In its 2006 review of Uganda's economy, the International Monetary Fund (IMF) said that because of progressive macroeconomic policies, Uganda's "robust" growth in recent years was likely to continue. Indeed, in April 2006, the IMF predicted that GDP would grow 6.2 percent in 2006, and 6.1 percent in 2007. Moreover, inflation was under control and the rate of inflation would grow only 6.5 in 2006, and 4.0 percent in 2007.
If the IMF's report was the only source, it would seem that Uganda's long-standing reputation as one of Africa's more promising economies was justified. Even a cursory glance at the graph above, however, suggests that Uganda's progress may be more tenuous than macroeconomic statistics would indicate.
The graph plots the fiscal year (FY) rate of growth in private consumption from FY 2000 onward through FY 2004. The overall rate of growth is indicated by the orange line. And it slopes downward, as do all of the other measures. The violet line at the top, show a steep decline in the growth rate for services. The pink line even shows a contraction in the rate of growth for private consumption of food. And the yellow line breaks out all other private consumption.
A conclusion that private consumption in Uganda is in trouble is a straightforward inference from the graph.
And private consumption troubles are certainly at odds with statements like the following from the Organization for Economic Cooperation and Development (OECD) appearing in its year-end 2005 report on the Uganda economy. "For the past two decades, Uganda has had one of the most successful economies in Africa, combining high growth and low inflation." The statement isn't even accurate. The CIA's World Factbook estimates Uganda's rate of inflation for 2005 at 8.1 percent. This is hardly "low".