Uganda's economic outlook and environmental sustainability

Uganda finds itself at a critical juncture in its economic and environmental journey, facing challenges that could shape its prospects for sustainable growth. In a recent interview with CNBC Africa, Dr. Fred Muhumuza, Director of The Economic Forum at Makerere University Business School, shed light on the country's economic outlook, highlighting key issues such as a growing debt burden, slow growth rate, and environmental concerns. With the World Bank projecting a growth rate of 6.2 per cent for Uganda, Dr. Fred discussed the drivers of this growth, the impact of the country's debt burden, and the steps needed to achieve sustainable economic development. One of the key drivers of Uganda's projected growth is the investments in the oil and gas sector. However, Dr. Fred emphasized that these investments may not yield immediate benefits, as the returns will only be realized in the years to come. He raised the question of whether a growth rate of 6.2 per cent is sufficient for Uganda to address its pressing economic challenges, arguing that the country needs double-digit growth to make significant progress. Dr. Fred also delved into the issue of Uganda's growing debt burden, highlighting the implications of high debt-to-GDP ratios and the opportunity cost of servicing debt. With a significant portion of the budget allocated to debt servicing, there are concerns about the impact on resources available for essential services and infrastructure development. Dr. Fred emphasized the need for Uganda to curtail its borrowing and prioritize investments to prevent further escalation of debt. Regarding the country's economic growth shortfall, Dr. Fred expressed concerns about Uganda's current growth rate of 6.1 per cent, which falls short of the 13.7 per cent rate needed to achieve middle-income status. Despite the World Bank's projection of 6.2 per cent growth, Dr. Fred stressed that a double-digit growth rate is essential for Uganda's long-term development. He called for greater attention from decision-makers to address the growth shortfall and work towards accelerating economic growth. As Uganda grapples with these economic challenges, the path to sustainable growth lies in prudent debt management, strategic investments, and a concerted effort to boost economic expansion. The country's ability to navigate these hurdles will be instrumental in shaping its economic future and ensuring environmental sustainability for generations to come.