Overview

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Context
Strategy
Results
Partners

Economic Overview
Uganda’s economy has grown at a slower pace recently, thus reducing its impact on poverty. Average annual growth was 4.5% in the five years to 2016, compared to the 7% achieved during the 1990s and early 2000s. The slowdown was mainly driven by adverse weather, unrest in South Sudan, private sector credit constraints, and the poor execution of public projects
However, the economy seems to have rebounded in the latter half of 2017, driven largely by growth in information and communication technology (ICT) services and favorable weather conditions for the agricultural sector. Real gross domestic product (GDP) growth is expected to be above 5% in 2018 and could rise further to 6% in 2019. This outlook assumes continued favorable weather conditions, robust external demand, an increase in foreign direct investment (FDI) inflows as oil exports draw closer, and capital spending executed as planned.
Reliance on rain-fed agriculture, however, remains a downside risk to growth, the poor’s income, as well as export earnings. Tax collections are below expectations and fiscal pressures are rising. Meanwhile, delays and poor management of the public investment program could prevent the productivity gains expected from enhanced infrastructure, while an acceleration in domestic arrears may have an adverse impact on private investment and further limit the extension of credit.
Finally, regional instability and a continued influx of refugees could undermine exports and disrupt growth in refugee hosting parts of Uganda. South Sudan and the Democratic Republic of Congo (DRC) are Uganda’s 2^nd and 4^th top export destinations. Potentially intensifying conflicts in these countries will negatively affect the growth of Uganda’s exports, which will also have implications for debt sustainability and the current account.
Political Context
Following the end of the armed conflict in 1986, the National Resistance Movement (NRM) led by President Yoweri Museveni introduced a number of structural reforms and investments, most of which led to a sustained period of high growth and poverty reduction between 1987 and 2010. Similarly, Uganda has introduced ambitious public-sector reforms in the past two decades. This has resulted in the creation of a robust formal governance system and has helped improve public sector management and institutional quality. Voice and accountability, which improved between 2003 and 2008, have since declined, however. Policy and legal frameworks continue to improve, notably through the Public Financial Management Act (2015), although gaps in implementation in procurement and anti-corruption remain.
Development Challenges
Uganda surpassed the Millennium Development Goals (MDGs) target 1a of halving poverty by 2015, and made significant progress in reducing the proportion of the population that suffers from hunger, as well as in promoting gender equality and empowering women. According to the Uganda Poverty Assessment, in 2013 more than a third of the population lived below the extreme poverty line of $1.90 per day. Moreover, vulnerability to falling back into poverty is very high—for every three Ugandans who get out of poverty, two fall back in, demonstrating the fragile gains. Estimates from the Uganda National Household Survey 2016/2017 suggest that the proportion of the population living below the national poverty line rose from 20% in FY2013 to about 21% in FY2017. All Uganda’s regions registered an increase in the number of poor persons with the notable exception of the Northern region, which is the poorest, and where poverty decreased from 44% to 33%.
With one-third of children under five stunted, Uganda is among the 20 countries worldwide with the highest prevalence of undernutrition. Stunting is nearly twice as high in rural compared to urban areas (36 percent compared to 19%). At 3%, Uganda’s annual population growth rate is among the highest in the world (albeit fertility rate is reducing). Uganda’s population of 35 million is expected to reach 100 million by 2050, while the annual urban growth rate of 5.2% is among the highest in the world and is expected to grow from 6.4 million (2014) to 22 million by 2040.
Uganda’s refugee population has almost tripled since July 2016 and is currently around 1.35 million, making it the largest refugee host in Africa, and third largest in the world. While its open-door refugee policy is one of the most progressive in the world, and refugees enjoy access to social services, land and can move and work freely, the continued influx is straining host communities and service delivery. A United Nations-backed Solidarity Summit held in June 2017 has raised about $350 million, but much more is needed to effectively support the refugees and the communities hosting them.

Last Updated: Nov 01, 2018
World Bank Group Engagement
The World Bank Group (WBG) Country Partnership Framework (CPF) for the period 2015/16 to 2020/21 supports the government’s vision of a society transformed from a peasant economy to a modern and prosperous country by 2040. The CPF was been prepared in close collaboration with the government, and is informed by consultations with civil society, private sector, academia, development partners, and the public. It recognizes the dynamic between rural and urban development where, in the short run, poverty reduction will come from rural areas. The focus in the medium term will shift towards urbanization and the creation of jobs for a rapidly growing labor force.
The investment portfolio in Uganda is primarily financed from the International Development Association (IDA), which provides interest free “credits” and grants on concessional terms, attracting only an administrative service charge of 0.75% on the disbursed credit amount. Loan repayments are stretched over 38 years, including a six-year grace period.
As of September 2018, the Bank’s portfolio stood at $3 billion (IDA credits and grants) in net commitment for twenty national and six regional operations. More than 70% of the investment is supporting infrastructure development, including in health, and education.
A key element of the CPF is the strong emphasis on beneficiary feedback, and on working closely with the government, stakeholders, and partners. This ensures the WBG is in a strong position to contribute towards shared prosperity and reducing extreme poverty in Uganda. Questions are welcome and can be sent to ugandainfo@worldbank.org.

