IDEAS home Printed from https://ideas.repec.org/p/ags/eprcrs/113619.html

Sectoral and welfare effects of the global economic crisis on Uganda: a recursive dynamic CGE analysis

Author

Listed:
  • Twimukye, Evarist P.
  • Matovu, John Mary
  • Levine, Sebastian
  • Birungi, Patrick

Abstract

This paper analyses the impact of the global economic and financial crisis on Uganda notably on macro-economic aggregates, sectoral output and household welfare, and the potential role of fiscal policy and reform in mitigating the impacts. We find that second round effects from a reduction in financial inflows such as remittances, foreign direct investments and overseas development assistance, as well as reduction in international demand from cash crops such as cotton, tea and coffee, could lead to a reduction in economic growth by 0.6 percentage points on average annually over the period 2008- 2010 compared to a baseline reflecting pre-crisis conditions. A surge in regional exports and early counter-cyclical policies in particular are found to dampen the most adverse impacts of the crisis. The paper also shows that the impact of the government’s expansionary 2009/2010 budget could return growth to pre-crisis levels and illustrates how a re-prioritization of government expenditure away from expenditure on administration to more productive sectors of the economy, combined with reforms to improve the efficiency of public spending, could lift long-term growth and reduce poverty, especially in rural areas, even more.

