Uganda budget speech: transforming the economy

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Highlights: For full budget speechh download here

Due to sound economic management under the NRM Government, the economy has continued to grow at a pace averaging 8.4 percent since 2006.
This solid performance is even higher than the remarkable economic growth that Uganda has experienced since 1986, which has led to a six-fold increase in the size of the economy that now stands at U. Shs. 34.2 Trillion.
The economy has been transformed from a largely agriculture-based one, to one spurred by significant industrial and service growth.

The industrial sector has increased its share in GDP from 9.9 percent in 1986 to 24.5 percent in 2009; the service sector has increased from 36.1 percent in 1985 to 50.3 percent, while the dominance of the agricultural sector has declined from 53.9 percent in 1985 to 14.9 percent in 2009 indicating the extent of transformation.

Inflation has been kept to a single digit from the peak when annual headline inflation rates averaged about 153 percent between 1986-1990’s - another major achievement of the NRM.
The economy is estimated to have grown by 5.8 percent in real terms in 2009/10, compared to 7.2 percent growth recorded in 2008/09. This year’s performance is in line with the Eastern African region average growth rate of 5.75%, which is the highest in Africa’s regions. This shows the resilience of the region to economic shocks.

The exchange rate appreciated from over Shs.2,100 in July 2009 to Shs.1,874 in November. This was due to the increased proceeds from exports, increased inflows of foreign exchange from NGOs and remittances from Ugandans working abroad. However, it depreciated to Shs.2200 in May 2010 driven by increased demand for dollars from offshore players and commercial banks, together with the depreciation of the Euro against the dollar as a result of the turmoil in the Euro Zone which has contributed to the strengthening of the dollar against other currencies as global markets continue to shift into dollar denominated assets.
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