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- GDP (PPP):
- $54.6 billion
- 6.0% growth
- 5.1% 5-year compound annual growth
- $1,484 per capita
- Inflation (CPI):
- FDI Inflow:
Uganda’s economic freedom score is 59.7, making its economy the 92nd freest in the 2015 Index. Its score has decreased by 0.2 point since last year, with improvements in half of the 10 economic freedoms, including monetary freedom and freedom from corruption, outweighed by declines in fiscal freedom and property rights. Uganda is ranked 9th out of 46 countries in the Sub-Saharan Africa region, and its overall score is below the world average.
Once a model for reform and a favored investment destination, Uganda has recorded a decline of 2.0 points in economic freedom over the past five years as the momentum for reform has slowed. This diminishment has occurred in six of the 10 economic freedoms, including a 20-point decline in financial freedom. A 15-point improvement in the investment regime is one bright spot.
Uganda has mostly recovered from its past civil and political unrest, but moderate reforms have not been enough to put the economy on the path to sustainable growth. The executive exerts serious influence on the judiciary, and foreign aid has been frozen in recent years due to corruption allegations. The business environment impedes the formation of new businesses, and most of the largely impoverished and agricultural population works in the informal sector.
President Yoweri Museveni, who seized power in a military coup in 1986, was elected to a fourth term in 2011. Museveni has been accused of aiding rebels in the Democratic Republic of Congo. Limited market reforms have produced more than a decade of relatively strong economic growth. Uganda has substantial natural resources, including copper, gold, and newly discovered oil. Infrastructure projects in the transport and energy sectors have increased domestic demand and stimulated growth. Instability in South Sudan, Uganda’s main export partner, threatens to destabilize the economy. Uganda continues to play an important role in peacekeeping operations in Somalia and in the fight against terrorism.
Uganda has laws and institutions tasked with combating corruption, but enforcement is very weak. In 2013, government harassment of anti-corruption activists increased, and the Constitutional Court suspended the Anti-Corruption Court. The rule of law is weak. Land disputes in northern Uganda escalated in 2014, often due to the absence of title deeds in areas where customary tenure is still common.
Uganda’s top individual income tax rate has increased from 30 percent to 40 percent. The top corporate tax rate is 30 percent. Other taxes include a value-added tax and a property tax. Overall tax revenues equal 13.1 percent of the domestic economy. Government expenditures are equivalent to 19.1 percent of domestic production, and public debt equals 36 percent of GDP.
The overall regulatory framework has undergone a series of reforms, but the pace of reform has slowed. Despite some progress, the labor market lacks dynamism because of lingering rigidities. A large informal sector persists. Inflation was low in 2014, with monetary stability relatively well maintained, and the government embarked on a four-year project to improve the targeting of electricity subsidies.
Uganda’s average tariff rate is 6.7 percent. Importing goods can be time-consuming. The Uganda Investment Authority has implemented a one-stop shop to facilitate foreign direct investment. The small financial markets are dominated by commercial banks and regulated by the central bank. The economy is still largely cash-based, and the limited availability of financing options precludes more vibrant private-sector development.