Due to the COVID-19pandemic, Uganda’s real gross domestic product (GDP) rose at 2.9 percent in FY20, less than half of the 6.8 percent recorded in FY19. In FY21, GDP is predicted to expand at a similar pace.
Due to a four-month domestic lockdown, border closures for all but essential cargo, and the spillover effects of interruptions to global demand and supply networks, economic activity stopped in the second half of FY20. This led in a severe drop in public investment and a slowdown in private consumption, wreaking havoc on the manufacturing and service sectors, notably the informal sector.
Real GDP growth is predicted to slow by up to 1% in 2020, compared to 7.5 percent in 2019, and real per capita GDP growth is expected to slow by roughly 4.5 percent. Even if GDP growth picks up significantly by 2022, per capita GDP is projected to remain substantially below pre-COVID levels.
The medium-term outlook for Uganda has deteriorated significantly as a result of COVID-19, which has shifted risks to the downside. If the global impact of COVID-19 lasts longer, or the virus spreads more broadly in Uganda, it might derail Uganda’s export recovery; negatively impact a resurgence in FDI, tourism, and remittances; and further decrease productivity and internal economic recovery. This could have more severe social and economic consequences, as well as exacerbate external and fiscal imbalances.
Furthermore, while reduced oil prices are good for Uganda’s trade balance and real development, they put investment plans in the Ugandan oil sector, which was supposed to start producing and exporting by 2024/25, in jeopardy. Finally, increased uncertainty in the run-up to the 2021 election, as well as weather shocks, could intensify the dangers.
Despite a slowing in average economic growth over the last decade, structural transformation was driving a decline in poverty prior to the COVID-19 epidemic. The change was marked by a decrease in the total number of people working in agriculture and an increase in industrial production, particularly in agro-processing. Despite transitions to higher-productivity jobs, per capita real GDP growth slowed to 1.3 percent from 2.2 percent between 2010 and 2015 in the five years leading up to the COVID-19 crisis, as population growth accelerated to 3.7 percent per year. Furthermore, as evidenced by the brief increase in poverty following the 2016/17 drought, impoverished individuals remain extremely vulnerable to shocks.
Following the COVID shock, there have been extensive company closures, permanent layoffs in industry and services, a dramatic slowdown of activity, especially in the urban informal sector, and a return of workers to agriculture. Household incomes have also decreased, which is worrying given Uganda’s high levels of poverty and insufficient social safety nets, as well as the impact this may have on human capital development and the country’s potential to benefit from its demographic transition.
Low production is heavily relied upon. Agriculture (which accounts for nearly a quarter of the GDP, half of exports, and 70% of employment) also contributes to income instability and stagnation. The economy needs to create at least 700,000 jobs each year to keep up with labor force growth, which is significantly more than the 75,000 jobs that are now created each year. Raising salaries even higher will necessitate increased agricultural productivity as well as possibilities to absorb excess labor into more productive jobs in industry and services.
Uganda’s Human Capital Index (HCI) is poor; a child born today in Uganda is likely to be 38 percent as productive as she could be if she had access to a full education and good health. In comparison to the Sub-Saharan African average of 8.3, a child who begins school at the age of four is only projected to finish 6.8 years of schooling by the age of eighteen. Actual years of learning, on the other hand, are 4.3, with 2.5 years considered “wasted” due to poor educational quality. By the end of primary school, 83 percent of 10-year-olds are unable to read and comprehend a simple text. This is higher than the regional norm (80 percent ).
Only 95 out of 100 Ugandan children survive to the age of five. Undernutrition is widespread in Uganda, with stunting affecting 29% of children aged 5 and under. Despite lower fertility rates, Uganda’s yearly population growth rate of 3% is among the highest in the world. Uganda’s 42 million people are predicted to rise to 100 million by 2050, while the country’s yearly urban growth rate of 5.2 percent is among the highest in the world, with 6.4 million people in 2014 expected to grow to 22 million by 2040.
Beyond causing economic disruption, the COVID-19 pandemic has the potential to reverse recent advances in health and human capital development if effective prevention and control measures are not implemented quickly and at scale.
Uganda’s refugee population has nearly tripled since July 2016, to over 1.4 million, making it Africa’s and the world’s third largest refugee host country. While the country’s open-door refugee policy is one of the most progressive in the world, with refugees having access to social services, land, and jobs, the continual influx, along with limited resources, is putting a strain on existing facilities and service delivery in host communities.
What will Uganda’s GDP be in 2021?
According to Trading Economics global macro models and analysts, Uganda’s GDP is predicted to reach 32.50 USD billion by the end of 2021. According to our econometric models, Uganda’s GDP will trend around 34.00 USD billion in 2022.
What causes Uganda’s poverty?
Despite being a Sub-Saharan African country with one of the best rates of poverty reduction, Uganda remains one of the world’s poorest countries. According to a 2016 poverty study, Uganda’s poverty rate fell dramatically between 2006 and 2013. The percentage of Ugandans living in poverty has decreased from 31.1 percent in 2006 to 19.7% in 2013.
The question today is whether this poverty reduction can be sustained, given Uganda’s lack of major non-monetary resources. Sufficient sanitation, electricity, health and well-being, education, and nutrition are among them. The causes of poverty in Uganda, as well as their consequences, are discussed here.
Leading Causes of Poverty in Uganda
- In Uganda, there are little safety net programs, which makes households more vulnerable to falling back into poverty. Only 1% of Uganda’s Gross Domestic Product (GDP) was spent on social security in 2013, according to reports. This figure is significantly lower than the Sub-Saharan African average of 2.8 percent. Because of this lack of social security, 35% of Ugandans rely on their life savings, while 25% rely on family. For the vast majority of people, this makes re-entering poverty quite likely.
- In Uganda, diseases are another source of poverty. With 131 deaths per 1,000 births, infant and child mortality rates remain high. In Uganda, families are frequently large. Larger families are more prone to slip into poverty due to a lack of cash and resources. Poor health also decreases a family’s ability to work, resulting in poverty being passed down down the generations.
- Between 2006 and 2013, agriculture led to a 79 percent reduction in poverty in Uganda, but there is still much opportunity for improvement. Despite the fact that agriculture provides a living for a substantial percentage of the people, there is still a labor shortage. Agriculture productivity must be improved further in order to create more jobs and lift people out of poverty.
- Ugandans are short on trained labor due to their heavy reliance on agriculture and the informal economy. Uganda’s ability to collect vital non-monetary resources is hampered by a lack of skilled labor, which limits Uganda’s subsistence possibilities. This also results in a lack of forward mobility, which perpetuates poverty.
Despite significant poverty reduction, Uganda’s poverty persists, indicating the need for additional government support and global contributions. More attention to foreign aid policies is required to sustain poverty reduction in emerging countries.
Why is Uganda known as Africa’s Pearl?
Because of its vast biodiversity, color, profusion, sparkling life, and tranquil beauty, Uganda is known as Africa’s gem. Uganda has a wide range of attractions to offer, and you’re certain to find anything you need in the travel industry in Uganda.
Uganda is home to some of Africa’s most beautiful scenery, including crystal clear lakes, snow-capped mountains, tropical rain forests, semi-harvested savanna, primates, birds, and more. The country’s location on the equator is why Winston Churchill dubbed it the “Pearl of Africa,” describing it as a “fairy tale” with unique environmental qualities and a temperate climate. Words alone are insufficient to depict Uganda; you must visit the country for yourself.
Mountain gorillas are located only in three nations throughout the world: the Democratic Republic of Congo, Rwanda, and Uganda. Uganda is home to half of the world’s mountain gorillas, making it the most popular tourist destination for this endangered species.
Uganda has the highest concentration of birds in Africa, with over 1040 species. Migratory birds from North Africa and Europe can be found in Uganda. With almost 600 kinds of birds, Queen Elizabeth is the number one birding attraction. All national parks provide possibilities for birding, and Kidepo Valley National Park is home to the world’s largest bird.
The spectacular Rwenzori ranges, often known as the moon mountains, will leave you speechless as you witness a diverse range of biological environments, including savannah grasslands, rainforests, heath, alpine, and permanent ice and snow. It’s the third highest mountain in Africa and the most challenging to climb, with some of its spectacular peaks covered in glaciers.
The old Nile, the world’s longest river, squeezing through a tight passage of seven meters wide and generating a 45-meter cascade before meandering in a tranquil stream to Lake Albert, may be found in Murchison Falls National Park. Over 450 bird species and a variety of mammal species can be found in the park. The Victoria Nile begins in the country’s east, in the world’s second largest freshwater lake and largest tropical lake.
The Ugandan people have a diverse cultural heritage, with several tribes preserving their ancestral cultures. The Kasubi royal tombs, which serve as a burial location for Buganda rulers, have been designated as a world cultural heritage site, and it is one of the most traditionally African-built structures in the sub-Saharan African region. There are several cultural sites around the country, as well as plenty to learn from the people, particularly the nomadic Karamojongs. Tourists may sample all of the city’s traditions at the Ndere cultural center. Uganda is home to more than 45 ethnic groups.
Uganda is home to a diverse range of wildlife, including tree climbing lions, which can also be found in Tanzania’s Lake Manyara. Other animals found in Uganda include lions, cheetahs, leopards, elephants, buffaloes, rhinos, bush bucks, water bucks, reed bucks, bush duikers, hyenas, Genet’s, hippocampus, bush bucks, and many others. The Big Five of Africa are guaranteed to be seen in Uganda. With approximately 1500 animal species, the plentiful wildlife may be found in the 12 game reserves and 10 national parks.
Ugandans are some of the friendliest people you’ll ever meet; they’re warm, welcoming, and always welcome to visitors. The majority of the inhabitants can communicate in basic English or Kiswahili.
PILLAR RANKINGS
Uganda has the best investment environment and enterprise conditions, but the worst economic conditions.
