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Uganda vs. Kenya

Economy

UgandaKenya
Economy - overview

Uganda has substantial natural resources, including fertile soils, regular rainfall, substantial reserves of recoverable oil, and small deposits of copper, gold, and other minerals. Agriculture is one of the most important sectors of the economy, employing 72% of the work force. The country's export market suffered a major slump following the outbreak of conflict in South Sudan, but has recovered lately, largely due to record coffee harvests, which account for 16% of exports, and increasing gold exports, which account for 10% of exports. Uganda has a small industrial sector that is dependent on imported inputs such as refined oil and heavy equipment. Overall, productivity is hampered by a number of supply-side constraints, including insufficient infrastructure, lack of modern technology in agriculture, and corruption.

Uganda's economic growth has slowed since 2016 as government spending and public debt has grown. Uganda's budget is dominated by energy and road infrastructure spending, while Uganda relies on donor support for long-term drivers of growth, including agriculture, health, and education. The largest infrastructure projects are externally financed through concessional loans, but at inflated costs. As a result, debt servicing for these loans is expected to rise.

Oil revenues and taxes are expected to become a larger source of government funding as oil production starts in the next three to 10 years. Over the next three to five years, foreign investors are planning to invest $9 billion in production facilities projects, $4 billion in an export pipeline, as well as in a $2-3 billion refinery to produce petroleum products for the domestic and East African Community markets. Furthermore, the government is looking to build several hundred million dollars' worth of highway projects to the oil region.

Uganda faces many economic challenges. Instability in South Sudan has led to a sharp increase in Sudanese refugees and is disrupting Uganda's main export market. Additional economic risks include: poor economic management, endemic corruption, and the government's failure to invest adequately in the health, education, and economic opportunities for a burgeoning young population. Uganda has one of the lowest electrification rates in Africa - only 22% of Ugandans have access to electricity, dropping to 10% in rural areas.

Kenya is the economic, financial, and transport hub of East Africa. Kenya's real GDP growth has averaged over 5% for the last decade. Since 2014, Kenya has been ranked as a lower middle income country because its per capita GDP crossed a World Bank threshold. While Kenya has a growing entrepreneurial middle class and steady growth, its economic development has been impaired by weak governance and corruption. Although reliable numbers are hard to find, unemployment and under-employment are extremely high, and could be near 40% of the population. In 2013, the country adopted a devolved system of government with the creation of 47 counties, and is in the process of devolving state revenues and responsibilities to the counties.

Agriculture remains the backbone of the Kenyan economy, contributing one-third of GDP. About 75% of Kenya's population of roughly 48.5 million work at least part-time in the agricultural sector, including livestock and pastoral activities. Over 75% of agricultural output is from small-scale, rain-fed farming or livestock production. Tourism also holds a significant place in Kenya's economy. In spite of political turmoil throughout the second half of 2017, tourism was up 20%, showcasing the strength of this sector. Kenya has long been a target of terrorist activity and has struggled with instability along its northeastern borders. Some high visibility terrorist attacks during 2013-2015 (e.g., at Nairobi's Westgate Mall and Garissa University) affected the tourism industry severely, but the sector rebounded strongly in 2016-2017 and appears poised to continue growing.

Inadequate infrastructure continues to hamper Kenya's efforts to improve its annual growth so that it can meaningfully address poverty and unemployment. The KENYATTA administration has been successful in courting external investment for infrastructure development. International financial institutions and donors remain important to Kenya's growth and development, but Kenya has also successfully raised capital in the global bond market issuing its first sovereign bond offering in mid-2014, with a second occurring in February 2018. The first phase of a Chinese-financed and constructed standard gauge railway connecting Mombasa and Nairobi opened in May 2017.

