Uganda to attain middle income status by 2020

A lady counts money in her wallet. Middle income people are expected to be better money managers. FILE PHOTO

What you need to know:

Funding. The country needs about Shs185 trillion to attain the status


In the next five years, Uganda will have attained a middle income status, the board chairperson of the National Planning Authority, Mr Kisambwa Mugerwa, believes.

According to the planning body, by 2020 when the second phase of the National Development Plan comes to an end, per capita income is expected to be in the range of $1,033 (nearly Shs3 million).
World Bank ranks middle income countries as those whose income per person averages between $1,036 and $12,615.

But for that to seamless happen (transform into middle income country), the economy must be able to generate at least Shs120 trillion to fund the entire budget which already a section of economic analysts and private sector players describe as ambitious proposals.

“We hope by 2020 we would have achieved lower segment of a middle income country,” Mr Mugerwa said on Monday in an engagement with the media fraternity.

He continued: “We are looking at reducing production costs and making the country competitive. We want to tackle the issue of power and ensure that we have a faster mode of transport—train to transport goods and raw materials around

In his presentation, the National Development Authority director for development planning, Mr Patrick Birungi, said the focus of the second phase of the national planning document revolves around harnessing potentials that flourish in sectors such as; agriculture, mineral, oil and gas and tourism.
Also, emphasis will be put in skills development, health sector, let alone taking advantages of what ICT sector presents.

The NPA executive director, Mr Joseph Muvawala, revealed in the meeting with the media that the five-year plan will require Shs185 trillion funding, with at least 43 per cent of which is expected to be contributed by the private sector.

Mr Lawrence Bategeka, a development and economics analyst, said the budget is ambitious given that the annual national Budget is no more than Shs15 trillion.

He said: “Unless that money is going to be borrowed, in which case it will be increasing our debt burden, I think that is an ambitious budget.”

He, however, thinks that the middle income status could be achieved but only if challenges making the cost of business high have been dealt with. This will allow private sector to attract investment and huge capital.

Kampala City Traders Association chairman Everest Kayondo described the idea as a dream, saying the government wants to “milk where it has not provided pasture”.

He said: “How do you expect the private sector to play a role yet the infrastructure such as roads, railway and air transport are not developed at all?” He continued: “How do you hope to improve tourism yet you do not have a national carrier (airline).”

about NDP’s function
The NDP emphasises wealth creation and sustainability at the household level, something the donors say should be the function of good macroeconomics. For this reason, they are yet to embrace the NDP fully.

NDPI is coming to an end in June 2015 and NDPII will set the agenda for the next five years.
NDPII was expected to be in place by September 2014 – to inform Budget processes for 2015/16.