Africa-Press – Uganda. Talk of middle income has dominated debate over the years and it remains a dream that government says will become real not long from now.
During the State of Nation Address last week, President Museveni said the number of Ugandans who had moved out of the poverty had increased and congratulated them upon achieving the middle income status.
Data on middle income indicates that by the end of 2023/24 financial year, Uganda’s Gross Domestic Product is projected to grow to Shs207.22 trillion ($55.17b), which translates into $156.76b in purchasing power parity terms.
Therefore, GDP per capita will grow to $1,186 from $1,096.
The growth, President Museveni said has been supported by a huge expansion in the economy, which has expanded from $ 1.5b in 1986 to about $49.4b.
Although the figures above look impressive, there are those who think, Uganda is still far from attaining middle income.
Fred Muhumuza, a Makerere University lecturer and economist, says it is difficult to see how the 2023/24 budget will elevate Uganda into a middle income country.
“The budget is so held up by previous obligations of loans and other statutory spending,” he says and notes that it is also burdened by a weak local resource mobilization, which leaves government with one option of borrowing more and burdening the economy further.
Therefore, he says, it will take commitment yet there is little willingness from government to cut expenditure.
On his part, Mwambutsya Ndebesa, a researcher and historian, says the budget does not address fundamental issues, especially the current drivers of growth, which include technology and ICT.
“If I were the one heading government, my measurement for progress and development in the 21th century would be the status of our knowledge and technological transfer rather than dwelling on middle-income,” he says.
In the knowledge age, Ndebesa says, knowledge acquisition and ICT would be a key yardstick for measuring growth, noting that since little has been allocated for this purpose, it is difficult to see how Uganda plans to take advantage of such a high value sector that is currently driving economies across the globe.
Beyond this, he says, the economic benefits of research and development are significant, yet government seems to attach little value because it would be allocating huge sums of money towards research.
However, Dr Adam Mugume, the Bank of Uganda executive director research, says that even if Uganda reaches the threshold for middle income next year, it must be maintained for some years before the country is declared a middle income country.
“To achieve lower middle income status, we must attaining GNI per capita of $1,036 sustainably. We are estimated to have achieved this in this financial year [but] it must be maintained the next financial year, then we shall be re-classified as having achieved lower middle-income status,” he says.
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