Uganda’s economy is expected to grow around 5.5 percent in the fiscal year ending in June and the pace of expansion could accelerate to 6 percent in the next 12 months boosted by good weather, the World Bank said on Tuesday.
In a report, the Washington-based multilateral body said risks to the East African country’s growth prospects in the coming years could come from greater regional instability and slow implementation of public infrastructure projects.
Uganda’s central bank has said the country needs growth rates of at least 7 percent and above to be able to pay back its rapidly growing public debt load.
According to the World Bank report Uganda’s “real output is expected to grow at close to 5.5 percent and could reach 6 percent in FY 2018/19, assuming improved execution of capital spending, favourable weather conditions, and barring other external shocks.”
Development of several public infrastructure projects is underway, including roads, power plants, a crude oil pipeline and airports as the country prepares to start oil production in 2020.
Crude reserves discovered in the Albertine rift basin in western Uganda in 2006 are estimated at 6.5 billion barrels.
“In the short term, weather-related shocks…and delays in public investment execution may constrain real GDP growth,” said.
An escalation of conflicts in neighbouring South Sudan and eastern Democratic Republic of Congo could compound such risks as insecurity crimps Uganda’s exports to those areas
Uganda ships mostly food items and light manufactured products like construction materials, beverages, plastics and others.