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Tuesday, August 16, 2022

CROSSFIRE: Veteran Journalists Andrew Mwenda, Timothy Kalyegira Clash Over ‘Museveni GDP Figures’

Two veteran journalists, Andrew Mwenda and Timothy Kalyegira, have been debating economic growth figures under President Museveni’s NRM government.

The debate was sparked off by Museveni speech during the NRA/NRM 36th anniversary celebrations.

Kalyegira punched holes in the president’s figures, and Mwenda shot back.

Here is argument and the counter-argument on Uganda’s GDP figures:

Uganda’s GDP growth since 1986 — correcting President Museveni

By Timothy Kalyegira

Speaking at a ceremony yesterday to commemorate the 36th anniversary of the NRM’s rise to state power, President Museveni said Uganda’s GDP has grown by 31 times since 1986. That is not accurate.

Uganda’s economy, was $4.2 billion in Jan. 1986 when the NRM came to power. Adjusted for inflation, that’s $10.6 billion in Dec. 2021 dollars. Uganda’s GDP in late 2021 was $32.5 billion.

So Uganda’s economy or GDP has grown by three times since 1986, NOT 31 times as President Museveni said.

If Uganda’s GDP had grown by 31 times since 1986, today Uganda would be Africa’s second-largest economy, behind only Nigeria and South Africa would be in third place.

Interestingly, Uganda’s GDP per capita was $241.75 in 1985, the year before the NRM came to power. Adjusted for inflation in 2022 dollars, that’s $614 per capita.

Today, Jan. 2022, Uganda’s per capita GDP is 897. So, over the past three and a half decades, Uganda’s GDP per capita (the income per citizen) has not grown very much.

This might explain the common view among ordinary people that they hear of all this impressive economic growth but don’t feel it in their pockets.

A reply to Kalyegira

By Andrew M. Mwenda

In a post circulating on social media, social critic Timothy Kalyegira presents a series of statistics some of which are outdated while others are misplaced or out of context.

Here is a clearer picture of Uganda’s economic trajectory since January 1986. Uganda’s GDP had been captured at $4.9 billion in 1986 (this is a world bank number, although Timothy quotes $4.2 billion – I don’t know from where.

In spite of good growth rates (which are listed below) our GDP continued to fall until it reached $2,748 in 1992. Why would GDP growth be accompanied by declining GDP?

It is because in 1986 the exchange rate was set by the government and thus did not reflect the market value of the dollar.

However in 1987, government began to liberalize the exchange rate until it was fully liberalized and therefore able to reflect the true size of our GDP in 1992.

The best way to capture the actual GDP of Uganda in 1986 is to calculate it backward by removing the annual growth rate from 1992-1987. So where we go. In 1992 when the exchange rate was fully liberalized, our GPD became $2,748. 1990/91 GDP it had grown by 5.8%, meaning previous year it was $2,597.

In 1989/90 it had grown by 6.2%, so the previous year it was $2,445. In 1988/89 it had grown by 6.5%, meaning in the previous year it was $2,296.

In 1987/88 it had grown by 7.9%, so in the previous year it was $2,128. That is the GDP of Uganda in 1987 – $2,128 billion, not $4.2 billion.

Per capita income was $403 in 1986, but in spite of growth it had fallen to $160 in 1992.

Uganda population 1986, 15m, GDP, $2,128. If we adjust it to inflation (2020) it comes to $5 billion. So nominal GDP per capita was $142; and when adjusted to inflation (2020) it comes to $337Uganda GDP today as captured by IMF is $43.24 billion and GDP per capita, $1,018.

So GDP has grown 20.4 fold (when adjusted to inflation 8.6 fold) while per capita income has grown seven fold, (when adjusted to inflation, three fold).

Few countries in the history of the world have tripped their GDP in 30 years after adjusting for inflation.

Timothy Kalyegira is Editorial Director at Kampala Express while Andrew Mwenda is Editorial Director at The Independent Magazine

Disclaimer: The views expressed in articles published in the Viewsroom Section of The Pearl Times are those of individual writers and do not represent the official view of The Pearl Times, its director, management and staff on the issue(s) addressed.

Opinion writers are individually responsible and liable for the omissions and misrepresentations in the work published by this medium of communication.

Editor’s Note: To be published in The Viewsroom, email your opinion, preferably less than 600 words, and photo to pearltimesug@gmail.com.

Pearl Times Reporter
Pearl Times Reporterhttps://pearltimes.co.ug
Latest Uganda news, politics, business, health and entertainment coverage.

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