In 2016 the government was forced to take over three small and undercapitalized banks when underlying weaknesses were exposed. The government also enacted legislation that limits interest rates banks can charge on loans and set a rate that banks must pay their depositors. This measure led to a sharp shrinkage of credit in the economy. A prolonged election cycle in 2017 hurt the economy, drained government resources, and slowed GDP growth. Drought-like conditions in parts of the country pushed 2017 inflation above 8%, but the rate had fallen to 4.5% in February 2018.

The economy, however, is well placed to resume its decade-long 5%-6% growth rate. While fiscal deficits continue to pose risks in the medium term, other economic indicators, including foreign exchange reserves, interest rates, current account deficits, remittances and FDI are positive. The credit and drought-related impediments were temporary. Now In his second term, President KENYATTA has pledged to make economic growth and development a centerpiece of his second administration, focusing on his "Big Four" initiatives of universal healthcare, food security, affordable housing, and expansion of manufacturing.

GDP (purchasing power parity)$96.838 billion (2019 est.)

$90.669 billion (2018 est.)

$85.406 billion (2017 est.)

note: data are in 2017 dollars
$227.638 billion (2019 est.)

$216.046 billion (2018 est.)

$203.206 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate4.8% (2017 est.)

2.3% (2016 est.)

5.7% (2015 est.)
5.39% (2019 est.)

6.32% (2018 est.)

4.79% (2017 est.)
GDP - per capita (PPP)$2,187 (2019 est.)

$2,122 (2018 est.)

$2,075 (2017 est.)

note: data are in 2017 dollars
$4,330 (2019 est.)

$4,204 (2018 est.)

$4,046 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 28.2% (2017 est.)

industry: 21.1% (2017 est.)

services: 50.7% (2017 est.)
agriculture: 34.5% (2017 est.)

industry: 17.8% (2017 est.)

services: 47.5% (2017 est.)
Population below poverty line21.4% (2016 est.)36.1% (2015 est.)
Household income or consumption by percentage sharelowest 10%: 2.4%

highest 10%: 36.1% (2009 est.)
lowest 10%: 1.8%

highest 10%: 37.8% (2005)
Inflation rate (consumer prices)2.8% (2019 est.)

2.6% (2018 est.)

5.6% (2017 est.)
5.1% (2019 est.)

4.6% (2018 est.)

8% (2017 est.)
Labor force15.84 million (2015 est.)19.6 million (2017 est.)
Labor force - by occupationagriculture: 71%

industry: 7%

services: 22% (2013 est.)
agriculture: 61.1%

industry: 6.7%

services: 32.2% (2005 est.)
Unemployment rate9.4% (2014 est.)40% (2013 est.)

40% (2001 est.)
Distribution of family income - Gini index42.8 (2016 est.)

45.7 (2002)
40.8 (2015 est.)

42.5 (2008 est.)
Budgetrevenues: 3.848 billion (2017 est.)

expenditures: 4.928 billion (2017 est.)
revenues: 13.95 billion (2017 est.)

expenditures: 19.24 billion (2017 est.)
Industriessugar processing, brewing, tobacco, cotton textiles; cement, steel productionsmall-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement, commercial ship repair, tourism, information technology
Industrial production growth rate4.4% (2017 est.)3.6% (2017 est.)
Agriculture - productssugar cane, plantains, cassava, maize, sweet potatoes, milk, vegetables, beans, bananas, sorghumsugar cane, milk, maize, potatoes, bananas, camel milk, cassava, sweet potatoes, mangoes/guavas, cabbages
Exports$7.686 billion (2019 est.)

$6.511 billion (2018 est.)

$5.958 billion (2017 est.)
$10.078 billion (2019 est.)

$10.1 billion (2018 est.)

$9.723 billion (2017 est.)
Exports - commoditiesgold, coffee, milk, fish and fish products, tobacco (2019)tea, cut flowers, refined petroleum, coffee, titanium (2019)
Exports - partnersUnited Arab Emirates 58%, Kenya 9% (2019)Uganda 10%, United States 9%, Netherlands 8%, Pakistan 7%, United Kingdom 6%, United Arab Emirates 6%, Tanzania 5% (2019)
Imports$9.991 billion (2019 est.)

