世界銀行-烏干達(dá)經(jīng)濟(jì)更新2023年12月：更有效、高效和公平的教育公共支出將幫助烏干達(dá)實(shí)現(xiàn)其潛力（英）

PublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorized

WORLDBANKGROUP

DA

OMIC

UGAN

ECON

UPDATE

MoreEffective,Efficient&Equitable

publicspendingforEducationwill

helpugandarealizeitspotential.

22ndEdition

December2023

UgandaEconomicUpdate|December,2023

?2023InternationalBankforReconstructionandDevelopment/InternationalDevelopmentAssociation.

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UgandaEconomicUpdate|December,2023

Contents

AcronymmsandAbbreviations v

Foreword vi

Acknowledgements vii

ExecutiveSummary viii

PART1StateoftheEconomy

12

1.1RecentEconomicDevelopments

14

Globaleconomicgrowthisprojectedtoremainweakin2023duetothelingeringeffectsofmultiplecrises

14

Growthhasbeenbroad-based,withrisingoutputintheagricultural,industrial,andservicesectors

14

MonetaryconditionsinUgandahaveeasedinlinewithglobaldevelopments

17

Challengesaroundrevenuecollectionthreatenthefiscalconsolidation

17

Thecurrentaccountremainedstableashigherexportrevenuesoffsetasurgeinimports

19

1.2EconomicOutlook,Risks,andPolicyActions

21

Economicresilienceunderpinnedbytheprospectsoftheoilsector

21

1.3SummaryandRecommendations

23

PART2AssessingtheQuality,Efficiency,andEffectivenessofPublicSpendinginEducation

24

2.1StructureandGovernance

28

2.2KeyEducationOutcomes

30

2.3AnalysisofPublicSpendingonEducation

33

2.3.1Adequacy

33

2.3.2Efficiency

37

2.3.3Equity

40

2.4Recommendations

45

References

47

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UgandaEconomicUpdate|December,2023

ListofFigures

Figure1:Growthremainedrelativelystrongdespiteadverseweatherconditionsandweakminingoutput

15

Figure2:ThePMIhasimprovedsince2022

17

Figure3:Lowergoodspricesdrovethedeclineincoreinflation

17

Figure4:Theongoingfiscalconsolidationisnarrowingthedeficit

17

Figure5:TheUgandanshillingappreciatedsubstantiallyduringFY2023

19

Figure7:ImportcoveragefellduringFY2023

20

Figure6:Privateinflowsandgovernmentborrowingfinancedthecurrent-accountdeficit

20

Figure8:TheStructureandOrganizationoftheUganda′sFormalEducationSystem

28

Figure9.GrossEnrollmentRates,2019(%)

30

Figure10.EarlyGradeReadingAssessmentResultsbyLocalLanguage,2022

31

Figure11.PublicSpendingonEducationasaShareofGDP,2018orLatestAvailableYear

33

Figure13.PublicEducationSpendingperStudentasaShareofGDPperCapita,LatestAvailableYear

33

Figure12.PublicSpendingonEducationasaShareofTotalGovernmentSpending,2018orLatestAvailableYear

33

Figure14.PublicSpendingbyEducationLevel

34

Figure15.PublicSpendingperStudentbyEducationLevel,2010/11–2021/22

34

Figure16.RatioofTeacherSalariestoEarningsofSimilarlyEducatedWorkersbyHighestDegreeCompletedandAge

Group,2019/20

35

Figure17.RatioofTeacherSalariestoEarningsofUniversityEducatedWorkersbyLevelofInstruction,2019/20(25-64

YearsOld)

35

Figure18.CompositionofHouseholdSpendingonEducationbyLevelofEducationandTypeofSchool,2019/20

36

Figure19.LearningAdjustedYearsofSchoolbyGDPperCapitaandEducationSpending,2020

37

Figure20.NumberofStudentsperTeacherandTotalNumberofStudentsinGovernment-FundedPrimarySchoolsbyDis-

trict,2020/21

38

Figure21.NumberofStudentsperTeacherandTotalNumberofStudentsinGovernment-FundedSecondarySchoolsby

District,2020/21

38

Figure23.SchoolAttendanceandPovertyRatesbySubregion,2019/20

41

Figure22.LorenzCurveofEducationSpendinginUganda,2019/20

41

Figure24.LearningPovertyinPrimaryEducationandPovertyLevelbySubregions,2018/2019

42

Figure25.Per-StudentUPEGrantsandPovertyRatesbySubregion,2020/21

43

Figure26.Per-StudentUSEGrantsandPovertyRatesbySubregion,2020/21

43

Figure27.LearningPovertyinLiteracyandStudent-TeacherRatios,PrimaryEducation,2020

44

Figure28.LearningPovertyandper-StudentUPETransfers,PrimaryEducation,2020/21

44

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UgandaEconomicUpdate|December,2023

