Why Uganda remained in World Bank’s low-income category

Uganda has remained in the World Bank’s low-income category despite years of economic growth, underlining the difficulty of raising incomes faster than the population expands.

The government has in recent years said Uganda crossed the lower-middle-income threshold of more than $1,136 per person.

However, the World Bank still classifies the country as a low-income economy under its global income measurement system.

The World Bank’s latest Country Income Classifications, released on July 1, list Uganda among 25 low-income economies for the 2027 financial year.

Economies in this category have a Gross National Income per person of $1,175 or less. The World Bank calculated the figures using its Atlas method and economic data from 2025.

Uganda shares the lowest income bracket with the Democratic Republic of Congo, Ethiopia, Somalia, South Sudan, Sudan, Burundi and Malawi.

The classification covers 218 economies and will remain in effect until June 30, 2027.

Governments, investors and development agencies use the rankings to assess economic progress and determine access to low-cost development financing.

The World Bank said six countries entered higher income groups this year.

Togo moved from the low-income to lower-middle-income category after revised census figures reduced its estimated population by almost 12%. Its economy also grew by 5.9%.

Vietnam and the Philippines advanced after several years of broad economic growth.

Sri Lanka returned to lower-middle-income status as its economy recovered from the financial crisis of 2022.

Jordan moved up after revised statistics showed that its economy was almost 10% larger than earlier estimates. Micronesia also advanced after steady growth following the Covid-19 pandemic.

Uganda’s continued low-income status comes as the government pursues plans to expand the economy tenfold to $500 billion by 2040.

World Bank Senior Operations Officer Amanchi Jean-Noel Gogoua said Uganda would need annual economic growth of about 10% for the next 15 years to reach that target.

He made the remarks during the launch of the World Bank’s Country Partnership Framework for 2026 to 2035 and the Uganda Public Finance Review in Kampala.

The framework supports Uganda’s Vision 2040 and the government’s Tenfold Growth Strategy. It seeks to promote private sector growth and create more productive jobs.

Gogoua said Uganda had reached a crucial stage in its development, with commercial oil production expected to begin in 2027.

He described oil as a rare opportunity for the country to speed up economic transformation.

Uganda also has a young population. About 75% of its people are below the age of 30, while an estimated 650,000 young people enter the labour market each year.

However, the World Bank said major structural problems continue to limit income growth.

About 92% of Uganda’s workers operate in the informal sector.

The country’s Human Capital Index stands at 0.39. This means a child born today may achieve only 39% of their full productive potential because of weaknesses in education and health.

Uganda also faces infrastructure and public finance challenges.

Non-oil tax revenue stands at 13.5% of Gross Domestic Product, while only about 9% of Ugandans have access to the national electricity grid. Digital connectivity stands at about 50%.

The World Bank bases its classifications on Gross National Income per person rather than the total size of an economy.

Its Atlas method converts income into United States dollars while limiting the effect of exchange rate movements and inflation.

Population growth, economic performance and revisions to national statistics can also change a country’s ranking.

Uganda’s economy has continued to grow, with growth expected to exceed 6.5% as the country prepares to produce oil.

However, the rapid increase in the population has reduced the effect of economic growth on the average income of each Ugandan.

This has kept the country below the World Bank’s threshold for lower-middle-income economies.

The World Bank said income rankings remain an important measure of economic progress, although they cannot capture every aspect of a country’s development.

The number of low-income economies has fallen over the past four decades.

Since 1987, their share has declined from 30% of the world’s economies to 11%, although progress differs across regions.