The Uganda Government had set 2020 as the year for the country to attain a lower middle income status.
World Bank ranks middle income countries as those whose per capita income (annual earnings per person) averages between US$1,036 and US$12,615. This means Uganda is battling to attain a Lower Middle Income status (US$1,036).
Per capita income is the total Gross Domestic Product (GDP) of a country divided by the total population.
It gives an indication of the average earnings per person in a year.
Recently, David Bahati, the Minister of State for Planning has assured Ugandans that the country will attain Middle Income Status by the end of 2020 but analysts think otherwise.
“We are making massive progress we hope and believe we would have attained middle income by end of this year. So far, we are at USD878 per capita and middle income status requires USD1039 per capita income, so we think (by the time) we get the reviews, we would have hit it by the end of this year,” Bahati said while appearing before Parliament’s Budget Committee to present the 2020/2021 national budget framework paper.
Late last year, Minister of Finance, Planning and Economic Development, Matia Kasaija said Uganda’s economy is growing although some regions in the country are not growing.
“There are some areas where poverty is still biting hard despite (the fact that) some parts have already achieved middle income status,” Kasaija said without disclosing the regions.
However, Ramathan Ggoobi, a policy analyst and economics lecturer at Makerere University Business School says there are only seven districts in Uganda (out of 127) whose per capital income is above US$1,039, the threshold set for lower middle income status.
These are: Kampala US$3,400 (Shs12.4m), Wakiso US$2,496 (Shs9.17m), Mukono US$1,654 (Shs6.07m), Mpigi US$1,624 (Shs5.96m), Mbarara US$1,311 (Shs4.8m), Jinja US$1,199 (Shs4.4m) and Masaka US$1,051 (Shs3.86m).
This isn’t surprising because 80% of Uganda Revenue Authority’s tax revenue is generated from Kampala District alone which is less than 20% of the country’s total population.
This is because much of the identifiable taxable economic activities are resident here.
This inadvertently illustrates how terribly Uganda’s economy is skewed. This means there’s limited economic activity in larger part of Uganda.
Whereas per capita income in Kampala is as high as US$3,400 (Shs12.4m), that of Katakwi is as low as US$94 (Shs234,000).
