Uganda Economic Update, Edition 24

Investment Rating - The report emphasizes the importance of investing in Early Childhood Development (ECD) as a critical strategy for transforming human capital in Uganda, indicating a positive investment outlook in this sector [17][34]. Core Insights - Uganda's economy demonstrated resilience with a recorded growth of 6.1 percent in FY2023/24, supported by strong performance in the services and industrial sectors, particularly manufacturing and construction [23][70]. - The report highlights the significant role of ECD in harnessing Uganda's demographic dividend, suggesting that investments in early years can lead to healthier, more skilled, and productive adults, ultimately driving economic growth [17][35]. - The current Human Capital Index indicates that a child born today in Uganda will be only 39 percent as productive as a child who receives complete education and enjoys full health, underscoring the urgent need for enhanced investment in human capital [39][40]. Summary by Sections Recent Economic Developments - Uganda's economy continues to strengthen, with net exports being a key driver of growth, showing a substantial 46.4 percent increase in real exports in FY2023/24 [69]. - Inflation has significantly decreased, averaging 3.2 percent in FY2023/24, down from 8.8 percent the previous year, positioning Uganda among the East African nations with the lowest inflation rates [24][25]. - The current account deficit stood at 6.7 percent of GDP, reflecting improvements in merchandise trade performance, particularly in gold, coffee, and metals [26][27]. Economic Outlook, Risks, and Key Structural Issues - The medium-term outlook for Uganda remains positive, with projected real GDP growth of 6.2 percent in FY2024/25, although risks such as delays in oil production could impact this outlook [30][31]. - The report stresses the need for Uganda to prioritize jobs-rich economic transformation, particularly through investments in its future labor force [2][30]. Investing in Early Childhood Development - The report outlines the critical importance of ECD for Uganda's future prosperity, emphasizing that early investments can significantly shape labor market outcomes and drive economic growth [34][35]. - Recommendations include increasing public expenditure on ECD, strengthening quality assurance mechanisms, and enhancing the ECD workforce to improve service delivery [46][47]. - Key investment priorities identified include expanding primary healthcare facilities, introducing publicly financed pre-primary education, developing affordable childcare models, and scaling up parenting support programs [47][48].