ListofTables

Table1:QuarterlyRealGDPGrowth(%)

16

Table2.KeyFiscalIndicators(%ofGDP)

18

Table3.BaselineEconomicOutlook(annual%changeunlessotherwiseindicated)

21

Table4.DistributionofSchoolAttendancebyEducationLevelandSchoolType,2019/20(%)

29

Table5.DistributionofReasonsCitedforLeavingPrimaryEducationbyGradeandGender,2019/20(%)

31

Table7.NetAttendanceRatebyPopulationGroup,2019/20

40

AcronymmsandAbbreviations

BOU

BankofUganda

BTVET

Business,TechnicalandVocationalEducationandTraining

CFR

CharterofFiscalResponsibility

DSA

DebtSustainabilityAnalysis

ECF

ExtendedCreditFacility

EMIS

EducationManagementInformationSystem

FDI

ForeignDirectInvestment

FY

FiscalYear

GDP

GrossDomesticProduct

GoU

GovernmentofUganda

IGFTR

IntergovernmentalFiscalTransferReforms

IMF

InternationalMonetaryFund

LAYS

LearningAdjustedYearsofSchooling

MoES

MinistryofEducationandSports

MoFPED

MinistryofFinance,Planning,andEconomicDevelopment

NDPIII

ThirdNationalDevelopmentPlan

PLE

PrimaryLearningExamination

RTI

ResearchTriangleInstitute

SPA

SchoolPerformanceAssessment

STEM

Science,Technology,EngineeringandMathematics

STR

StudentTeacherRatio

UBOS

UgandaBureauofStatistics

UgIFT

UgandaIntergovernmentalFiscalTransferReformProgram

UGX

UgandanShilling

UPE

UniversalPrimaryEducation

USE

UniversalSecondaryEducation

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UgandaEconomicUpdate|December,2023

Foreword

TheUgandaneconomycontinuestorecoverfrommultipleshocksandachallengingglobalenvironment.Economicactivityhasbeenrobustduetostrongindustrialactivityandimprovedperformanceoftheservicessector.Althoughagriculturalproductionwasaffectedbyadverseweatherconditions,thesectorrecordedstronggrowth.SpilloversfromthewarinUkraineledtohigherfoodandfuelpricesthatbroadenedacrossothergoodsandservices,contributingtoasurgeininflationinthesecondhalfof2022.InflationbegantodecelerateinFebruary2023andhassinceremainedbelowtheBankofUganda’stargetrateof5percentduetoitspolicyactions.Notwithstandingtheresilienceoftheeconomy,thecountry’sgrowthtrajectoryisfragile.RecentglobalmarketturmoilandpotentialspilloversfromtheconflictinSudanposenewpolicychallenges.

Ugandawillsoonenterapivotalstageinitsdevelopmentpathwherehumancapital–theknowledge,skills,andhealththatpeopleaccumulatethroughouttheirlives–hasthepotentialtobeacentraldriverofthecountry’sprogress.YetevenasUganda’spopulationisprojectedtoincreaseby60percentinthenext20years,thecountryhasbeenunderinvestinginitshumancapital.TheWorldBankestimatesthatatcurrentlevelsofinvestmentinhumancapital,achildborninUgandatodaywillgrowuptobeonly38percentasproductiveasheorshecouldbewithcompleteeducationandfullhealth.ForUgandatobenefitfromademographicdividend,thecountrywillneednotonlysubstantialresourcestoservealargerpopulation,butitmustfurtherelevateitsinvestmentsinsocialservicestoimprovethecurrentpoorlevelsofaccessandquality.Inaddition,providingequalaccesstohumancapitaldevelopmentiskeytoaddressingtheinequalityofopportunitiesandmakingfuturegrowthmoreinclusive.