$8.006 billion (2018 est.)

$7.44 billion (2017 est.)
$18.729 billion (2019 est.)

$19.116 billion (2018 est.)

$18.653 billion (2017 est.)
Imports - commoditiespackaged medicines, aircraft, delivery trucks, cars, wheat (2019)refined petroleum, cars, packaged medicines, wheat, iron products (2019)
Imports - partnersChina 19%, India 17%, Kenya 16%, United Arab Emirates 7%, Japan 5% (2019)China 24%, United Arab Emirates 10%, India 10%, Saudi Arabia 7%, Japan 5% (2019)
Debt - external$13.85 billion (2019 est.)

$12.187 billion (2018 est.)

$6.241 billion (31 December 2016 est.)
$29.289 billion (2019 est.)

$25.706 billion (2018 est.)
Exchange ratesUgandan shillings (UGX) per US dollar -

3,680 (2020 est.)

3,685 (2019 est.)

3,735 (2018 est.)

3,234.1 (2014 est.)

2,599.8 (2013 est.)
Kenyan shillings (KES) per US dollar -

111.45 (2020 est.)

101.4 (2019 est.)

102.4 (2018 est.)

98.179 (2014 est.)

87.921 (2013 est.)
Fiscal year1 July - 30 June1 July - 30 June
Public debt40% of GDP (2017 est.)

37.4% of GDP (2016 est.)
54.2% of GDP (2017 est.)

53.2% of GDP (2016 est.)
Reserves of foreign exchange and gold$3.654 billion (31 December 2017 est.)

$3.034 billion (31 December 2016 est.)

note: excludes gold
$7.354 billion (31 December 2017 est.)

$7.256 billion (31 December 2016 est.)
Current Account Balance-$1.212 billion (2017 est.)

-$707 million (2016 est.)
-$57.594 billion (2019 est.)

-$56.194 billion (2018 est.)
GDP (official exchange rate)$34.683 billion (2019 est.)$95.52 billion (2019 est.)
Credit ratingsFitch rating: B+ (2015)

Moody's rating: B2 (2016)

Standard & Poors rating: B (2014)
Fitch rating: B+ (2007)

Moody's rating: B2 (2018)

Standard & Poors rating: B+ (2010)
Ease of Doing Business Index scoresOverall score: 60 (2020)

Starting a Business score: 71.4 (2020)

Trading score: 66.7 (2020)

Enforcement score: 60.6 (2020)
Overall score: 73.2 (2020)

Starting a Business score: 82.7 (2020)

Trading score: 67.4 (2020)

Enforcement score: 58.3 (2020)
Taxes and other revenues14.5% (of GDP) (2017 est.)17.6% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-4.1% (of GDP) (2017 est.)-6.7% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 14.8%

male: 12.7%

female: 17.3% (2017 est.)
total: 7.4%

male: 7.3%

female: 7.4% (2016)
GDP - composition, by end usehousehold consumption: 74.3% (2017 est.)

government consumption: 8% (2017 est.)

investment in fixed capital: 23.9% (2017 est.)

investment in inventories: 0.3% (2017 est.)

exports of goods and services: 18.8% (2017 est.)

imports of goods and services: -25.1% (2017 est.)
household consumption: 79.5% (2017 est.)

government consumption: 14.3% (2017 est.)

investment in fixed capital: 18.9% (2017 est.)

investment in inventories: -1% (2017 est.)

exports of goods and services: 13.9% (2017 est.)

imports of goods and services: -25.5% (2017 est.)
Gross national saving22.2% of GDP (2019 est.)

21.3% of GDP (2018 est.)

23.6% of GDP (2017 est.)
8% of GDP (2019 est.)

8.6% of GDP (2018 est.)

9.2% of GDP (2017 est.)

Source: CIA Factbook