Suggested Citation

  • Twimukye, Evarist P. & Matovu, John Mary & Levine, Sebastian & Birungi, Patrick, 2010. "Sectoral and welfare effects of the global economic crisis on Uganda: a recursive dynamic CGE analysis," Research Series 113619, Economic Policy Research Centre (EPRC).
    • Handle: RePEc:ags:eprcrs:113619
    DOI: 10.22004/ag.econ.113619
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/113619/files/series73.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.113619?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Thurlow, James, 2007. "Is HIV/AIDS undermining Botswana’s ‘success story’? implications for development strategy," IFPRI discussion papers 697, International Food Policy Research Institute (IFPRI).
    2. Kappel, Robert & Lay, Jann & Steiner, Susan, 2005. "Uganda: No more pro-poor growth?," Proceedings of the German Development Economics Conference, Kiel 2005 31, Verein für Socialpolitik, Research Committee Development Economics.
    3. H. Issa & B. Ouattara, 2008. "Foreign Aid Flows And Real Exchange Rate: Evidence From Syria," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(1), pages 133-146, June.
    4. Ms. Mwanza Nkusu, 2004. "Financing Uganda'S Poverty Reduction Strategy: Is Aid Causing More Pain Than Gain?," IMF Working Papers 2004/170, International Monetary Fund.
    5. Owen Barder, 2006. "Are the planned increases in aid too much of a good thing?," Working Papers 90, Center for Global Development.
    6. World Bank, 2007. "Uganda - Moving Beyond Recovery : Investment and Behavior Change, For Growth, Volume 1. Summary and Recommendations," World Bank Publications - Reports 7576, The World Bank Group.
    7. repec:zbw:ifwkie:3715 is not listed on IDEAS
    8. Ssewanyana, Sarah N. & Okidi, John A., 2007. "Poverty estimates from Uganda National Household Survey III, 2005/2006," Occasional Papers 54710, Economic Policy Research Centre (EPRC).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Buyinza, Faisal, 2011. "Performance and Survival of Ugandan Manufacturing firms in the context of the East African Community," Research Series 150477, Economic Policy Research Centre (EPRC).
    2. Benson, Todd & Matovu, John Mary & Pauw, Karl & Twimukye, Evarist & Wiebelt, Manfred, 2011. "Managing future oil revenue in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options," IFPRI discussion papers 1122, International Food Policy Research Institute (IFPRI).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lay, Jann, 2010. "MDG Achievements, Determinants, and Resource Needs: What Has Been Learnt?," GIGA Working Papers 137, GIGA German Institute of Global and Area Studies.
    2. Klaus Deininger & Daniel Ayalew Ali & Takashi Yamano, 2008. "Legal Knowledge and Economic Development: The Case of Land Rights in Uganda," Land Economics, University of Wisconsin Press, vol. 84(4), pages 593-619.
    3. Llambí, Cecilia & Laens, Silvia & Perera, Marcelo & Ferrando, Mery, 2008. "Assessing the impact of the 2007 Tax Reform on poverty and inequality in Uruguay," Conference papers 331810, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Sebele, Lesego S., 2010. "Community-based tourism ventures, benefits and challenges: Khama Rhino Sanctuary Trust, Central District, Botswana," Tourism Management, Elsevier, vol. 31(1), pages 136-146.
    5. Zhang, Wei-Wei & Sadiq, Ramla & Khan, Tahseen Mohsan & Khan, Muhammad Mohsan, 2021. "Policy implications of remittances, trade liberalization and Dutch disease – A comparative analysis based on income categorization," Resources Policy, Elsevier, vol. 72(C).
    6. Kabunga, Nassul S., 2014. "Improved dairy cows in Uganda: Pathways to poverty alleviation and improved child nutrition:," IFPRI discussion papers 1328, International Food Policy Research Institute (IFPRI).
    7. Radeny, Maren & van den Berg, Marrit & Schipper, Rob, 2012. "Rural Poverty Dynamics in Kenya: Structural Declines and Stochastic Escapes," World Development, Elsevier, vol. 40(8), pages 1577-1593.
    8. Pedro Martins, 2011. "Do large capital inflows hinder competitiveness? The Dutch disease in Ethiopia," Post-Print hal-00748067, HAL.
    9. Block, Paul J., 2007. "Integrated management of the Blue Nile Basin in Ethiopia: Hydropower and irrigation modeling," IFPRI discussion papers 700, International Food Policy Research Institute (IFPRI).
    10. Solome Kiribakka Bakeera & George Pariyo & Max Petzold & Sandro Galea & Wamala SP, 2012. "Associations between Socioeconomic Factors and Social Capital amongst Child Caregivers in Eastern Uganda," Review of Economics & Finance, Better Advances Press, Canada, vol. 2, pages 51-62, February.
    11. Kasirye, Ibrahim, 2007. "Vulnerability and Poverty Dynamics in Uganda, 1992-1999," MPRA Paper 8557, University Library of Munich, Germany.
    12. Lay, Jann & Golan, Jennifer, 2009. "The Impact of Agricultural Market Liberalisation from a Gender Perspective: Evidence from Uganda," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 20, Verein für Socialpolitik, Research Committee Development Economics.
    13. Farid Makhlouf & Mazhar Mughal, 2013. "Remittances, Dutch Disease, And Competitiveness: A Bayesian Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(2), pages 67-97, June.
    14. Benson, Todd & Matovu, John Mary & Pauw, Karl & Twimukye, Evarist & Wiebelt, Manfred, 2011. "Managing future oil revenue in Uganda for agricultural development and poverty reduction: A CGE analysis of challenges and options," IFPRI discussion papers 1122, International Food Policy Research Institute (IFPRI).
    15. Farid Makhlouf & Mazhar Yasin Mughal, 2013. "Remittances, Dutch Disease, and Competitiveness: a Bayesian Analysis," Post-Print hal-01884858, HAL.
    16. Justin Yifu Lin & Jianjun Xu, 2016. "Applying the Growth Identification and Facilitation Framework to the Least Developed Countries: The Case of Uganda," CDP Background Papers 032, United Nations, Department of Economics and Social Affairs.
    17. Baffes, John, 2006. "Restructuring Uganda's coffee industry : why going back to the basics matters," Policy Research Working Paper Series 4020, The World Bank.
    18. Rabhi, Ayoub, 2024. "Redefining the Monetary Landscape in the Sahel region in the Context of Morocco’s Atlantic Initiative," MPRA Paper 123863, University Library of Munich, Germany.
    19. Bussolo, Maurizio & Godart, Olivier & Lay, Jann & Thiele, Rainer, 2006. "The impact of commodity price changes on rural households : the case of coffee in Uganda," Policy Research Working Paper Series 4088, The World Bank.
    20. Berg, Andrew & Portillo, Rafael & Zanna, Luis-Felipe, 2015. "Policy Responses to Aid Surges in Countries with Limited International Capital Mobility: The Role of the Exchange Rate Regime," World Development, Elsevier, vol. 69(C), pages 116-129.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eprcrs:113619. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eprccug.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.