Country Report Uganda March 2011

Outlook for 2011-12: Economic growth

The economy will continue to expand at a reasonable rate, relying on the industrial and services sectors. We forecast a slight pick-up in real GDP growth from an estimated 6.1% in 2010 to 6.3% in 2011, before it accelerates to 7% in 2012 as foreign investment and regional demand rise. The performance of the agricultural sector, which accounts for a declining proportion of GDP but employs more than 70% of the labour force, will largely depend on weather conditions. Construction activity will be strong, driven by donor-funded and privately financed building projects. The energy sector will attract unprecedented amounts of investment, and construction work on an oil refinery and pipeline to the Kenyan coast is likely to begin during the forecast period. However, it will be several years before oil production in the country reaches targeted levels of around 150,000 barrels/day. Electricity shortages will be less frequent as expensive temporary thermal power is used to cover shortfalls, and 50 mw of the 259-mw Bujagali hydroelectric dam is scheduled to come on stream in October 2011, with full production scheduled for April 2012.

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