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

The Ugandan government responded to the COVID-19 pandemic by implementing expansionary fiscal and monetary policies to mitigate the economic contraction caused by aggressive containment measures. While these policies helped maintain financial sector stability and provided temporary liquidity to businesses, the economy experienced a significant slowdown, with real GDP growth dropping from 6.8% in FY 2018/19 to 2.9% in FY 2019/20. The industrial and services sectors were hardest hit, contributing to a projected 34.5% increase in the number of people living below the poverty line. Fiscal strain led to a rise in public debt from $12.55 billion to $15.27 billion in FY 2019/20, while the external sector saw a contraction in foreign direct investment and tourism receipts.

• 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, missing the projected growth of 6.3%.
• The industrial and services sectors experienced the sharpest declines in growth; industrial growth fell from 10.1% in FY 2018/19 to 2.2% in FY 2019/20, and services fell from 5.7% to 2.9% over the same period.
• The pandemic caused a severe increase in poverty, with the World Bank estimating that the number of Ugandans living below the poverty line likely rose from 8.7 million to 11.7 million, a 34.5% increase.
• To combat the economic downturn, the government adopted expansionary monetary policies, including reducing the central bank rate and the reserve requirement ratio, and easing liquidity for financial institutions.
• Fiscal deficits increased from 5% of GDP in FY 2018/19 to 7.5% in FY 2019/20, driven by higher government spending and a drop in tax revenue collection from 12.4% 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 external debt specifically increasing by 25.1%.
• The external sector was negatively impacted by a reduction in tourism receipts, which fell from 3.5% of GDP in FY 2018/19 to 2.4% in FY 2019/20.

APA

South African Institute of International Affairs (2021). Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic. https://saiia.org.za/research/uganda-and-covid-19-macroeconomic-policy-responses-to-the-pandemic/

Chicago

South African Institute of International Affairs. Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic. 2021. https://saiia.org.za/research/uganda-and-covid-19-macroeconomic-policy-responses-to-the-pandemic/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic |date=13 December 2021 |url=https://saiia.org.za/research/uganda-and-covid-19-macroeconomic-policy-responses-to-the-pandemic/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2021uganda, author = {{South African Institute of International Affairs}}, title = {{Uganda and COVID-19: Macroeconomic Policy Responses to the Pandemic}}, institution = {South African Institute of International Affairs}, year = {2021}, month = dec, url = {https://saiia.org.za/research/uganda-and-covid-19-macroeconomic-policy-responses-to-the-pandemic/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }