Uganda’s economy has fully recovered from various shocks, Matia Kasaija, the Minister Of Finance, Planning And Economic Development, has said.
He made the remarks during a meeting on The Budget Strategy For Financial Year 2025/2026 held at Speke Resort And Convention Center – Munyonyo, on Wednesday.
“In the last quarter of FY 2023/24, GDP growth was recorded at 6.7% and at the end of the financial year, it grew at 6% up from an average of 4.1% for the period FY2019/20 to FY2022/23….you will recall that the growth rate of GDP had reduced to 3.0% in FY2019/20, having fallen from 6.4% in FY2018/19 due to the effects of COVID-19,” said Kasaija, adding: “Uganda’s economy has strongly recovered and remains buoyant. In nominal terms, the size of the economy increased from Shs. 183 trillion (US$48.8 billion) registered in FY 2022/23 to about Shs. 202.13 trillion (US$ 53.2 billion) in FY 2023/24.”
He added that in March 2024, Uganda met the requirements to graduate from the category of Least Developed Countries (LDCs). Uganda also moved from the category of low human development to medium human development.
“This is a result of consistent improvement in health, education, economy, and a decent standard of living. This is a big milestone achieved well before the country starts earning from oil exports. When oil and gas start to flow, in FY2025/26, with deliberate value addition to our raw materials, and productive utilisation of the PDM and other wealth creations initiatives, attainment of prosperity for all and socio-economic transformation will be faster,” he said.
Interest Rates
Kasaija says interest rates have remained broadly stable, with the Central Bank Rate reducing by 250 basis points to 10%. “Commercial bank lending rates for Shilling denominated credit averaged at 17.89% for the year ending June 2024, down from the 18.56% average recorded in FY 2022/23,” said Kasaija, adding: “This decline was partly due to a reduction in risk aversiveness of commercial banks following continued improvement in economic activity.”
He adds that the shilling has remained relatively stable, for example, appreciating against the US Dollar by 1.1% in July 2024 despite other previous depreciation pressures at the beginning of this year. “All the currencies of the EAC Partner States depreciated against the US Dollar in July 2024, except for the Ugandan Shilling. The Tanzanian and Kenyan Shillings depreciated by 1.2% and 0.5% respectively, while the Rwandan and Burundian Francs weakened by 0.5% and 0.2% respectively,” he said.
Inflation has been contained within the target rate of 5%, having been recorded at 3.5% in August 2024.
