KAMPALA, Uganda — Uganda has retained its position among the world’s low-income economies despite years of steady economic growth, underscoring the challenge of translating headline GDP expansion into higher incomes for individual citizens.
The World Bank’s latest FY27 Country Income Classifications, published on July 1, places Uganda among 25 low-income economies for the 2027 fiscal year, based on a Gross National Income (GNI) per capita of US$1,175 or less, calculated using the World Bank’s Atlas methodology and 2025 economic data.
The classification means Uganda remains in the same income group as countries including the Democratic Republic of Congo, Ethiopia, Somalia, South Sudan, Sudan, Burundi and Malawi.
The annual rankings cover 218 economies and are widely used by governments, investors and development partners to assess economic progress and determine eligibility for concessional financing from international development institutions.
Why Uganda remains in the low-income category
Uganda’s continued classification does not necessarily indicate that the economy is shrinking.
Instead, the World Bank bases its income groupings on average income per person, rather than the overall size of an economy.
The indicator used is Gross National Income per capita, calculated in U.S. dollars using the Atlas methodology, which smooths the effects of inflation and exchange-rate fluctuations.
As a result, strong GDP growth alone is insufficient to move a country into a higher income category if population growth outpaces gains in average income.
Uganda has one of Africa’s fastest-growing populations, meaning the benefits of economic expansion are spread across an increasingly larger population.
Economists have long argued that rapid demographic growth, coupled with a large informal sector and relatively low labour productivity, continues to suppress growth in income per capita despite improvements in overall economic output.
Government pursuing ambitious growth agenda
Uganda’s latest World Bank classification comes as the government pursues its ambitious strategy of expanding the country’s economy to US$500 billion by 2040, supported by anticipated oil production, industrialisation and export growth.
The World Bank’s newly approved Country Partnership Framework (2026–2035) aligns with Uganda’s Vision 2040 and Fourth National Development Plan, focusing on private sector-led growth, job creation and productivity improvements.
Speaking during the launch of the framework in Kampala, World Bank Senior Operations Officer Amanchi Jean-Noel Gogoua said Uganda would need to sustain average economic growth of around 10% annually for approximately 15 years to achieve its long-term economic ambitions.
He described the expected commencement of commercial oil production in 2027 as a potential turning point for Uganda’s economy but cautioned that structural reforms would determine whether the country fully benefits from the opportunity.
Young population presents both opportunity and challenge
According to the World Bank, Uganda possesses one of the world’s youngest populations, with about 75% of citizens below the age of 30.
Between 600,000 and 700,000 young Ugandans enter the labour market each year, creating both an opportunity for accelerated growth and significant pressure to generate productive employment.
However, several structural constraints continue to limit income growth.
The World Bank estimates that roughly 92% of Uganda’s workforce operates in the informal economy, where productivity and earnings are generally lower than in the formal sector.
Uganda’s Human Capital Index also stands at 0.39, suggesting that a child born today is expected to achieve only 39% of their potential productivity because of gaps in health and education outcomes.
Infrastructure deficits remain another challenge, with electricity access, digital connectivity and domestic revenue mobilisation still below levels required to sustain rapid industrialisation, according to the Bank’s latest assessment.
Other countries moved up
While Uganda remained in the low-income category, six economies advanced to higher income classifications during this year’s review.
Togo moved from low-income to lower-middle-income status after revised census data reduced its estimated population and increased measured income per capita alongside economic growth.
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Vietnam and the Philippines advanced following years of sustained broad-based economic expansion, while Sri Lanka regained lower-middle-income status after recovering from its 2022 financial crisis.
Jordan’s reclassification followed a statistical rebasing exercise, while Micronesia also moved into a higher income group after steady post-pandemic growth.
Classification not the only measure of development
The World Bank emphasises that its income classifications should not be interpreted as a complete assessment of a country’s development.
Instead, they provide an internationally comparable benchmark based on income per person.
Other indicators—including poverty, inequality, education, health outcomes, employment and access to infrastructure—remain essential for measuring overall economic wellbeing.
Globally, the number of low-income economies has fallen significantly over the past four decades, declining from around 30% of countries in 1987 to approximately 11% today, although progress has varied widely across regions.
