I have listened to discussions and read articles on economic growth during this political season. I’m compelled to write this article to explain how countries grow and ultimately develop. I will also answer ‘whose GDP growth?’ and state what more can be done to further grow our economy.
Economic growth, whose main measure is Gross Domestic Product (GDP), is the increase in the productive capacity, or potential output, of the entire economy of a country.
The ingredients of economic growth are capital (earning interest), labour (wages and salaries), entrepreneurial (or enterprise) earning profit, and sometimes land (where they have it) earning rent.
Based on GDP and other measures of the economy, I wish to state that Uganda is growing and should be supported by citizens, investors (domestic and foreign), academia, media and others. It is true that in 1986, her total output of the economy was estimated at around $3.9 billion. It has now exceeded $60b as of June 2025 and is targeting $500b by 2040.
Given our history and our location geographically, with most countries suffering a peace and stability deficit all around us, the growth rate has been impressive. Uganda has maintained a growth rate above 6 percent for several decades.
Source of funds
For the private sector, sources of funds include own money, support from friends and family, selling shares on the stock exchange, loans from banks, and sometimes government support. What are the government’s sources of funds to run the country?
Sources include taxes, levies, government investments, sometimes government or its agencies undertake consultancy for other countries or agencies, consular fees, private sector investments (DDI and FDI), exports, grants, and loans.
Let me state that all countries are always seeking investors for their countries. Countries are competing for investors all the time. US President Donald Trump is traversing the globe, wooing investors.
A government has created an enabling environment, and firms have invested; it is expected that they pay taxes, create jobs, bring in technology and sometimes corporate social responsibility, and expand and widen the export base to bring in more foreign exchange.
No government can force an investor on how to enjoy profits and where they should enjoy them. Moral suasion will be required to have investors re-use their money in re-investing in this country.
What more can be done to continue sustained growth for Uganda?
A leadership that keeps ensures peace and stability is paramount.
We need to continue with maintained security to avoid joining our neighbours in the peace deficit. The economy cannot grow without security for people and their property. Money hates noise. It will move away when noise escalates.
Continue efforts in critical infrastructure and power development (roads, power, railways, water, etc.,).
There is need to continue our membership in regional integration for peace and markets. Let us understand that as a country our market is not enough market, more markets continue to be gained by our membership in the EAC, COMESA, and recently AfCTA.
Role of the state and the private sector. The government has cautiously undertaken operations of organisations with government shares to push the private sector development; with the private sector supported to become competitive.
Market-friendly policies should continue to spur private sector competitiveness by promoting competition, standards, exports, investments, tourism, ICT, among others.
Continue investment promotion and facilitation has enhanced the size and quantity of industries and business domestically and for exports. Uganda is ranked by some countries as one of the best investment destinations.
Export promotion and tourism promotion as marketing pivots for the country should continue.
Continued economic and commercial diplomacy efforts by our missions in different parts of the world is important for investments, exports, tourism, and diaspora remittances.
Wishing you peaceful campaigns and elections. I have already voted for peace and stability.