This22ndeditionoftheUgandaEconomicUpdatefocusesonacriticalcomponentofUganda’shumancapitaldevelopment:thequality,efficiency,andeffectivenessofpublicspendingoneducation.SpendingoneducationhasbeenconsistentlylowandinefficientinUganda,contributingtoinadequateandinequitableaccessaswellaspoorlearningoutcomes.Althoughthescaleofthechallengemayseemdaunting,Ugandahasmanyachievementstobuildon:oneofthefirstcountriestoembracetheideaofuniversalprimaryeducation;aleaderinemployer-ledskillsdevelopment;andaworldleaderinitsgenerositytowardrefugees,includingintheirhumandevelopment.TheWorldBankisreadytosupportUganda’seffortstoseizethiscriticalandtime-boundopportunitybyinvestingmore,investingsmarter,andinvestingnowinthefutureproductivityofitspeople.

KeithHansen

CountryDirector

Kenya,Rwanda,Somalia,andUganda

AfricaRegion

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UgandaEconomicUpdate|December,2023

Acknowledgements

TheUgandaEconomicUpdate(UEU)analyseseconomicandstructuralissuesintheUgandaneconomyandsituatestheminalong-termdomesticandglobalcontext.Itisintendedforawideaudience,includingpolicymakers,businessleaders,financial-marketparticipants,thinktanks,non-governmentalorganizations,andthecommunityofanalystsandprofessionalsengagedintheUgandaneconomy.Thepublicationintendstofosterwell-informedpolicyanalysisanddebateregardingthekeychallengesfacingUgandaasitstrivestoachieveinclusiveandsustainableeconomicgrowth.

This22ndeditionoftheUEUwaspreparedbyateamthatincludedSashanaWhyte,RachelK.Sebudde,ShawnPowers,AzizAtamanov,andDanielLukwago(consultant).TheteamisgratefultoPhilipSchuler,MarekHanusch,TamoyaChristie,andShinsakuNomurafortheirinputandguidanceonthestructureandmessagespresentedinthereport.TheUEU22waseditedbySeanLothrop.PearlNamanyaprovidedlogisticalsupport,whileBernardTabairemanagedthecommunicationsstrategyandKarinaAcevedoprovidedinvaluableresearchassistanceontheanalysisofeducationexpenditures.TheUgandaCountryTeamprovidedvaluablefeedback,andtheoverallguidanceprovidedbyAbhaPrasad(PracticeManager,Macroeconomics,TradeandInvestment)andMukamiKairuki(CountryManager)isgratefullyacknowledged.Finally,theteamwouldliketothankthestaffoftheMinistryofFinance,Planning,andEconomicDevelopmentandtheMinistryofEducationandSportsfortheircommitmentandproductivecollaboration.

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UgandaEconomicUpdate|December,2023

ExecutiveSummary

Uganda’seconomycontinueditsrecoveryfrommultipleexternalshocks,despiteaturbulentglobalenvironment.

Uganda’srealGDPgrowthraterosefrom4.6percentinFY2022to5.2percentinFY20231,butdomesticchallengespersist,andexternalconditionsremainchallenging.TheservicessectoraccountedforhalfofGDPgrowth,ledbyprofessionalservices,administrativeservices,andaccommodationandfoodservices.Agriculturaloutputalsoroseby4.8percentduringtheperiod,drivenbylivestockandfishing,whileirregularrainfallcontinuedtoadverselyaffectcropproduction.Growthintheindustrialsectorslowedto3.5percentduetodecliningminingandquarryingactivity.High-frequencyindicatorssuggesteconomicactivitywillremainsolidthroughtheendofthecalendaryear.

Tightermonetarypolicieshavehelpedeaseinflationarypressure.Influencedbothbyglobalanddomesticfactors2,headlineinflationrosefrom3.7percentinFY2022to8.8percentinFY2023,wellabovethecentralbank’stargetrateof5percent.Risingpricesfornonfoodgoodscontributed46percenttothetotalincreaseininflationinFY2023,astheshockoftheexternalcrisescompoundedtheeffectsofadverseweatherconditions,whilefood,energy,fuel,andutilitypricesalsoincreasedsubstantiallyduringtheyear.TheinflationratebegantodeclineinFebruary2023andreached2.6percentinNovember.Inflationisexpectedtocontinueeasingduetosofteninginternationalcommodityprices,especiallyforenergy,asexternalshocksabate,andsupply-chaindisruptionsunwind.TherelativestabilityoftheUgandanshillingalsocontributedtodisinflation.

