cent in FY23/24 benefiting from favourable weather conditions, construction and investment in the oil sector, subdued inflation, and positive impacts from the roll-out of the Parish Development Model. Exports are expected to recover further amid robust coffee and gold trade, while imports are likely to remain elevated reflecting large investments associated with the oil project. Over the medium term, growth is projected to return to its pre-pandemic trend of 6-7 per cent boosted by oil production” the staff appraisal report of the IMF noted.