Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic

The Ugandan government implemented expansionary fiscal and monetary policies to mitigate the economic impact of COVID-19 lockdowns. While these measures helped stabilize the financial sector and provided temporary liquidity to businesses, the pandemic caused real GDP growth to drop from 6.8% in FY 2018/19 to 2.9% in FY 2019/20. The industrial and services sectors were most severely affected, contributing to a projected 34.5% increase in the number of people living below the poverty line. Fiscal deficits rose to 7.5% of GDP in FY 2019/20, leading to a 21.7% increase in public debt stock to $15.27 billion.

• Uganda's real GDP growth declined significantly due to the pandemic, falling from 6.8% in FY 2018/19 to 2.9% in FY 2019/20, which was well below the projected 6.3% for that period.
• The industrial and services sectors experienced the sharpest growth declines, with industrial growth dropping from 10.1% in FY 2018/19 to 2.2% in FY 2019/20, and services dropping from 5.7% to 2.9%. The agriculture sector was more resilient, though growth still decreased to 4.8% in FY 2019/20, affected by low productivity, floods, and a locust invasion.
• The pandemic severely impacted livelihoods, particularly for micro-, small- and medium-sized enterprises (MSMEs) which make up 90% of the private sector. World Bank estimates suggest the number of Ugandans living below the poverty line likely rose from 8.7 million to 11.7 million, a 34.5% increase.
• The government's expansionary monetary policy included reducing the central bank rate and reserve requirement ratio, and providing liquidity relief to the financial sector. While commercial lending rates initially dropped to 17.7% in April 2020, they later peaked at 20.9% in July 2020.
• Fiscal deficits increased from 5% of GDP in FY 2018/19 to 7.5% in FY 2019/20, driven by higher government spending (rising to 21.2% of GDP) and falling tax revenue (dropping to 11.6% of GDP).
• Public debt rose by 21.7%, increasing from $12.55 billion in FY 2018/19 to $15.27 billion in FY 2019/20, with public debt as a percentage of GDP rising from 35.3% to 41%. This increase was driven by revenue shortfalls and emergency spending on healthcare and vulnerable populations.
• The external sector saw a slight improvement in the current account deficit, which dropped from 7% to 6% of GDP in FY 2019/20, primarily due to reduced imports. However, the trade-in-services deficit worsened from 1% to 2.8% of GDP, largely because tourism receipts fell from 3.5% to 2.4% of GDP.

APA

Okumu, I. M., Kavuma, S. N., & Bogere, G. (n.d.). Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2021/12/11-CoMPRA-11-okumu-kavuma-bogere.pdf

Chicago

Okumu, Ibrahim M, Susan N Kavuma, and George Bogere. Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic. South African Institute of International Affairs, n.d. https://saiia.org.za/wp-content/uploads/2021/12/11-CoMPRA-11-okumu-kavuma-bogere.pdf.

Wikipedia

{{cite report |last1=Okumu |first1=Ibrahim M |last2=Kavuma |first2=Susan N |last3=Bogere |first3=George |title=Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic |publisher=South African Institute of International Affairs |url=https://saiia.org.za/wp-content/uploads/2021/12/11-CoMPRA-11-okumu-kavuma-bogere.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{okumunduganda, author = {Okumu, Ibrahim M and Kavuma, Susan N and Bogere, George}, title = {{Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic}}, institution = {South African Institute of International Affairs}, url = {https://saiia.org.za/wp-content/uploads/2021/12/11-CoMPRA-11-okumu-kavuma-bogere.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }