Uganda: Strong growth from low base

Annual average GDP growth in the period 2000-08 was +7.5%, with Uganda one of the African economies consistently expanding at the fastest rate. Development of oil fields in the west (the Lake Albert

region) should offer scope for significant economic development and for continuation of high growth rates.

Monetary policy has shifted to inflation-targeting (announced in June 2011), partly in response to an IMF recommendation but also to alleviate potential adverse effects from the large capital inflows expected from the development of the oil sector. The current account records large deficits (averaging -4.6% of GDP in 2000-08), which have increased significantly in recent years (over -14% of GDP in 2012). External debt levels (debt/GDP of over 19% and debt/export earnings over 77% in 2013) are much improved following debt relief initiatives. Development of the country's energy sector has increased popular expectations and the government needs to manage potential oil windfalls effectively, including an equitable revenue distribution.