Uganda’s GDP contracts 0.2% in Q1 of 2016/17

Uganda’s economy contracted by 0.2% in the first quarter of 2016/17 – the second decline in 11 quarters – with shrinking value in the agricultural sector responsible for the decline, according to estimates released by the Uganda Bureau of Statistics.

Real gross domestic product expanded 0.6% (revised) in the fourth quarter of 2015/16 (April-June 2016), and by 1% in the first quarter of the same financial year.

Value added in the agriculture, forestry, and fishing sector fell 1.1%, the third consecutive quarterly decline. The statistics bureau attributes the contraction in the sector to declining output from cash crops and food crops growing activities, which fell 5.5% and 0.8% respectively.

The fall in food crops activities – which are the second largest contributor to total GDP with a share of 10.8% – has mirrored that of the agriculture sector; the value added of food crops has fallen for three consecutive quarters, but at a declining rate each period.

Output in the services sector, which accounts for just over half of Uganda’s GDP (51.6%), was stable at Shs7,239.65 billion shillings compared to Shs7239.06 billion in the last quarter of 2015/16. Trade and repairs activities, which are the biggest contributor to GDP with 11%, rose 0.7% after declining by 1.6% in the previous quarter. However, declines were registered for financial and insurance services (1.7%) and public administration (16.3%).

Value added in the industry sector rose 1.3% after a 2.7% decline in the previous quarter. The main driver of the sector’s growth was construction activities which increased by 9.2%, a sharp reversal from the 14% fall in the previous quarter. Output from manufacturing however fell 4.6% versus a 3% increase in the last three months of 2015/16. The fall in manufacturing was due to the poor performance of cash and food crops which “resulted in a decline in agro-processing industries,” UBOS said.