By Martin Luther Oketch
Kampala — International audit firm PriceWaterHouseCoopers (PWC) has, in its 2019 economic outlook report, criticised government for failing to create enough jobs despite the economy registering rapid growth.
"The Ugandan economy is now on a path of rapid and sustained growth. However, the number of new jobs arising from this growth has been disappointingly low. Sustained growth of the economy was expected to create jobs, drive poverty reduction and make growth more inclusive," the report reads in part.
The report, released last Thursday, shows that Uganda's recent high economic growth rates have not translated into high growth in jobs.
The audit firm says the lack of growth in jobs has retarded poverty reduction. It observed that although the economy grew by an average of 4.5 per cent between 2015/16 and 2017/18, the number of people living in poverty increased in the same period from 19.7 per cent in 2015/16 to 21.4 per cent 2017/18.
"This means that whereas the economy is growing, this growth has not been inclusive enough as it has not translated into job creation, poverty reduction and significant wealth creation for Ugandans," the report states.
It states that one of the main reasons for the trend is that growth has been originating mainly from investments in public infrastructure as well as the mining and oil and gas capital intensive sectors, rather than in traditional labour intensive sectors such as agriculture.
"During the last 10 years the economy, measured at current market prices, has nearly trebled in size from Shs35.065 trillion in FY08/09 to Shs100.531 trillion in FY17/18. However, in that same period, average GDP per capita at current prices has increased by only 23 per cent from $650 (Shs2.3m) in FY08/09 to $799 (Shs2.9m) in FY2017/18. This means that whereas the economy is growing, this growth has not been inclusive enough," Mr Francis Kamulegeya, the PWC country senior partner, said.
However, on the other hand the report says Uganda's development status and trends over the 2010/11-2019/20 period reflect an improvement in several areas.
It says economic growth rate during the period averaged 5.5 per cent although this fell below the target of 7.2 per cent. In the last five years, the economy has been growing at an average rate of 4.7 per cent.
"This is again lower than the targeted annual growth rate of 6.3 per cent in the NDP (National Development Plan) II period. NDPII was designed to propel Uganda towards middle income status by 2020 in line with the aspirations of Uganda's Vision 2040," the report reveals.
The PWC report says the effective implementation of this plan was to lead to an average annual economic growth of 6.3 per cent from 2016 to 2020, GDP per capital of $1,039 for all Ugandans by 2020, 79 per cent of the labour force in employment and a poverty level of 14.2 per cent or below.