**1. Introduction**

"Once one starts to think about the human welfare consequences of economic growth, it is hard to think about anything else" [1]. Economic growth is the basis for increased prosperity, and its importance cannot be overstated. Barro and Sala-i-Martin [2] argue that continuous and sustained economic growth is important for improving the welfare of individuals and that aggregate growth is probably the single most important factor affecting individual levels of income. Due to the importance of economic growth, attainment of high economic growth rates is a major national objective of any country. It is, however, puzzling and at the same time worrisome that the riches of the world are so unequally shared among countries [3].

Over the years, growth performance has varied notably across regions and countries. In some economies, it has experienced major shifts over time. A few developing countries have experienced rapid growth yet some other countries have grown at only a stagnant rate. This discrepancy in economic growth among numerous countries and the dynamics of growth have become provocative research targets. The

main questions are why some countries are rich while others are poor, and what determines the rate of growth? Rosa notes that it seems certain that there is no allencompassing theory of economic growth, but different sources of economic growth can be observed to be relevant for different stages of economic development.

Several reasons have been provided that explain the differences, key among them being the fact that initial conditions differ greatly. Isaksson [4] asserts that some, if not many, of the differences in income per capita are human-created. He asserts that how a society and its production are organized can significantly explain the observed income divergence since the industrial revolution.

In the case of Uganda, the last five decades have been difficult in terms of overall economic growth and stability, let alone the first eight years after independence and the last three decades, when episodes of high yet unstable economic growth occurred, especially from the late 1980s to the late 2000s. Economic growth was impressive for the first eight years after independence, but by 1986, the economy had descended into a deep recession owing to poor governance from the early 1970s to that time. Since 1986, the country has undergone a major transformation from a "failed state" to one of the fastest-growing economies in the world. As early as 1993, Uganda started implementing structural adjustment programmes (SAPS) and other economic policies and programmes such as; economic recovery programme (ERP), medium-term expenditure framework, Plan for Modernization of Agriculture (PMA), and Poverty Eradication Action Plan (PEAP), among others all aimed at poverty reduction and attaining higher levels of economic growth in Uganda. The reforms ushered in relatively high economic growth rates based on incentives for private production. Between 1990 and 2010, GDP growth averaged 7.3 percent per annum, placing Uganda among the fastest-growing economies in the world and creating momentum for take-off. This growth was higher than the Sub-Saharan African growth rate, which averaged approximately 2.1 and was close to that of the East Asian and Pacific region of 7.9 and 6.6 percent, respectively.

To consolidate and accelerate this growth process, the Ugandan government approved the Comprehensive National Development Planning Framework Policy in 2007 which provided the developmental agenda for a 30-year vision to be implemented through three 10-year plans and six 5-year national development plans (NDPs), among other operational plans. However, data shows that Uganda's growth has been mostly unstable; it has been described as unsustainable because it has been sustained partly by significant aid inflows and only a few tradable commodities, such as coffee, flowers and fish. The government of Uganda, like many other governments elsewhere continues to target improving GDP growth. The key to achieving this improvement has been the careful development and implementation of policies and programmes to improve capital stock, labour stock, price stability and productivity and competitiveness as major drivers of economic growth [5].

Uganda has set its Vision 2040 as a guiding framework for transforming the country from "a peasant to a modern and prosperous country with a per capita income of USD 9,500 from the base figure of USD 506 in the year 2010 by the year 2040". For the country to achieve this transformation, Uganda Vision 2040 projects that Uganda's real GDP will have to grow at an average of 8.2 percent, while the IMF forecasts approximately 9 percent growth rate as necessary for the remaining period. However, the achievement of Vision 2040 has been threatened not only by lower-than-targeted rates of annual GDP growth since the inception of the vision but also by a recent slump from the average GDP growth rate of approximately 6.8 percent that was posted in the last half of the 2000s to an average of 4.6 percent between 2010 and 2015.

To achieve the Vision, understanding the determinants of past growth, removing the constraints on present growth and maximizing the prospects for future growth are key. It is important to note that inferring the determinants of growth

faces considerable uncertainty due to the existence of multiple overlapping theories that emphasize different channels of growth over time. Therefore, this paper aims at providing more robust and targeted policy interventions to generate higher and more sustainable economic growth by examining the determinants of economic growth in Uganda using the ARDL frameworks.
