Uganda’s Economy Grows by 5.5% in Q4

Uganda’s Economy Grows by 5.5% in Q4

Uganda’s economy advanced by 5.5% over a year ago in the fourth quarter of 2023, following a 5.3% rise in the previous three-month period.

The growth in gross domestic product (gdp) was the strongest growth rate since the third quarter of 2022, mainly driven by the industrial sector. The statistics office data showed that the sector surged by 6.8% versus 11.9% in Q3-2023.

Strong performance in mining & quarrying (+165.4% vs +141.6%), and construction (+43.3% vs +1.5%) more than offset a 1% drop in manufacturing. On a seasonally adjusted quarterly basis, the real GDP rose by 0.5%, compared to the downwardly revised 1% growth in Q3.

Fitch Ratings affirmed Uganda’s credit ratings at ‘B+’ with a negative outlook earlier in March.

The global ratings agency said Uganda’s ratings are underpinned by favourable medium-term growth prospects, a record of relative macroeconomic stability supported by a central bank that operates independently under an inflation targeting framework.

Fitch said its expectation is that real GDP growth and planned fiscal consolidation would contribute to stabilizing government debt/GDP.

Uganda’s rating was constrained by a low level of GDP per capita, weak governance, a low government revenue base and twin budget and current account deficits (CAD) higher than peers.

It added that negative outlook reflects external financing and liquidity pressures related to reduce availability of concessional external financing and grants.  Naira Suffers Big, CBN Goes Ballistic Against FX Whales

Downside risks to fiscal adjustment owing to public financial management shortfalls, notably in revenue collection, will exacerbate financing and liquidity pressures due to high government interest payments and rising external debt service amid tight financing conditions, and a weak reserve position.