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Indicators of Convergence

According to the African Monetary Cooperation Programme, in order to achieve harmonization, the following criteria should be observed by at least 51% of the AACB membership:

Primary Criteria

  • Overall budget deficit (excluding grants) GDP ratio < 3%
  • Inflation rate < 3%
  • External Reserves ³ 6 months of goods and services

Secondary Criteria

  • Elimination of domestic arrears and non-accumulation of new arrears
  • Tax Revenue/GDP ratio ³ 20%
  • Wage bill/Total tax revenue < 35%
  • Public investments financed from internal sources > 20%
  • Maintainance of a positive real interest rate
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Real Sector

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Consumer Price Indices

Composite CPI For Uganda: Breakdown by Major Groups (Base: 1997/98=100)

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Index of Industrial Production

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National Accounts

Gross Domestic Product (GDP): Is the value of goods and services produced within the geographical boundaries of a country for a specified period of time, usually one year.

GDP at current prices: Is the value of goods and services measured at prices of the reporting period. The series is also usually referred to as being at nominal prices.

GDP at constant prices: Is the value of goods and services of a current year but determined using prices of a giver year or period, reffered to as a base or reference year. The series is also usually referred to as being at constant or real prices.

GDP at factor cost: Is the value of goods and services excluding indirect taxes on production such as sales tax, excise duties,etc

GDP at market prices: Is the value of goods and services including indirect taxes less subsidies on production, i.e prices paid by the final consumer of the goods and services.

Per Capita GDP: Is the average value of goods and services produced per person in the economy in a given period, usually one year. It is a measure of the relative welfare of the people in an economy.

Monetary and Non-monetary GDP
Goods and services produced in an economy may either be consumed directly or be marketed before being consumed. For purposes of ascertaining the total value of goods and services over the given period, in addition to the goods and services that are marketed (exchanged for money or other medium of exchange), we need to estimate the value of production that is not marketed, i.e. consumed directly by the producers. This production is very significant in most developing countries. Thus the marketed output is referred to as monetary while output that is consumed directly is referred to as non-monetary.

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External Sector

Balance of Payments is a statistical statement that summarises the economic transactions of an economy with the rest of the world.

Exports are the outward flows of goods leaving an economic territory of a country to the rest of the world.

Imports are the inward flows of goods entering the economic territory of a country from the rest of the world.

Trade Balance is the difference between total exports and total imports. Trade balance can either be favourable if exports exceed imports or unfavorable if imports exceed exports.

Services and Income
These are receipts and payments for services such as banking, insurance, freight, consultancy, etc, that economic units in an economy transact with the rest of the world. Income records receipts and payments in lieu of labour and financial assets and liabilities, e.g, interest on payments on external debt.

Current account balance is the sum of the trade balance, services & income and current transfers. It measures the change in an economy’s net foreign asset position arising from real transactions with the rest of the world.

Capital and Financial account
captures capital transfers, FDI , and other investments such as loans, securities, etc.

Overall balance
combines the Current account balance and the Capital & Financial account, items that are not considered to be financing items. It is an important indicator of the net external payments position of the economy.

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PDF icon External Sector History16.53 KB
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Government Finance

Government Finance is a summary of central government revenue and expenditure as compiled by the Uganda Bureau of Statistics. This data is compiled over the budget year (commonly referred to as fiscal year), which covers 12 months, from July of o­ne year to June of the next.

Revenue includes all compulsory, non-repayable or non-repaying receipts, requited or non-requited contribution exacted by government for public purposes.

Grants include non-repayable, non-requited and non-compulsory payments between government and international institutions.

Expenditure includes all non-repayable and non-repaying payments by government, whether requited or un-requited for recurrent or capital purposes.

Recurrent expenditure is all other expenditure other than for capital formation.

Development expenditure is expenditure o­n capital formation, acquisition of assets to be used in the process of production for more than a period of o­ne year.

Deficit or Surplus is revenue plus grants received minus expenditure. Deficit or surplus is also equal, with an opposite sign, to the sum of Financing.

Financing is the means by which government provides financial resources to cover the budget deficit or allocates financial resources arising from a budget surplus. Deficits are usually financed through external (by borrowing from abroad) or domestic (by borrowing from local residents and the banking system) sources.

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Money: Monetary Survey



This statement explains in brief, the sources of data used in and how money and banking statistics (commonly referred to as the monetary survey) is compiled in Uganda.


The monetary data currently compiled consists of the Central bank – Bank of Uganda, and 18 commercial banks, 3 of which are under liquidation. Data relating to the closed banks will o­nly be excluded upon completion of the liquidation process. Data for central bank is reclassified from the balance sheet that is produced monthly. o­n the other hand, the BS 100 report form for commercial banks is the main source of the data o­n commercial banks. This is also produced o­n a monthly basis.


a. Central bank balance sheet.
The process of compiling monetary data for the central bank is premised o­n the reclassification of the balance sheet into the following broad categories of aggregates;
1. Net Foreign Assets (NFA)
2. Net Domestic Assets (NDA)
3. Base money

NFA = External assets – Foreign liabilities.
NFA consists of the external assets of the central bank; the balances abroad and any investments, less the foreign liabilities. The latter consists mainly of Uganda’s liability to the IMF. Also of interest are the Foreign Reserves, which is the sum of balances in foreign currencies that are convertible and available for BOP transactions.

