Overview

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Context
Strategy
Results
Partners

Uganda’s economy has recently grown at a slower pace, reducing its impact on incomes and poverty reduction. 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 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 good weather, favorable external conditions to boost demand for exports and an increase in foreign direct investment (FDI) inflows as oil production draws closer, and capital investments 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. Potentially intensifying conflicts in South Sudan and the Democratic Republic of Congo (DRC), currently Uganda’s 2^nd and 4^th top export destinations, could negatively affect the growth of Uganda’s exports. Lower exports, taxes and overall growth, will 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 which 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 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.

Last Updated: Mar 25, 2019
Civil works on the 92-km long Vurra-Arua-Koboko-Oraba Road on the common border with the Democratic Republic of Congo, which was recently completed and upgraded from gravel to paved bitumen has increased trade between Uganda and the DRC. The North Eastern Road-Corridor Asset Management Project (NERAMP) with a commitment of $243.8 million is financing major works to upgrade the Tororo-Gulu-Kamdini road to unlock more cross-border trade and opportunities for local businesses.
The Regional Communications Infrastructure Program (RCIP): The project is extending the National Backbone Infrastructure (NBI) to provide fast and affordable internet across all major towns in Uganda, as well as government ministries, departments and agencies. This has promoted use of electronic platforms and communications greatly improving efficiency of day-to-day government operations through shared infrastructure for data storage and service delivery. ICT skills have been enhanced through training programs to facilitate job creation and trade.
Uganda Support for Municipal Development Project (USMID): The 14 municipalities benefitting from the project have been supported to develop modern infrastructure, 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.
Water Management Development Project
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 nearing completion, as is effort to improve water supply and sanitation coverage and living conditions in eight selected urban centers. Under the project, 660,000 indigenous seedlings have been planted to restore degraded parts of Mabira forest, the largest forest in Uganda.
Uganda Skills Development Project: As many as 311 grants have been allocated by the skills development fund to entities to provide on-job training and apprenticeships to 46,8000 youth beneficiaries. The Fund is implemented by the Private Sector Foundation of Uganda under the ministry of finance, planning and economic development.
Health Systems Strengthening Project: As many as 230 health facilities countrywide have received medical equipment, and an e-recruitment job bureau at the Health Service Commission has been set up. One regional referral hospital and eight general hospitals have been renovated across Uganda. Nineteen ambulances were delivered to 19 hospitals. Scholarships have been provided to 797 health workers, with most of the beneficiaries pursuing diplomas, and more than 400 already having completed their studies.
Reproductive Health Voucher Project: Through subsidised voucher plan, more than 165,000 pregnant mothers in rural and hard-to-reach areas have been able to access skilled medical care during pregnancy and delivery andtreatment for sexually transmitted infections provided to over 30,000 clients.
Northern Uganda Social Action Fund: Now in its third phase, the project is supporting more than 43,000 households to engage 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.
Uganda Multi-Sectoral Food Security and Nutrition Project: Demonstration gardens have been established in 1,000 government-aided primary schools to promote production and consumption of micronutrient-rich foods and utilization of community-based nutrition services. In these gardens, high iron beans, orange fleshed sweet potatoes and a variety of indigenous vegetables are grown. Another 2,000 demonstration gardens for lead farmers in the communities surrounding the beneficiary schools were established.
Competitiveness and Enterprise Development Project (CEDP): The project supports land administration reform, tourism and development of small and medium enterprises. Twenty-one regional land offices have been established and more people can register and title their land, increasing security of tenure, and allowing landowners to use their land as an asset to access credit. With the digitization of land ownership (more than 500,000 titles) it takes 42 days to register land, down from 227 days in 2006. Registration costs are down to $23 per land parcel from $200 each. The government raises $37.8 million annually from land registration fees. Business registration and property searches now take just one day, down from 50 days. Government revenue from business registration and licensing has risen from $1.8 million to $9 million per year. Under the tourism component, international tourist arrivals have increased by 53% from 945,000 in 2010 to 1,449,000 in 2018, while the number of tourists visiting national parks has increased by over 60% from 190,112 to 305,000.

