Uganda now middle-income country — UN

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Uganda has fulfilled the criteria for graduation to the list of lower middle-income countries, according to the United Nations (UN) country representative. 

Susan Ngongi Namondo says the development was reached a few days ago by the UN Committee for Development, following a rigorous process.  

Susan Ngongi-Namondo, UN Resident Coordinator. (Photo by Mpalanyi Ssentongo)

Namondo made the revelation during the launch of the UN Human Development Index (HDI) report at Makerere University on Wednesday, March 20, 2024.  

Rt. Hon. Robinah Nabbanja, Prime Minister of the Republic of Uganda launching the 2023/24 Human Development Report, titled "Breaking the Gridlock: Reimagining cooperation in a polarized World" This was at Makerere University, College of Business and Management Sciences, CTF2, Auditorium. (Photo by Mpalanyi Ssentongo)

She said Uganda will have to do a lot of preparations and that middle-income status could result in Uganda losing some privileges it has been enjoying as a least developed country (LDC).

“We all know that it takes three years for constantly meeting this before we are confirmed in the category,” she said.

She said in 2013, she had the privilege of living in Ghana when the country chose to move to the middle-income status category and had not planned for it and faced some challenges as a result.

“So, we have the opportunity as we move in that lower middle-income category to plan for it because it will cause some short-term disruptions in the budget. Some things will disappear. So, we need to plan to ensure that we can adequately handle the move into the lower middle-income country category,” she said.

To be classified as a middle-income one, a country must have a per capita gross national income (GNI) of $1,086 to $13,205, as per the World Bank 2022 ranking.

The GNI, previously known as gross national product, is the total is the total amount of money earned by a nation's people and businesses. The figure includes the nation's gross domestic product (GDP) plus the income it receives from overseas sources.

Uganda has been making an effort to join the club of middle income for years. The National Development Plan II had targeted 2020 as the year for Uganda to attain this coveted position, which was revised 10 2026 because of the COVID-19 disruptions.

In June 2022, President Museveni said Uganda had reached middle-income status despite an onslaught of crises in the past three years such as COVID-19 and locusts. He said, according to official data, the nation’s economy stood at about $45.7b by the exchange rate method or $131b  by the purchasing power parity (PPP) system.

He said that meant that the GDP per capita was $1046 that Uganda had "now passed the (previous) figure of middle-income status ($1,030)". However, the figures were disputed by the World Bank at the time.

They may also qualify if the GNI per capita of the country is at least twice the graduation threshold ($2,444) in two consecutive reviews.

World Bank yet to make a pronouncement

When contacted yesterday about the development, an official at the World Bank Uganda office who asked for anonymity, said the international financial institution was yet to announce Uganda’s status. 

“World Bank publishes new figures every July 1. That is when the next classification will come out,” he said.

Dr Fred Muhumuza, a lecturer of economics at Makerere University, also welcomed the development but clarified that Uganda has just started the process.

“To join, you ought to have been above a certain threshold for three years consistently,” he said, adding that GNI figures need to be verified. He explained that a country’s figures can jump because of temporary benefits.

“So, to confirm that you have joined, you need to be up there for three years,” he said. 

“It is a question of dividing the GNI by the population. If you get the figure above 1,200 in the first year, you have began the process. We wait to see if in the following year, you will sustain the process and then the following year.”

He said there are several benefits of joining but there are also costs because at that time Uganda will cease to qualify for some benefits. He said certain grants would not be given to Uganda because we would have qualified for commercial loans or non-concessional loans.

“So, if we still want non-concessional loans, we don’t want to put ourselves there. But if you are able to sustain yourself, it is okay because the economy has been able to launch you there,” he said, adding that on the whole it is a good thing for Uganda: “It would report positively for Uganda. That is why many of us are waiting for the World Bank to declare Uganda".

KACITA welcomes news

Issa Sekitto, the spokesperson of the Kampala City Traders Association (KACITA), welcomed the news.

“I can say it's good news if proven to be true and confirmed by benchmarks that are internationally accepted,” he said, adding however, that the common person needs to “see and feel it (middle-income) on the ground”.

“What middle-income means should translate into more people having work, and more disposable incomes so that it is not a creation of dualism where those who have cannot count the money, because they have too much, and those who don’t have cannot afford the basics of life. If we can do this in our homes and see the standards of living that will be very good.”

Sekitto said that what is on paper should translate directly to the population.

As of September 2023, there were 23 African countries in the middle-income status. In East Africa, Kenya and Tanzania are some of the countries with middle-income status.  

Speaking at the event, Namondo said as the United Nations “we remain steadfast to work with the Government to see how we can improve development and support Uganda".

“We are very passionate about collaboration and shared roles and as the UN, the biggest infrastructure we have is the good working relationship among countries,” she said.

Namondo congratulated Uganda for having made good progress as indicated by the strong performance in the HDI report which saw Uganda rise from 166th on the Human Development Index to 159th. The development also means Uganda now ties in the position with Zimbabwe, which dropped 13 places from 146^th. In East Africa, only Kenya, which also improved in the rankings (from 152 to 146), sits above Uganda.

The development was significant because for the first time Uganda moved from the low human development countries to medium human development countries.

On Tuesday, Prof. Augustine Nuwagaba, a development economist, said the improvement is good news because it shows a qualitative improvement in terms of access to health, education, water, sanitation and other human development services.

Steady progress

Prime Minister Robinah Nabbanja, who launched the UN HDI report, said Uganda had made progress on 26 of the 27 UN Sustainable Development Goals (SDG). She said the country has been having a challenge of compiling its data but it is being addressed.

Prime Minister Robinah Nabbanja. (Photo by Mpalanyi Ssentongo)

“Uganda’s progress on SDGs, shows that overall 26% of targets are on track with 54% of the targets showing limited progress and progress on 20% of the SDGs declining. To accelerate the implementation of the SDGs at the September 2023 SDG summit, the Government of Uganda made six strong commitments. Therefore, we need to see more collective actions and cooperation between state and non-state actors to address some of the challenges,” Nabbanja said.

According to Uganda Bureau of Statistics director for economic statistics Dr Kaudha Aliziki Lubega, Uganda’s GNI per capita has been growing from $831 in 2017/2019, $866 in 2018/2019, $900 in 2019/2020, $941 in 2020/2021, $1022 in 2021/2022 to $1072 in 2022/2023.