Conditions of Life. In comparison to a decade earlier, the most significant improvement was in Economic Quality.
Is Uganda wealthy or impoverished?
- Despite reductions in poverty, Uganda remains one of the world’s poorest countries. In 1993, 56.4 percent of the population lived in poverty; by 2013, that number had dropped to 19.7 percent.
- Between 1993 and 2016, overall poverty rates dropped, however between 2013 and 2016, they climbed somewhat.
- While the number of persons classified as “poor” has decreased, the number of people who live above the poverty line but are at risk of going below it has risen.
- People in this group those who are not poor but are at risk of becoming poor are most likely to slip into poverty as a result of negative shocks, such as the consequences of Covid-19.
- At the national level, falling poverty belies less favourable regional developments. Poverty levels have risen in eastern, western, and central Uganda in recent years.
- Non-economic proxies of poverty, such as sector performance measures in education, health, and WASH, also show regional differences (water, sanitation and hygiene).
- Uganda’s poverty statistics, which is heavily concentrated at the national and regional levels, has gaps. Since 2014, there has been no official publication of poverty statistics at the district and parish levels.
- In 1990, Uganda’s national poverty level was set at US$0.88 to US$1.04 per person per day (the variation depends on region). It portrays poverty trends in a far more optimistic light than the World Bank’s extreme poverty definition of US$1.90 per person per day, which was modified in 2015. (This factsheet covers both poverty levels.)
What is Uganda’s most important export?
Uganda exports primarily agricultural products (80 percent of total exports). Coffee (22 percent of total exports), tea, cotton, copper, oil, and fish are the most important exports. Sudan (15%), Kenya (10%), DR Congo, Netherlands, Germany, South Africa, and the United Arab Emirates are Uganda’s top export partners.
Opportunities
In Uganda’s agriculture industry, there are major investment potential in production, input supply, value-added processing, standards compliance and export, and post-harvest management. There is room to boost coffee production and the amount of coffee shipped to the United States in the coffee business. Uganda produces the most coffee in Africa, yet only 5.7 percent of its exports go to the United States. Uganda’s coffee exports in June 2021 were the greatest in a single month since 1991, according to the Uganda Coffee Development Authority (619,388 60-kilo bags valued at $58.56 million). The government has devised a comprehensive plan to raise coffee production from 402,000 tons per year to 1.2 million tons per year by 2025.
Which Ugandan tribe is the poorest?
The Batwa people live in great poverty as one of the poorest populations in one of the poorest countries in the world, Uganda. They used to live deep in the African forests as one of the continent’s oldest indigenous tribes, but now they live in slums in cities. Many people have wondered how a population that had thrived for generations ended to scavenging garbage cans for food.
The Forest: A True Loss For The Batwa
The Ugandan government declared independence in 1991 “The Batwa lands have been categorized as national parks. Many Batwa people were forced to flee their homes, sometimes under duress. According to a 2008 estimate, 45 percent of the Batwa people were landless and poor.
The Batwa people have gone from a group that thrived on hunting and gathering to one that is now battling to survive. Many Batwa people are also seeking work from foreigners under “bonded labor arrangements,” resulting in prejudice from “their ethnic neighbors,” according to the research.
Furthermore, the Batwa people have lost more than their home; the forest served as a place of worship and healing for them. With the help of strong “Batwa people have lost a large part of their history and livelihood that provided them with herbal cures when members fell ill, according to their spiritual and religious links to the forest. The forest was extremely important to the Batwa people’s lives and culture.
The Batwa People’s Current Conditions
As previously stated, some Batwa work for non-Batwa members of their tribe. Others make their living by entertaining tourists that come to the nation. Unfortunately, because to the COVID-19 pandemic, tourist travel has been limited, resulting in a loss of income for many Batwa people, resulting in poverty. Many Batwa have resorted to “feeding from waste bins” to keep alive as a result of these situations.
Solutions
The Batwa’s community is dwindling as a result of the tremendous relocation that has taken place in their place. With few to no resources to keep alive, they are on the verge of extinction. In addition, tourism is critical to the Batwa people’s livelihood.
Uganda is pushing local tourism to keep the community functioning, and the Batwa people are now conducting tours of Ugandan national parks, which they originally called home. The Batwa people are ideal forest tour guides because they have a thorough understanding of the area.
In addition, Uganda is home to a large gorilla population, which many tourists visit to view in person. The Batwa tour guides introduce guests to this amazing species with respect and caution, having shared the forest with them for years. Such trips, which now cater to even local tourists, provide a memorable “culturally sensitive” visit with proceeds going to those in desperate need.
The Takeaway
It is critical to raise awareness about the Batwa tribe, who live in terrible poverty and may perish in the jungle after centuries. This group has lost their home and livelihood as a result of the modernization of their territory, and they are now facing acute poverty and starvation.
This village could regain hope by supporting their efforts to live through tourism and petitioning the Ugandan government to help displaced people.