Uganda has been ranked the 3rd poorest country in the world basing on her Gross Domestic Product (GDP), according to a report from focus-economics.com.
FocusEconomics is a leading provider of economic analysis and forecasts for 127 countries in Africa, Asia, Europe and the Americas, as well as price forecasts for 30 key commodities.
GDP is one of the primary indicators of a country’s economic performance. It is calculated by either adding up the annual incomes of all working-age citizens or by totaling the value of all final goods and services produced in the country during the year. Per capita GDP is sometimes used as a standard of living indicator, with a higher per capita GDP equating to a higher standard of living.
According to the report, countries like Luxembourg,
Switzerland and Norway are the richest in terms of GDP with a projected 2018 GDP of $117274.8, $82188.71 and $79214.45 respectively. On the other hand, countries like DRC, Mozambique and Uganda had the least GDP of $468.2076, $485.6679 and $ 737.8687 respectively.
“GDP per capita is often considered an indicator of the standard of living of a given country, as it reflects the average wealth of each person residing in a country. It is therefore the standard method used to compare how poor or wealthy countries are in relation to each other. With 2018 just under way, we decided to take a look at our forecasts for GDP per capita from
2018 to 2022 for the 127 countries we cover to get an idea of what countries are the poorest currently and which will be making a leap toward becoming wealthier in the coming years. The projections used in this study are Consensus Forecasts based on the individual forecasts of over 900 world renowned investment banks, economic think tanks and professional economic forecasting firms,” the report reads.
About Uganda, the report states, “Uganda finds itself in third place on the list with a 2018 projected GDP per capita of USD 738. Although this represents a large leap from the level of the first two on the list, Uganda is a bit of a strange case. Following the 1986 armed conflict, the ruling political party National Resistance Movement (NRM), enacted a series of structural reforms and investments that led to a period of significant economic growth and poverty reduction all the way up to 2010. In the last five years or so, economic growth has slowed and consequently so has the pace of poverty reduction. There are a variety of factors that have brought on the slowdown, however, it has been attributed mostly to adverse weather, private sector credit constraints, the poor execution of public sector projects and unrest in their neighbor South Sudan, which has flooded the country with refugees fleeing the country and subdued exports.”
According to the World Bank, if Foreign Direct
Investment accelerates, the banking system stabilizes, and budgeted, capital spending is executed without delays, the economy may start to pick up once again, helping to reduce poverty.
“Luckily for Uganda, it appears the FDI is indeed improving as it expanded by double digits in 2017, which bodes well for the economy and poverty reduction in the near future. The downside risk to the outlook is the weakness in the financial system, particularly the low level of credit in the private sector and the high cost of small loans. FocusEconomics panelists see growth of 5.4% in 2018 and 5.8% in 2019,” the report adds.