Strongandsustainedinflowsofforeigndirectinvestment(FDI)helpedfinancealargecurrent-accountdeficitof7.9percentofGDP.Thecurrent-accountdeficit(includinggrants)remainedbroadlyunchangedfromFY2022,asasurgeinimportsoffsettherecoveryofgoodsexportsandtourisminflows.Driven

bytheresumptionofgoldexportsandamarginalrecoveryintravelinflows,exportsincreasedby2.7percentagepointsofGDP.Althoughspendingonimportsfellby8.3percent,theshilling’srealdepreciationduringthesecondhalfoftheyearcausedimportcoststoriseby2.4percentagepointsofGDP,offsettingthesizablegrowthofexports.Thecurrent-accountdeficitwasfinancedmainlythroughFDIintheoilandgassectorandtoalesserextentbypublic-sectorborrowing.

Monetarytighteningslowedthegrowthofcredittotheprivatesector.Afterexpandingby8.9percentinFY2022,private-sectorcreditgrowthdeclinedto3.0percentinFY2023.Slowingcreditgrowthprimarilyreflectedtherisingcostofcredit,asthecentralbankraisedratestomanageinflationarypressures.Whilelendingtothepublicsectorriskscrowdingoutprivate-sectorcreditandslowingeconomicgrowth,personalloansandcommerciallendingtothetransport,trade,andminingandquarryingsectorscontinuedtoincreaseinFY2023.

Thecentralgovernment’sfiscaldeficitreached5.6percentofGDPinFY2023,downfrom7.4percentinthepreviousfiscalyear.Totalcentral-governmentrevenueroseto14.2percentofGDP,albeitwellshortofthepolicytargetof16-18percent.3Improvedtaxadministrationpushedtaxrevenuefrom13.4percentofGDPto13.7percent,withincreasedcollectionsofpay-as-you-earntax,taxesonrentalincome,andcasinotaxesoffsettingadeclineinrevenuefromcorporateincometaxandwithholdingtax.Meanwhile,totalspendingfellfrom21.5percentofGDPto19.9percent.Developmentspending,muchofwhichremainsfocusedonmegaprojects,fellfrom7.9percentofGDPto5.8percent.Whilepartofthisdeclinewasplannedaspartofthefiscalconsolidationagenda,developmentspendingwasalsoundercutbyexecutionchallengesbothindomesticallyandexternallyfinancedprojects.

1ThefiscalyearinUgandarunsfromJulytoJune.

2Adverseweatherconditions,highenergyandfoodpricesandsupplyconstraints

3ThistargetisdefinedintheDomesticRevenueMobilizationStrategy.

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UgandaEconomicUpdate|December,2023

AladypourspeasforsaleintoabasketinNakaseroMarket.DerrickSenyonyi,2023.

Outlook,Risks,andChallenges

Themedium-termoutlookremainsbroadlypositive.Medium-termgrowthprospectshingeontheanticipateddevelopmentoftheoilandgassector,whichisexpectedtopushtheannualGDPgrowthratetowellabove6percentinthemediumterm.Thecontinuedimplementationofgovernanceandproduct-marketreformsdesignedtoboostagri-business,encouragetrade,andfosterprivateinvestmentisalsoexpectedtocontributetomedium-termgrowth.TheimplementationoftheDomesticRevenueMobilizationStrategy—particularlythereformstotaxexpendituresandvalue-addedtaxes—willsupportfiscalconsolidationontherevenueside.Meanwhile,fiscalspendingaimedateasingconstraintsongrowth,includinginvestmentsinenergyandtransportinfrastructure,shouldhelpreviveprivateinvestment,boostagriculturalproduction,andenergizethelightmanufacturingsector.

Riskstothemedium-termoutlookaresubstantial.Keyrisksincludeafurtherdeteriorationofglobaleconomicconditionsduetointensifyinggeopoliticaltensions,anescalationoftheconflictintheMiddleEast,slower-than-expectedgrowthinChina,aslowdownineconomicactivityintheUnitedStates,and/orarenewedriseincommodityprices.ExternaleconomicshockscouldnecessitateareturntomonetarypolicytighteninginUganda,whichwouldslowtherecoveryofbusinessactivityandhouseholdincome.Inaddition,weather-relatedshockscouldfurtherdepressagriculturaloutputanddisruptthemobilityofgoodsandpeople.Domesticpolicyrisksincludetheslow

orincompleteimplementationofstructuralreformsinkeyareassuchasprivate-sectordevelopmentandclimate-changeadaptationintheagriculturalandtourismsectors.Ontheupside,rapiddisinflationinadvancedeconomiescouldleadtoloosermonetarypolicies,easingfinancialconstraintsinglobalmarkets.

