Overview

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Context
Strategy
Results
Partners

Economic Overview
Uganda’s economy has grown at a slower pace recently, subsequently 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.
In the latter half of 2017 the economy grew, driven largely by growth in information and communications 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 remains a downside risk to growth, the income of poor people, 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.
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. 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.

Last Updated: Apr 12, 2018
Uganda halved poverty by 2015, surpassing the Millennium Development Goals (MDGs) target to eradicate extreme poverty and hunger. The country also made significant progress 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, the proportion of the population living in extreme poverty (on less than $1.90 a day) fell from 62.2% in 2002/03 to 34.6% in 2012/13, representing one of the fastest reductions in poverty in Sub-Saharan Africa. Good weather and favorable prices in international and regional markets increased real income from crops, allowing agricultural households to account for up to 79% of the poverty reduction during this period. Other key contributing factors included urbanization and education. However, the vulnerability of people falling back into poverty is very high; for every three Ugandans who get out of poverty, two fall back in, demonstrating fragile gains. Extreme poverty is concentrated in the north and east of the country, accounting for 84% of those living beneath the national poverty line.
Crop deceases, droughts, and price fluctuations present risks to food security. In 2016, the country experienced an acute food shortage, with as many as 1.6 million people becoming food insecure, and 9.3 million reported to be food stressed. 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% compared to 19%.)
Uganda is currently experiencing the fastest growing refugee crisis in the world. The country has received an average of 1,800 South Sudanese refugees daily since July 2016, and with a total refugee population of more than one million, Uganda is currently the largest host of refugees in Africa and the third-largest in the world. A United Nations-backed Solidarity Summit held in June 2017 has raised about $350 million to support refugees, and the IDA18 Sub-Window for Refugees and Host Communities provides US$2 billion of dedicated funding to help low-income countries hosting large numbers of refugees.
World Bank Group Engagement
The World Bank Group (WBG) Uganda Country Partnership Framework FY16-21 (CPF) supports the Government of Uganda’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 happen in 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 March 2018, the World Bank’s portfolio stood at $2.5 billion (IDA credits and grants) in net commitment for twenty-one national and six regional operations. Around two-thirds supports sustainable development, including 46% for infrastructure development (energy, roads, urban, and information and communications technology (ICT), followed by agriculture (14%), and water (7%). Nearly 30% supports human development (health 11%, education 9%, and social protection 7%); and 5% supports the private sector and trade.
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: Apr 12, 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: Apr 12, 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 WBG’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 World Bank and 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: Apr 12, 2018