NDA = Claims o­n Central Government (net) + Claims o­n Public Entities + Claims o­n Private Sector + Claims o­n Commercial Banks + Other Items (net)
¨ BOU is the main banker of the Central government. As such, some government accounts will have credit balances and others will be overdrawn. The net of these accounts is the claim o­n or liability of BOU, as far as Government is concerned. In addition, BOU may be holding Government securities, and these are included in the calculation.
¨ Some parastatals have borrowed from BOU. This liability is recorded as a domestic asset of BOU.
¨ Claims o­n the private sector currently consist of overdrawn balances of Insurance companies etc. The sum is netted against non-bank, non-Government deposits.
¨ Claims o­n commercial banks consist of overdrawn transaction accounts, and other accounts related to the closed banks, Development Finance Department (DFD) loans and receivables as well as Administered Funds.
¨ Other items (net) consist of other assets and other liabilities of the central bank, which are not classified elsewhere. These include revaluation of assets, capital and reserves and the fixed assets.

Base money consists of currency issued by BOU and transaction balances of operating commercial banks and commercial bank investment in BOU instruments. It excludes the accounts of closed banks and balances o­n accounts into which amounts recovered from loans are deposited.

b. Commercial banks’ balance sheet
Similar to the Central bank, the data in the consolidated BS 100 form of commercial banks is reclassified into the following broad categories of aggregates;
1. Net Foreign Assets (NFA)
2. Net Domestic Assets (NDA)
3. Deposit Liabilities to the non-bank public

NFA = External assets – Foreign liabilities.
External assets of the commercial banks consists of their credit balances abroad, lending to non-residents (irrespective of currency) and any holding of foreign currencies in the vaults. Foreign liabilities are liabilities due to banks abroad, deposits of non-residents irrespective of currency, and administered funds from external sources.

NDA = Claims o­n Central Government (net) + Claims o­n Public Entities + Claims o­n Local Government + Claims o­n Private Sector + Claims o­n Bank of Uganda +Cash in vaults + Other Items (net)

  • Claims o­n the central government consist of any banks’ lending to the central government, holding of the Government securities, less the accounts of government in the banks.
  • Claims o­n public entities or parastatals consist of lending by the banks to these enterprises
  • Claims o­n the local government are the banks’ lending to the local government.
  • Claims o­n the private sector currently consist of loans to the resident private sector classified by currency of loan.
  • Claims o­n BOU is a net position of the banks’ balances at BOU as recorded in the BS 100 (both credit and overdrawn balances), and investments if any in BOU papers.
  • Cash in vaults of commercial banks in shillings.
  • Other items (net) consist of other assets and other liabilities of the commercial banks, which are not classified elsewhere. These include revaluation of assets, capital and reserves and the fixed assets.

Deposit liabilities to the non-bank public is the sum of foreign currency denominated deposits plus the shilling demand, time, savings and certificates of deposit (CD) of the resident private sector.

c. The monetary survey.
This is the sum of the aggregates in the two balance sheets. The NFA in both balance sheets is summed up, and the level of the foreign reserves of the central bank is reported separately.

NDA also sums up the corresponding components. But, the claims o­n each other net out as the Reporting Error in OIN.

Broad money - M3. This is derived as:
Currency in circulation derived as currency issued by BOU less cash in vaults of banks
+ Demand, time and savings deposits = M2
+ Certificates of deposits = M2A
+ Foreign currency deposits = M3
The aggregates in the monetary survey should balance viz, NFA + NDA = M3.

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Banking System

The Structure of the Banking Industry:
A brief history of Banking in Uganda

The banking industry in Uganda is composed of commercial banks and other financial institutions e.g. Housing Finance, Post Bank and the Central Bank.
Banking has existed since 1906 with the establishment of the National Bank of India which later became the Grindlays bank and is now known as the Stanbic bank. The East African Board was responsible for the issue of currency until 1966 when the Bank of Uganda was establishment by the 1966 Parliament Act.Standard bank was opened in 1912. Bank of Netherlands 1954 which later merged with Grindlays bank and Baroda was established in 1965.
The 1965 Parliament Act established the Uganda Credit and Savings bank which later became Uganda Commercial Bank.For a long time, the government owned banks or financial institutions dominated the banking industry. These include Uganda Development Bank which received all foreign loans and channeled them to the local companies for development; UCB, which handled the majority of the customers (and still does) with the biggest number of branches (about 67 in number) and the East African Development Bank which handled the East African Community business.
By 1970, Uganda had more than 290 commercial banks branches which reduced to 84 in the period between 1970 and 1980’s. The UCB owned a total of 50 branches out of the 84 branches.In the same way, the number of cheques being cleared and reduced from 5,400 in the 1960’s to 2,900 in 1973 and in 1983 the total number of cheques cleared had further reduced to 2,700. Today total number of cheques cleared has risen to an average between 5,000 and 6,000 per day.

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