AssessingtheQuality,Efficiency,andEffectivenessofPublicSpendinginEducation

Withayoungandgrowingpopulation,Ugandahasaone-timeopportunitytocaptureademographicdividend,butsuccessisnotguaranteed.Asimprovingeconomic,health,andsocialconditionslowerfirstmortalityratesandthenfertilityrates,countriespassthroughabriefwindowinwhichthesizeoftheworking-agepopulation(ages15-64)farexceedsthedependentpopulationofchildrenandtheelderly.Duringthisdemographictransition,acountrycanleverageitschangingagestructuretoaccelerategrowth,butonlyifitsworkersareablerealizetheirproductivepotential.Ugandaisa“pre-dividend”country,meaningthattoday’schildrenwillbetheworking-agepopulationduringthecountry’sdemographictransition.ToensurethatUgandareapsademographicdividend,thegovernmentmustinvestinhumancapital.

AccordingtotheHumanCapitalIndex(HCI),aUgandanchildborntodaywillbeonly38percentasproductiveduringhis/herlifetimeasheorshecouldhavebeenwiththerightinvestmentsinhumancapital.TheHCIcombineshealthindicatorssuchasthechildsurvivalrate,thestuntingrate,andtheadultsurvivalrate

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UgandaEconomicUpdate|December,2023

StudentsatasecondaryschoolwithinKampalaCityCentrereadingbooks.DerrickSenyonyi,2023.

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UgandaEconomicUpdate|December,2023

witheducationindicatorssuchasaverageyearsofschoolingandaveragelearninglevels.Basedoninternationalevidence,theseindicatorscanbeusedtoestimatetheproductivityoffutureworkersagainstabenchmarkofcompleteeducationandfullhealth.Uganda’slowlevelsofhumancapitalderiveprimarilyfrompooreducationaloutcomes,includingoneofthelowestlearning-adjustedyearsofschooling(LAYS)amongalleconomiesintheHCI.Ugandanchildrencanexpecttocomplete6.8yearsofpre-primary,primary,andsecondaryschoolbyage18,butwhenscaledforlearningqualitythisfallstojust4.3LAYS—agapof2.5years.

Uganda’spubliceducationspendinghasbeenconsistentlylowinrecentdecades,fallingwellbelowinternationalbenchmarksandaverageexpendituresinotherEastAfricancountries.Policiesaimedatensuringuniversalaccesstoprimaryandsecondaryschoolinghavegreatlyexpandededucationopportunities.However,thegovernmentwillneedtoincreasepublicspendingoneducationtoachieveitsgoalswhilekeepingpacewithpopulationgrowth,ashouseholdsstillbearadisproportionateshareoftheburdenofeducationfinancing.

Inadequateandinefficientpublicspendingoneducationcontributestolowservicequality,unequalaccess,andsubparlearningoutcomes.Uganda’seducationoutcomesasmeasuredbyLAYSarebelowwhatwouldbeexpectedevenforacountrywithitslowlevelofeducationspending,highlightinginefficienciesintheeducationsystem.Mostchildrenenrolinprimaryeducation,butcompletionratesarelow,andlearningoutcomesarepoor.Therateofgraderepetitionattheprimarylevelishigh—especiallyinthefirstgrade—duemainlytotheunder-provisionofearlychildhoodeducation.Mostchildrenleaveschoolbeforecompletingsecondaryeducation,andmostofthosewhodrop

outdosoforcost-relatedreasons,thoughthereareadditionalgender-specificbarrierssuchaspregnancyamonggirls.Publicspendingineducationispro-poorattheprimarylevelbutbecomesincreasinglyregressiveasstudentsprogressthroughthesystem,withpostsecondaryeducationvirtuallyinaccessibletothepooresthouseholds.

AmassiveincreaseinpubliceducationspendingwillbenecessaryforUgandatomeetitslong-termdevelopmentobjectives,reapademographicdividend,andensureequitableaccesstohigh-qualityeducation.Thisreportpresentsfiverecommendations,eachwithasetofshort,medium,andlong-termactionsthegovernmentofUgandacantake,togetherwithotherstakeholdersanddevelopmentpartners,toachieveademographicdividend.ToaddressthechallengesfacingUganda’seducationsectorandenablethecountrytoachieveitsdevelopmentgoals,policymakersshould:

?Graduallyincreaseeducationspendingtoreflectan“expansionwithquality”scenariothatprioritizesinvestmentsinbasiceducationandskillsoverfurtherincreasesintertiaryeducation.

?Introduceoneyearofhigh-qualitypre-primaryeducationprovidedthroughthepubliceducationsystem.

