Uganda's fiscal policy reforms: What have we learned?

Abstract

This article attempts to provide an exploratory review of policy reforms, trends, and determinants of fiscal deficits in Uganda, a low‐income country that has undertaken many successful economic reforms. Fiscal policy reforms initially sought to stabilize the economy in the post‐crisis period with structural adjustment and economic recovery programs. With the restoration of macroeconomic stability, fiscal objectives shifted to poverty eradication following the promulgation of the Poverty Eradication Action Plan. More recently, a key fiscal policy objective is to unlock key growth and competitiveness constraints with the rolling out of National Development Plans. These reforms achieved much success in the early years, especially in the areas of macroeconomic stabilization and growth because they received support and political goodwill from the highest echelons of government. However, fiscal slippages during more recent years have often threatened to reverse the hard‐earned gains from these reform programs. Consequently, fiscal outcomes have been characterized by revenue shortfalls, budget execution challenges, accumulation of arrears, and rising debt.

Human Capital Development and Unemployment in Uganda: The Keynesian Theory of Unemployment in Perspective

“…In recent years, Uganda has experienced a combination of inflationary pressures and persistently high unemployment rates, posing challenges for policymakers in achieving macroeconomic stability and promoting inclusive growth (Munyambonera, Ndatira, & Mfite, 2023). Inflationary pressures in Uganda are often driven by a combination of domestic and external factors, including rising food and fuel prices, exchange rate fluctuations, supply chain disruptions, and monetary factors such as excessive money supply growth (Mawejje & Odhiambo, 2021). These inflationary pressures can erode the purchasing power of consumers, reduce real incomes, and exacerbate poverty and inequality, particularly among low-income households (Mawejje & Odhiambo, 2021).…”

“…Inflationary pressures in Uganda are often driven by a combination of domestic and external factors, including rising food and fuel prices, exchange rate fluctuations, supply chain disruptions, and monetary factors such as excessive money supply growth (Mawejje & Odhiambo, 2021). These inflationary pressures can erode the purchasing power of consumers, reduce real incomes, and exacerbate poverty and inequality, particularly among low-income households (Mawejje & Odhiambo, 2021). Moreover, high inflation rates can distort economic decision-making, reduce investment incentives, and undermine business confidence, leading to adverse effects on economic growth and employment creation (Mawejje & Odhiambo, 2021).…”

“…These inflationary pressures can erode the purchasing power of consumers, reduce real incomes, and exacerbate poverty and inequality, particularly among low-income households (Mawejje & Odhiambo, 2021). Moreover, high inflation rates can distort economic decision-making, reduce investment incentives, and undermine business confidence, leading to adverse effects on economic growth and employment creation (Mawejje & Odhiambo, 2021). Therefore, managing inflationary pressures is a key priority for policymakers in Uganda to ensure price stability, protect the welfare of the population, and promote sustainable economic development.…”

“…Therefore, managing inflationary pressures is a key priority for policymakers in Uganda to ensure price stability, protect the welfare of the population, and promote sustainable economic development. To effectively manage inflation, policymakers in Uganda implement a combination of monetary, fiscal, and exchange rate policies aimed at controlling aggregate demand, managing supply-side constraints, and maintaining price stability (Mawejje & Odhiambo, 2021).…”

Assessment of the effects of targeted poverty alleviation policy on differently poverty‐stricken households: A multi‐propensity score weighting model

“…Poverty eradication is the primary goal of the sustainable development goals (SDGs) that most governments in developing countries aspire to achieve (Bruckner et al, 2022). To achieve the goal, various measures have been proposed, such as microfinance (Abdallah Ali et al, 2022; Phan et al, 2022) and land consolidation (Zhang et al, 2022), as well as poverty reduction programs such as the poverty eradication action plan (PEAP) in Uganda (Mawejje & Odhiambo, 2021), the livelihood empowerment against poverty (LEAP) program in Ghana (Osei & Lambon‐Quayefio, 2021), the poverty reduction strategy (PRS) in Senegal (Casadella & Tahi, 2022), and the targeted poverty alleviation (TPA) program in China (Tang et al, 2022).…”