The Ugandan economy is forecasted to continue its climb out of the depths that it hit in 2012 when it recorded a feeble 2.8 percentage growth rate.
The 2014 African Economic Outlook report which was released early this week in the Rwandan capital, Kigali also projects that country is likely to attain a 6.6 percentage growth this year, before it rises to hit the 7 percentage growth mark next year.
This positive outlook heralds brighter investment prospects for both local and regional investors, as the country draws closer to becoming an oil producing economy in 2018.
The main sources of Uganda’s projected growth revolve around the agriculture, services and industry sectors.
The dismal performance of the economy that was witnessed three years ago was largely attributed to that lag effects of the recession in the Western world which, saw contraction in investment and development financing.
Uganda’s regional neighbours, Tanzania, Rwanda and Ethiopia are also expected to attain growth of between 6.5% and 7.5% in 2014/15.
Launching the report, African Development Bank Vice President and chief economist, Professor Mthuli Ncube said African economies had continued to show resilience and they were on a steady footing despite the challenges that lay in the way of the continent’s progress.
Professor Ncube added that as more African countries move to rebase their economies, the real value of Africa’s economy is bound to be higher than what is presently known.
Africa’s known GDP stands at $1.5 trillion but further rebasing of African economies could push it to close to $2.5trillion according to estimates by experts.
Speaking at the same event, former Director General of the World Trade Organization, Pascal Lamy said Africa has shown capacity to leap-frog some of the stages of development that were required in the past.
“Africa can spare itself some of the hardships that other parts of the world had to endure [to achieve economic development].”
He underscored the need for African leaders to work together to spur bilateral trade saying: “Africa has many more eggs in the bilateral trade basket.”
East Africa’s growth is expected to average between 6% and 6.2% in 2014 and 2015 respectively, making it one of the fastest growing regions on the continent.
Growth in East Africa’s largest economy Kenya is projected to grow from 5.7% in 2014 to 5.9% in 2015, largely driven by exports and private investment, and on the supply side, by service sectors including finance and information and communications technology (ICT) and the construction sector.
According to the report, last year, Africa grew by about 4%, on average, compared to 3% for the global economy, although with broad variations across regions and income groupings. Growth in sub-Saharan Africa was 5% in 2013 and is projected to be about 5.8% in 2014.
However, in his opening remarks at the launch of the report, AfDB President Donald Kaberuka said much as the continent was registering impressive growth numbers, he was aware of the fact that people on the continent cannot, “eat economic growth.”
With millions of Africans still living in poverty more will have to be done if the rising growth numbers are to translate into better living standards for the majority of the continent’s inhabitants.
Africa’s trade performance has grown in recent years but the continent’s exports remained dominated by primary commodities, and the strong performance was largely spurred by rising commodity prices.
The report shows that the continent captures a small but growing share of trade in global value chains, with sectors integrating differently. Africa’s share in global trade in value added grew from 1.4% in 1995 to 2.2% in 2011.
African economies will have to ensure that global value chains have a positive impact on socially inclusive development.
The continent’s participation in global value chains is currently limited to lower value activities but opportunities exist for upgrading to higher ones.