?Comprehensivelyreformtheteachingprofessiontoimprovecompensation,strengthenaccountability,andprovidegreatersupportforteachers.

?Leveragetechnologicalsolutionstoaddressothersystemicinefficiencies.

?Reduceout-of-pocketeducationcostsandotherbarrierstoaccess.

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UgandaEconomicUpdate|December,2023

PART1

StateoftheEconomy

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UgandaEconomicUpdate|December,2023

Busy,wellmaintainedroadtransportonNtindaStretcherRoad,DerrickSenyonyi,2023.

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UgandaEconomicUpdate|December,2023

1.1RecentEconomicDevelopments

Globaleconomicgrowthisprojectedtoremainweakin2023duetothelingeringeffectsofmultiplecrises.

1.Globaleconomicgrowthisexpectedtoreach2.5percentin2023—up0.4percentagepointsfromtheJune2023forecast.

Thebetter-than-previously-projectedgrowthfor2023reflectstheeconomicperformanceoftheUnitedStatesashouseholdconsumptioncontinuestorecoverandlabourmarketsremainresilient.Globalinflationisprojectedtofallto6.9percentin2023,butrateswilllikelyremainabovetargetinmanyadvancedeconomiesduetotheappreciationoftheUSdollaragainstmajorcurrencies,lowerforeign-exchangereserves,andadelayedpass-througheffectofhigherenergyandcommodityprices.

2.TheconflictintheMiddleEasthasincreasedeconomicuncertaintyandheightenedtheriskoffoodinsecurity.Inthethirdquarterof2023(JulytoSeptember),theWorldBankcommoditypriceindexincreasedby5percent,drivenbyan11percentsurgeinoilpricesafterOPEC+decidedtocutsupply.TheWorldBank’scommoditymarketoutlook(October2023)indicatesthattheconflictintheMiddleEastwillhavealimitedimpactoncommodityprices—assuminghostilitiesremaincontained—withpricesultimatelybeingdrivenbyfundamentaldemandandsupplyfactors.However,theconflictmayintensifyfoodinsecurityintheMiddleEastbydisruptingthefoodsupplychain.

3.MultipleinternalandexternalfactorsaredisruptingAfrica’seconomicrecovery.5InEastAfrica,economicoutputisexpectedtogrowby1.9percentin2023,downfrom3.6percentinearlierforecasts,astheconflictinSudanhasgreatlyreducedlaborsupplyanddestroyedthecountry’sindustrialbase.EconomicactivityinSub-SaharanAfrica(SSA)isprojectedtogrowby2.5percentin2023,0.7percentagepointsbelowthelevelforecastinJune2023.Thedownwardrevisionreflectshigh(albeitdeclining)inflationrates,tightglobalanddomesticfinancialconditions,slowglobalgrowth,andincreasedconflictandviolencewithintheregion.AdverseweatherconditionsarealsoweighingoneconomicgrowthinSSA,includingrisingfloodrisksinthecoastalareasofEastAfrica.

4.Despiteeffortstostrengthenfiscalmanagement,averagedebtlevelsinSSAremainhigh.AccordingtotheOctober2023

editionofAfrica’sPulse,theregion’smedianpublicdebt-to-GDPratiofellonlyslightlyfrom59percentin2021to57percentin2022.6Meanwhile,ashiftinthecompositionoftheregion’sdebttowardnon-concessionalborrowinghasincreaseddebt-servicecosts,whichrosefrom16percentoftotalrevenuein2012to31percentin2022,constrainingtheavailablefiscalspaceandincreasingvulnerabilitytoshocks.Publicgrossfinancingneedsremainabovehistoricallevelsatabout11percentofGDPin2020–22andareprojectedtoremainat10percentoverthenextfiveyears.Chad,Ethiopia,Ghana,andZambiahaveresortedtodebtrestructuringtoresolvedebt-sustainabilityissuesandrebuildfiscalspace.

Growthhasbeenbroad-based,withrisingoutputintheagricultural,industrial,andservicesectors

5.Despiteunfavorableglobalanddomesticdevelopments,Uganda’seconomyhasmaintaineditsrecentgrowthmomentum.

RealGDPgrowthreached5.2percentinFY2023,belowthe5.7percentprojectedintheJune2023editionoftheUgandaEconomicUpdate.Thislowergrowthoutturnreflectedslowingeconomicactivityinthesecondandthirdquartersofthefiscalyear,drivenbyloweraggregatedemandastheeconomygrappledwithtightercreditconditions,t