The future of growth in Uganda.“Healthy economies should be designed to thrive, not grow"

Economies worldwide have been designed to grow with economic growth seen as the ultimate goal for any country to the extent that a country’s progress is based on percentage figures. We need to start thinking of structuring economies to thrive rather than grow, given nothing grows forever, the idea of growth makes Gross Domestic Product (GDP) the overall goal of policy, and this puts mass consumerism as a driving force for GDP which leads to over-utilization of resources that causes environmental and inequality problems. By designing the economy to thrive we can build economies that put social foundation, regenerative and redistributive economic models, and an ecological ceiling at the center of development.

According to the World Bank report, Uganda's real gross domestic product (GDP) growth accelerated from 5.3% in FY22/23 to an estimated 6% in FY23/24. This growth was driven by low inflation, a recovery in real income, and improved employment rates, which bolstered consumption. Despite tight domestic and global financial conditions, private investment remained resilient, contributing to this economic expansion.

However, while these figures suggest a positive trajectory for the economy, it's important to look beyond the numbers. GDP growth, though an important measure of economic activity, does not always equate to an improvement in people's welfare. Sometimes, we see GDP rising while the quality of life for many citizens remains stagnant or even declines. This can happen when growth is concentrated in certain sectors or benefits only a small portion of the population, leaving issues like income inequality, poor working conditions, and environmental degradation unaddressed.

Welfare encompasses more than just economic output; it includes access to healthcare, quality education, environmental sustainability, and a fair distribution of resources. When GDP grows but these aspects of welfare do not improve, or worse, decline, it raises questions about the true effectiveness of our economic strategies. Should we continue to prioritize GDP growth as the ultimate goal, or should we shift our focus to building an economy that truly enhances the well-being of all citizens? This is a critical discussion, especially for developing countries like Uganda, where the need for sustainable and inclusive development is paramount.

This abstract was written by Bill Mark Muwonge (Rethinking Economics MUK)