World Bank Maintains Uganda's Low-Income Status Amidst Disagreement

Two months after President Museveni announced Uganda’s ascent to lower-middle-income status, the World Bank Group has countered, placing the nation among low-income economies in its latest classifications for the 2026-2027 fiscal year. This divergence stems from the differing metrics used by Uganda and the World Bank to assess economic progress.

President Museveni’s declaration was based on Gross Domestic Product (GDP) per capita, which he stated had reached $1,278, surpassing the lower-middle-income threshold of $1,136. This figure was presented as evidence of economic transformation, with Uganda’s GDP reportedly growing from $3.9 billion in 1986 to approximately $69.3 billion in 2026.

However, the World Bank relies on Gross National Income (GNI) per capita for its classifications. For the 2027 fiscal year, the threshold for low-income countries is set at a GNI per capita of $1,175, with lower-middle-income economies ranging from $1,176 to $4,635. Uganda remains below this GNI per capita benchmark.

The fundamental difference lies in GDP versus GNI. GDP measures economic output within a country’s borders, while GNI includes income earned by residents and businesses, both domestically and from abroad. The World Bank uses the Atlas method to convert GNI per capita into dollars, smoothing exchange rate fluctuations for better international comparison.

Uganda’s significant population growth is a key factor hindering increases in per capita income. Rapid population expansion means that national income is divided among a larger number of people. Furthermore, a substantial portion of the population relies on agriculture, an sector often characterized by lower productivity and vulnerability to climate shocks.

This situation contrasts with Togo, which was upgraded to lower-middle-income status. Togo’s reclassification was significantly influenced by a downward revision of its population estimates following a census, which statistically increased its per capita income. This illustrates that economic growth alone does not guarantee a move between World Bank income categories.

Economic analysts suggest Uganda should focus on strategic interventions, such as reducing government borrowing and increasing public-sector efficiency, rather than disputing the classification. Reforms aimed at boosting productivity and household incomes through value addition, industrialization, and enhanced agricultural practices are seen as more critical for sustainable economic advancement.