What IMF figures on GPD growth in the world tell us about Uganda’s economic performance over time
THE LAST WORD | ANDREW M. MWENDA | Recently I wrote to the International Monetary Fund (IMF) to find out how Uganda’s economy has been performing over the last five years compared to other nations of the world and particularly within Sub Sahara Africa. Over the last five calendar years (2016-2020) Uganda’s economy grew at an annual average rate of 4%. This makes it the 27th fastest growing economy in the world, 14th in SS Africa. For a country perceived to have once been one of the fastest growing economies in Africa and the world, these results were disappointing but also illuminating.
Looking at the top line, I rushed to conclude that the management of our economy has declined. Like most people, I needed a villain to blame and President Yoweri Museveni was an easy target. I thought that as he has grown old, the speed of his decision making has significantly reduced. My evidence is that delays in making decisions on vital public sector investments in such areas as the Standard Gauge Railways, the Kampala-Jinja Expressway, Ayago Dam, the Umeme concession, oil production etc. I also felt age may have significantly compromised the quality of his decisions thereby negatively impacting the economy.
But one lesson I have learnt over the years is to interrogate my own assumptions by looking closely at data. When I did this, I realised that in 2016, which was an election year, our growth fell to 0.35%. But it bounced back to 6.26% in 2017, 6.14% in 2018 and 6.66% in 2019. In 2020, the growth rate fell to 0.28% due to COVID19. Therefore, when we remove the instability of the 2016 elections and the effects of COVID19, Uganda’s average growth for 2017, 2018 and 2019 is 6.7% which is great by global historical and contemporary performance. When we remove the distortions of the 2016 election and COVID19 from the sample, Uganda becomes the 8th fastest growing economy in Africa.
Again, I felt at 8th position, Uganda, which used to be a “star performer” in Africa, has lost its shine. But again, we needed to interrogate this assumption. Therefore, we looked at Uganda’s performance in the early years of the Museveni presidency when it is assumed the speed and quality of his decisions were very good. We actually found that in the first five years of his presidency (1986-90), Uganda was the 40th fastest growing economy in the world, 10th in Africa. Therefore, the claim of being best in Africa is a myth.
Looking at the data closely, we found that in the first ten years of the Museveni presidency (1986-95) it was the 28th in the World, 5th in Africa. In the first 15 years (1986-2000) it was 23rd in the world, 7th in Africa. In the first 20 years (1986-2005) it was 18th in the world, 5th in Africa. In the first 25 years (1986-2010) it was 14th in the world and 4th in Africa. Over the last 35 years, Uganda’s economy has grown at an annual average rate of 6% making it the 11th fastest growing in the world, 4th in Africa behind Equatorial Guinea, Ethiopia and Mozambique.
The take away from this data is that Museveni’s Uganda has never had a fast growth sprint i.e. a short period of rapid growth lasting say five or seven years when it topped the charts in the world or Africa. On the contrary, our growth has always been fairly good but not (as) rapid. The critical aspect is that it has been sustained over a very long period of time i.e. 35 years. That is why the longer the time-duration studied, the better the performance of Uganda in the global and Sub Sahara Africa league tables.