World Bank Senior Economist, Richard Walker says a discovery of a vaccine against Covid 19 will help tame the economic decline, but there still remains worry over the high borrowing rates, the possible effects of the general elections and poor budget management.
The World Bank spells a gloomy picture of Uganda’s economy this
year, urging the government to mind its spending plans and increase the
domestic revenue mobilization.
The 16th Uganda Economic Update shows that Uganda’s economy will
contract by 1 percent in the calendar year 2020, down from about 7 percent that
was posted for the year 2019.
The report mainly attributes this to the drastic fall in tourism revenues
especially between March and September when there a ban on international travel
and restrictions on domestic travel as a result of the covid-19 lockdown.
According to the report, the performance of the economy will also be
affected by the decline in remittances that estimated to have fallen by more
than half, while the foreign direct investments for the year dropped from US$
1.25 to US$ 950 million.
With the global economy projected to continue contracting, the
Bank expects that more than 90% of the world’s economies will have experienced
a recession by the end of the year. This will have lagging effects on remittances,
FDIs, tourism and export revenues to countries like Uganda.
The Bank also says Uganda should hope that oil prices continue to
rise so that it encourages oil investors in the industry to make investment
decisions towards the commercial development of oil and gas.
World Bank Senior Economist, Richard Walker says the discovery of a vaccine
against Covid 19 will help tame the economic decline, but they remain worried
over the high borrowing rates, the possible effects of the general elections
and poor budget management.
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The 16th report under the theme: "Investing in Uganda's Youth”
reviews the adequacy of Uganda’s policies on alleviating the plight of the
youth in the country.
The report is of the view that as the government invests in the
human resource capital mainly in health and education sectors, the resources
aimed at immediate creation of jobs should be focused on agriculture and
innovation, saying agriculture is recovering faster.
Tony Thompson, the World Bank Country Manager in Uganda, warns that
Uganda must prudently invest its declining resources to ensure that a balanced
economic growth.
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However, the Chairperson of the Uganda Women Entrepreneurs Association Ltd,
UMEAL, Angela Bageine says the importance of agriculture to the economy is
being affected by the education sector, which has steadily abandoned teaching
it at lower levels.
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While the report hails Uganda’s expansion of the educational
opportunities for the youth, including investing in structures, there is an
immediate need to invest in the quality of education so that the graduates can
be employed.
Diana Sekaggya, the education specialist at the World Bank Office
in Uganda says that even the productivity of those in employment is relatively
low due to the lack of adequate education.
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The National Planning Authority Director for Development Planning, Asuman Guloba
says Uganda’s youth structure is very complex and multiple approaches are
needed to tackle the youth employment and education question.