Last Updated: Mar 25, 2019
Civil works on the 92-km long Vurra-Arua-Koboko-Oraba Road on the common border with the Democratic Republic of Congo, which was recently completed and upgraded from gravel to paved bitumen has increased trade between Uganda and the DRC. The North Eastern Road-Corridor Asset Management Project (NERAMP) with a commitment of $243.8 million is financing major works to upgrade the Tororo-Gulu-Kamdini road to unlock more cross-border trade and opportunities for local businesses.
The Regional Communications Infrastructure Program (RCIP): The project is extending the National Backbone Infrastructure (NBI) to provide fast and affordable internet across all major towns in Uganda, as well as government ministries, departments and agencies. This has promoted use of electronic platforms and communications greatly improving efficiency of day-to-day government operations through shared infrastructure for data storage and service delivery. ICT skills have been enhanced through training programs to facilitate job creation and trade.
Uganda Support for Municipal Development Project (USMID): The 14 municipalities benefitting from the project have been supported to develop modern infrastructure, 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.
Water Management Development Project
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 nearing completion, as is effort to improve water supply and sanitation coverage and living conditions in eight selected urban centers. Under the project, 660,000 indigenous seedlings have been planted to restore degraded parts of Mabira forest, the largest forest in Uganda.
Uganda Skills Development Project: As many as 311 grants have been allocated by the skills development fund to entities to provide on-job training and apprenticeships to 46,8000 youth beneficiaries. The Fund is implemented by the Private Sector Foundation of Uganda under the ministry of finance, planning and economic development.
Health Systems Strengthening Project: As many as 230 health facilities countrywide have received medical equipment, and an e-recruitment job bureau at the Health Service Commission has been set up. One regional referral hospital and eight general hospitals have been renovated across Uganda. Nineteen ambulances were delivered to 19 hospitals. Scholarships have been provided to 797 health workers, with most of the beneficiaries pursuing diplomas, and more than 400 already having completed their studies.
Reproductive Health Voucher Project: Through subsidised voucher plan, more than 165,000 pregnant mothers in rural and hard-to-reach areas have been able to access skilled medical care during pregnancy and delivery andtreatment for sexually transmitted infections provided to over 30,000 clients.
Northern Uganda Social Action Fund: Now in its third phase, the project is supporting more than 43,000 households to engage 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.
Uganda Multi-Sectoral Food Security and Nutrition Project: Demonstration gardens have been established in 1,000 government-aided primary schools to promote production and consumption of micronutrient-rich foods and utilization of community-based nutrition services. In these gardens, high iron beans, orange fleshed sweet potatoes and a variety of indigenous vegetables are grown. Another 2,000 demonstration gardens for lead farmers in the communities surrounding the beneficiary schools were established.
Competitiveness and Enterprise Development Project (CEDP): The project supports land administration reform, tourism and development of small and medium enterprises. Twenty-one regional land offices have been established and more people can register and title their land, increasing security of tenure, and allowing landowners to use their land as an asset to access credit. With the digitization of land ownership (more than 500,000 titles) it takes 42 days to register land, down from 227 days in 2006. Registration costs are down to $23 per land parcel from $200 each. The government raises $37.8 million annually from land registration fees. Business registration and property searches now take just one day, down from 50 days. Government revenue from business registration and licensing has risen from $1.8 million to $9 million per year. Under the tourism component, international tourist arrivals have increased by 53% from 945,000 in 2010 to 1,449,000 in 2018, while the number of tourists visiting national parks has increased by over 60% from 190,112 to 305,000.

Last Updated: Mar 25, 2019
The International Development Association funds the majority of Uganda’s $3 billion development portfolio.
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, 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: Mar 25, 2019