WHY DOES UGANDA EXPERIENCE A DIP IN GDP EVERY AFTER A GENERAL ELECTION IS CONCLUDED?
Why does Uganda experience a dip in GDP every after a general election is concluded?
Elections appear to be putting a burden on Uganda’s national economy because the country’s economy experiences a dip every time an election is concluded. Statistics on Uganda’s Gross Domestic Product (GDP) show a recession after each election cycle.
Uganda conducted its general elections in January this year and its GDP for the year 2021 is expected to reach $ 32.50 billion according to Trading Economics global macro models and analysts’ expectations.
In the long-term, the Uganda GDP is projected to trend around $ 34.00 in 2022, according to their econometric models. These figures are a decline from Uganda’s Gross Domestic Product (GDP) that was worth $ 37.37 billion in 2020 according to official data from the World Bank.
This assertion couldn’t be any further more accurate because data from the Uganda National Bureau of Statistics also cited in Bank of Uganda’s Financial Stability Report of June 2012, indicates that in Financial Year 2011/2012 – after elections, real GDP at market price grew by 3.2 percent, having fallen from 6.7 percent growth that was recorded in the preceding financial year (2010/2011).
The figure below illustrates that Uganda’s GDP dipped in the post-election financial years 2011/2012, 2016/27.
Source: Uganda National Bureau of Statistics
SecretsKnown argues that this situation is not coincidental, rather it is an attendant result of unregulated electoral spending that fermented into commercialization of politics which ACFIM stigmatizes as a threat to Uganda’s democratization process.
There are many factors to explain this among them, the undeniable effects of the Covid19 pandemic on the economy as well as the possibility of Bank of Uganda and the Ministry of Finance Planning and Economic Development relaxing their handle on macro-economic stability during the period of electoral campaigns.
This could also be attributed to the monetization of electoral politics increasing the volume of money in circulation to create a situation where there is too much money chasing few goods; or campaign money coming from outside the country to destabilize the economy