Last Updated: Nov 01, 2018
Competitiveness and Enterprise Development Project (CEDP): The project has piloted the mass titling of land in selected regions. Thirteen regional land offices were established, enabling more people to register and title their land, increasing their security of tenure, and allowing landowners to use their land as an asset to access credit. Digitization of land ownership reduced the average time it takes to register to 42 days, down from 227 days in 2007. Registration costs are down to $23 per land parcel from $200 each. Government revenue from land registration increased by 308%, with monthly collections from land revenue quadrupling over three years—from $740,000 (2012/13) to $10.5 million (2016/17). Under the tourism component, 51 tour operators are now actively promoting Uganda as a tourist destination in the United Kingdom, up from 31 previously, while 20 are doing the same in the North American market.
Uganda Support for Municipal Development Project (USMID): Modern infrastructure has been developed in 14 municipalities, including roads and street furniture, solid waste management, and the development of markets and urban transport facilities. Local government officials in all 14 municipalities have also improved management and administration, including physical planning and urban development, own source revenue, and procurement and contract management. Computerized equipment for physical planning has been installed in 13 municipalities.
Reproductive Health Voucher Project: More than 200,000 vouchers have been sold in 25 districts in south-western Uganda and central-eastern Uganda, helping to increase access to skilled medical care during pregnancy and delivery for poor women in rural and hard-to-reach areas. By the end of March 2017, the project had provided qualified medical assistance for more than 43,000 births, including 31,000 normal deliveries, 6,500 assisted deliveries, and 5,600 C-sections, making private, for-profit health centers accessible to more women.
Water Management Development Project: Significant improvements and expansion of existing water supply infrastructure, sanitation and sewerage have been undertaken in Arua, Gulu and Bushenyi, and Katwe-Kabatoro, Kumi-Nyero-Ngora, Koboko, Rukungiri and Pallisa. Construction works for both water supply and sanitation facilities are at more than 80% complete, as is effort to improve water supply and sanitation coverage and living conditions in eight selected urban centres. To restore degraded areas in Mabira Forest, 660,000 indigenous seedlings have been planted.
Health Systems Strengthening Project: As many as 230 health facilities countrywide received medical equipment, eight hospitals were renovated, and an e-recruitment job bureau at the Health Service Commission was established. Scholarships have been provided to 797 health workers, with most of the beneficiaries pursuing diplomas and more than 400 having completed their studies.
East Africa Public Health Laboratory Project: The Uganda National Tuberculosis Reference Laboratory was supported to reach the gold standard ISO accreditation, and to qualify to serve as a prestigious WHO Supranational Referral Laboratory, only the second of its kind on the continent. In 2014, the laboratory was instrumental in providing diagnosis for containing the spread of the Ebola and Marburg outbreak.
Northern Uganda Social Action Fund: Now in its third phase, the project supports more than 43,000 households in business and income generating opportunities. During its previous phase, some 900 community projects were supported to undertake public works and community infrastructure. A total of 344 investment groups were formed, saving up to the Uganda shilling equivalent of $35,000. Under NUSAF2, the project collaborated with the Inspectorate of Government to design the Transparency, Accountability and Anti-Corruption (TAAC) initiative implemented by a consortium of NGOs, which successfully piloted Social Accountability and Community Monitoring within the project areas. The TAAC initiative, which cost $2 million, facilitated the 100% accountability of funds disbursed to community sub-projects.
Kampala Institutional and Infrastructure Development Project (KIIDP): Kampala Capital City Authority (KCCA) has increased institutional efficiency through a reduction of liabilities, an increase in KCCA own-source revenue, and an increased share of own-source revenue spent on service delivery. The Kira Road and Yusuf Lule-Acacia main junctions have been expanded and equipped to regulate traffic, improving the safety of motorists and pedestrians, and reducing travel time.

Last Updated: Nov 01, 2018
The International Finance Corporation (IFC)
As of December 2017, the IFC had commitments totaling to $295.7 million, of which $269.7 million was disbursed and outstanding, mainly in infrastructure. The IFC’s activities in Uganda are guided by the World Bank’s FY16-21 Country Partnership Framework (CPF). In line with this, the IFC, through investment and advisory interventions, is developing projects in infrastructure and the oil sector. The IFC has worked closely with the Bank and Multilateral Investment Guarantee Agency (MIGA) on private power generation and distribution projects and continues to collaborate closely within the World Bank Group (WBG) on renewable energy.
Since the 1960s, the IFC has approved funding for more than 50 projects in Uganda amounting to $1.5 billion. These investments have boosted the power supply, increased farmers’ revenues, and supported small and medium enterprises. The IFC’s advisory services focus on business environment, health, education, housing finance, and infrastructure.
Multilateral Investment Guarantee Agency (MIGA)
MIGA’s portfolio has a combined gross exposure of $146.2 million, primarily focusing on guarantees covering investments in energy infrastructure. MIGA also supported Sithe Global (USA) with guarantees of $120 million covering its equity investment in Bujagali Energy Ltd.

Last Updated: Nov 01, 2018