World Bank insists Uganda is low income
Government says at least every Ugandan now earns an average of $1,046 per annum. Photo | EDGAR R. BATTE
What you need to know:
According to WB, the $840 (Shs3,159,041) gross national income (GNI) calculation contained in the 19th edition of the Uganda Economic Update (UEU) is based on data from FY2020/2021, which is the same reference period for all member countries included in the current global income classification.
World Bank has stuck to its guns that Uganda is classified as a low income country for global comparability.
World Bank, however, acknowledges that there has been progress in the country to achieve the lower middle income status.
In its July 7 statement on its Approach to Global Income Classification, which the World Bank Group posted on their website, from Washington DC, its officials insist that the World Bank Group has carried out income classifications annually since 1989 to ensure consistency and global comparability.
Middle income: World Bank sticks by its data
According to them, the $840 (Shs3,159,041) gross national income (GNI) calculation contained in the 19th edition of the Uganda Economic Update (UEU) is based on data from FY2020/2021, which is the same reference period for all member countries included in the current global income classification.
“The GNI per capita estimates and the updated operational thresholds are circulated to the World Bank’s board of executive directors for information and all member countries of the World Bank are assigned to these classifications prior to the end of every fiscal year. These income classifications are used to guide the World Bank’s operational lending for the fiscal year,” the World Bank states.
“According to the latest income classification, low-income economies are defined as those with a GNI per capita of $1,085 (Shs4,080,428) or less; and lower-middle income economies are those with a GNI per capita between $1,086 and $4,255. Middle and high-income classifications are also established annually.”
During the State-of-the-Nation Address in June, the President announced that Uganda had attained middle-income status.
While addressing a media briefing last week, Dr Chris Mukiza, the Uganda Bureau of Statistics executive director, said government data for the Financial Year 2021/2022 indicates that Uganda’s GDP per capita is estimated at $1,046 (Shs3,933,758), which is within the middle-income threshold.
On June 30, the World Bank released the 19th edition of its biannual UEU in Kampala. Among the issues reported, Uganda’s GNI per capita was $840 based on fiscal year (FY) 2020/2021 data.
They explained that the calculation of $840 GNI contained in the 19th edition of the UEU is based on data from FY2020/2021, which is the same reference period for all member countries included in the current global income classification. However, during the launch of the Public Policy Executive Oversight Forum (Apex platform) on Wednesday, Mr Museveni questioned the World Bank’s source of information, insisting Uganda had attained middle-income status.
“Our data about our country is that we are now at Gross Domestic Product (GDP) per capita of $1,046 (Shs3.9m) and that is already in the middle income. We need to stay there for three more years or go up to be declared officially,” he said.
The development leaves Uganda middle income status standing at $840 (Shs3,159,041), which is far behind the threshold of the current calculation of the lower-middle income status.
The World Bank Group further explained that the GNI per capita measure used by the World Bank is derived from the sum of the GDP and net income of residents, converted into United States dollars using conversion factors, according to the Atlas method, which the World Bank has used since 1993.
The World Bank’s operational lending policy provides low-income countries access to concessional financing terms, with low to zero interest rates, through the International Development Association (IDA).
Member countries qualify for the World Bank Group for financial assistance in different windows of the bank.
In the statement, the bank officials explained that the World Bank’s income classifications are also used by other development partners for analytical and operational reasons.
The World Bank supports its member countries to accelerate economic growth thereby moving up the income classification ladder. “The World Bank remains committed to supporting Uganda’s development journey within the context of the country’s Vision 2040,” the institution indicated.
