📋 Tender Overview
Ugandas real gross domestic product GDP growth in 2020 is projected to be between 0.4 and 1.7 compared to 5.6 in 2019 according to the latest edition of the Uganda Economic Update released by the World Bank today. The report Digital Solutions In A Time of Crisis shows the economy has suffered from the triple shocks of the COVID-19 coronavirus related economic and social disruption a locust invasion and floods. Up to three million Ugandans could fall into poverty due to economic hardship and a lack of alternative means of survival. Global and local restrictions in the movement of people and goods and provision of services to contain the COVID-19 pandemic have resulted in lower consumption loss of jobs and a 43 reduction in remittances. Due to a sharp drop in tax revenues Government has also been forced to borrow much more to continue providing services to Ugandans. Uganda however remains at low risk of debt distress based on the April 2020 joint World Bank-IMF debt sustainability analysis. With total debt service interest and principal due expected to average around 55 percent of government revenues over the next three years there is a need to cut back on non-priority spending in order to provide essential public services such as health education water and sanitation and electricity. A more widespread pandemic could pose significant risks to the outlook as well as any further significant locust invasion. Weak economic growth in the post COVID-19 period will continue to reduce overall consumption and commodity demand. In addition crude oil prices are expected to average 35 per barrel this year and 42 per barrel in 2021. Although this will limit external inflationary pressures for import-dependent Uganda these prices are below the estimated breakeven price of 60 for oil production in Uganda. This could negatively impact Ugandas prospects of becoming an oil producer within the next four to five years.The increased use of digital technologies during the COVID-19 lockdown such as mobile money on-line shopping on-line education digital disease surveillance and monitoring and dissemination of public health messages shows the great potential to support faster economic recovery and strengthen resilience against similar shocks. The digital space in Uganda is very innovative and has quickly adapted during the pandemic. Fintechs have offered payment options and digital solutions have reinforced and enabled the health sectors calls to social distance and limit movement and contact. These solutions if upscaled and developed to their potential would boost the digital economy and maximize its benefits to Ugandans said Tony Thompson World Bank Country Manager for Uganda.The report points to the current national ID system as one of the successes of technological advancement which can be leveraged to support more efficient e-government systems and authentication by the public and private sectors while expanding financial inclusion strengthening social protection delivery supporting immigration control and refugee management. While Uganda has made reasonable technological strides the analysis notes that it still lags with a phone penetration rate of 69.2 of the population far below the average of 84for Africa. There are gender and geographical gaps in access for example 46 t of female adults have access to mobile phone compared to 58 of male adults. Similarly adults in urban areas are more likely to own mobile phones 70 and have access to the internet 25 compared to adults in rural areas 46own phones and 5 percent have internet access.The economic update makes several recommendations for the economy and ICT sector including implementing supportive policies and regulation review of taxation in the digital economy leveraging technology to support the health sector and economic recovery through increased digitalization of agribusiness and manufacturing expansion of social safety nets and transparency and accountability of governments response to COVID-19. It also recommends the development of a coherent strategy of ecosystem support and catalyzing regional and global integration of Ugandas digital economy.There are areas of the economy that have shown resilience in the current crisis and by leveraging digital technologies are inventing new ways of operating and doing business said Richard Walker World Bank Senior Economist for Uganda.
