ECONOMIC GROWTH

The highest economic growth during NDP1 period was achieved in 2010/11, the first year of the national development plan at 9.7 percent compared to the target of 6.6 percent that year. This performance was not sustained and was followed by a deceleration to 4.4 percent in 2011/12 and further deceleration to 3.3 in 2012/13. However the last two years of the NDPI were marked by acceleration in the economy to 4.8 and 5.0 in 2013/14 and 2014/15 respectively. This  growth nonetheless fell short of the NDPI targets of 7.4 in 2013/14 and 7.5 in 2014/15 due to; the unfavourable global economic environment leading to the depreciation in value of the Uganda shilling; and political instability in the neighbouring countries who are our major trading partners  among others.EGR1

Major Constraints

  • Insecurity in some of the key export destinations such as South Sudan, DRC and Somalia thereby hampering access to regional markets.
  • Worsening external economic environment leading to exchange rate depreciation.
  • Limited value-addition and low investment in the industrial and agricultural sectorsGPS1

Sources of Growth

The NDP primary growth sectors contributed the highest growth in 2014/15 that is; food crops (16%) and manufacturing (14%). Other significant sources of growth outside the primary growth sectors included: administrative and support service activities (10%); education (8%); public administration (8%); financial and insurance activities (6%) and real estate activities (6%). Among the weak performers in the primary growth sectors was information and communication whose contribution to GDP growth was just 2% yet it had been 20% in 2013/14 representing a significant decline.  In addition the contribution of construction activities to growth declined from 8% in 2013/14 to just 2%.SoG1