Economy grows by Shs6 trillion

Workers seal mineral water bottles at West Nile Distillers factory in Kampala recently. Manufacturing industry accounts for 18 per cent of GDP according to Ubos. Photo by Abubaker Lubowa 

By MARTIN LUTHER OKETCH

In Summary

Growth mainly propelled by the improved service sector, agriculture and the manufacturing sector.

KAMPALA- Uganda’s economy has expanded by Shs6 trillion which translates into 17.3 per cent growth.
The growth was mainly propelled by the improved service sector, agriculture and the manufacturing sector, according to the Uganda Bureau of Statistics (Ubos).

The Ubos on Friday said revised Gross Domestic Product (GDP) estimates for 2009/10 now stands at Shs40.946 trillion up from the earlier published estimate of Shs34.908 trillion.

“Today we are releasing improved and rebased estimates of Gross Domestic product from a period of 2002 to 2009/10. The rebased estimates are for the period 2008/09 to 2013/14,” said Mr Ben Paul Mungeyereza, the Ubos executive director, while presenting the findings in Kampala on Friday.

Rebasing of the national account series (which includes the GDP) is the process of replacing an old base year with a new and more recent base year. The base year provides the reference point to which future values of the GDP are compared.

The GDP is the total value of all goods and services produced over a specific period which can either be calculated quarterly or annually within the country. It represents the size of the economy.

The GDP rebasing is a normal statistical procedure undertaken by the national statistical offices of countries to ensure that national accounts statistics present the most accurate reflection of the economy.

Mr Mungyereza said the revised GDP indicates that agriculture accounted for 26 per cent of GDP compared to 24 per cent previously. He attributed this growth to the upward shift in agriculture contribution by increased Gross Value Added (GVA) for cash and food crops, animal production and forestry.
“However, the share for fishing activity declined slightly,” he said.

The revised GDP figures indicate that the manufacturing industry accounted for 18 per cent of GDP compared to 25 per cent that was published earlier.
Mr Mungyereza explained that the reduction in industrial contribution to the GDP was mainly due to decreased GVA for the electricity supply, water supply and construction activities.

On the services sector, the revised figures show that services accounted for 49 per cent of GDP compared to 46 per cent previously.

“Also, notable increases were in telecommunications, trade, human health, social work activities and business services. However, the share of GDP declined for accommodation and food services,” Mr Mungyereza explained.

Ubos used 2009/10 as the base year (reference year) to rebase the country’s current GDP size, which reveals that Uganda’s GDP at market prices were as follows: 2008/09 (Shs34.504 trillion); 2009/10 (Shs40,946 trillion); 2010/11 (Shs47,078 trillion); 2011/12 (Shs59,420 trillion); 2012/13 (Shs63,905 trillion) and Shs68,407 trillion in 2013/14.

Ten years ago Ubos used 2002 base year to rebase Uganda’s GDP, which revealed that the size of Uganda’s GDP was Shs34,504 trillion in 2008/09, Shs34,908 trillion in 2009/10, Shs39,086 trillion in 2010/11, Shs50,602 trillion in 2012/13 and Shs60,475 trillion in 2013/14.

The GDP growth figures further indicates that Uganda’s income per capita has also increased from $506 to $788 currently.
The Ubos Director of Macroeconomic, Dr Chris Mukiza, said the revision to nominal GDP over six years was 16.5 per cent with the highest increase of 204 per cent recorded in 2010/11 and the lowest revision being 13.1 per cent in 2013/14.

Rebasing also reveals a more accurate estimate of the size and structure of the economy by incorporating new economic activities which were not previously captured in the computational framework.

The Minister of Finance, Planning and Economic Development, Ms Maria Kiwanuka, said rebasing of Uganda’s GDP will help government make accurate estimates in economic growth in the coming years.
“It will also make Uganda a better investment choice for international investors,” she said.

The International Monetary Fund requires countries to rebase their GDP after every five years.