By Staff Writer | The Exchange
The size of Uganda’s economy expanded by Shs163.280 billion in the first quarter of 2016/17 financial year supported despite slowdown in GDP growth rate.
Newly released statistics by Uganda Bureau of Statistics (Ubos) indicates that the quarterly GDP at current prices for the first quarter 2016/17 is estimated to have grown by approximately Shs52 billion from Shs21.528 billion estimated for quarter four of 2015/16.
Uganda remains predominately an agriculture country despite the underdevelopment in agricultural sector and its subsequent decline in its share contribution to the total GDP in the last 10 years.
Giving highlights on Uganda’s economic growth performance, director macroeconomic statistics at Uganda Bureau of Statistics recently, Dr Chris N. Mukiza said: “The share of value added in the agriculture sector grew to 23.7 per cent, whereas that of industry sector dropped to 19.4 per cent and services declined to 48.8 per cent during the first quarter of 2016/17.”
In terms of the total value (size) of Uganda’s GDP at market prices Dr Mukiza said it was Shs14.027 trillion in first quarter down from Shs14.049 trillion in the fourth quarter of 2015/16.
However, it when comes to quarterly GDP growth computed statistics shows that Uganda’s economic growth rate for 2016/17 shrunk by 0.2 per cent compared to 0.6 per cent registered in the fourth quarter of 2015/16.
The decline in Uganda’s economic growth in the first quarter is attributed to poor performance in some key sectors of the economy, which registered contraction during the period.
Dr Mukiza said the decline in real GPD is largely from contraction in agriculture where its value added is estimated to have declined by 1.1 per cent in the first quarter of 2016/17, following the earlier decline by 1.0 per cent in the previous quarter four of 2015/16 financial year.
“The contraction is attributed to declining value added in cash crop and food crop growing activities; for instance, cash crops declined by 5.5 per cent and food crop declined by 0.8 per cent from earlier decline by 1.3 per cent in quarter four of 2015/16,” he said.
Dr Mukiza added: “Other activities that declined are forestry, fishing, livestock activities, and agricultural support services.”
However, Dr Mukiza said the service sector value added remained stable at Shs7.239 trillion in the first quarter of 2016/17, similar to the value added registered in quarter four of 2015/16.
He explained that this was because of the increase in value added of trade and repairs, information and communication, real estate, education, human health and social work, transportation and shortage and accommodation was offset by a reduction in value added in public administration and finance and insurance services.
In the value added industrial sector, he said the sector grew by 1.3 per cent in the first quarter of 2016/17 from the 2.7 per cent decline in quarter four of 2015/16.
“The main driver to this growth were construction which grew by 9.2 per cent, electricity by 2.3 per cent water grew by 2.0 per cent and mining and quarrying activities by 0.9 per cent. However value added of manufacturing activities declined by 4.6 per cent on account of poor performance of cash crop and food crops that resulted in a decline in agro processing industries,” he said.
Uganda’s overall economic outlook in terms of growth remains largely unchanged from the earlier projections. The International Monetary Fund projects that the real GDP growth rate forecast will be around 5 per cent for 2016/17, 5.5 per cent for 2017/18, and 6.0 per cent for 2018/19.