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Uganda Aims for Middle Income Status; Oil Revenue Management, Governance Vital to Growth

May 15, 2010

KAMPALA, May 15, 2010—Africa Region Vice President Obiageli Ezekwesili ended her visit to Uganda on May 4 with one clear message: Growth must double and corruption must be curbed if Uganda is to become a middle income country in the next 15 years.

The vice president expressed optimism that these goals could be achieved if Uganda efficiently manages its soon-to be-exploited oil resources and works toward attaining value for money in the public sector.

“I am here to tell you that it’s possible for Uganda to transform into a middle income country in the next decade and a half if you focus on improving the business environment; service delivery; and creating an enabling framework for value for money,” Ezekwesili said during a meeting with President Yoweri Museveni at State House in Entebbe.

“Mr. President, you need to accelerate these systems and ‘invest in investing’, as well as master the art of transforming oil revenues into physical and economic transformation,” she said.

In response, President Museveni assured Ezekwesili that his Government had carefully studied the best and worst experiences of oil-endowed countries and that Uganda was well equipped to maximize the benefits accruing from oil revenues.

“I wish to assure you that there is no possibility—absolutely no chance—that oil in Uganda can become a curse because it was ring-fenced to fund specific programs as opposed to consumer imports,” the President said. He emphasized that Uganda’s oil revenue would not be part of the national budget and would be used to fund programs in energy, transport, scientific research, and education.

Oil Revenue for Growth

During Ezekwesili’s one-day visit to Uganda, she also met with senior Government officials to discuss the Government’s preparedness for the management of oil, and the growth prospects that would transform Uganda into a middle-income country. While meeting with the Minister of Finance, Planning and Economic Development, Hon. Syda Bbumba, and other top Government officials, Ezekwesili promised that the World Bank would continue to support Uganda, especially with knowledge resources.

“The best resource the Bank can bring to Uganda, especially at such a time when you expect a lot of oil revenue, is our great knowledge….our investment in analysis is the best way we can partner with you to invest in inquiry of what would be the best solution to any issue; to help you focus on important policies that drive economic and social transformation,” said Ezekwesili.

Bbumba assured Ezekwesili of Uganda’s willingness to listen and learn.

“We are determined to move Uganda into middle income status,” she said. “We are working hard to make sure oil does not become a curse like it has been in other countries. We have been trotting the globe, looking at best and worst practices and we want to be good students.”

Acknowledging that Uganda had performed exceptionally well in maintaining macroeconomic stability over the last 20 years, Ezekwesili cautioned against complacency.

“Growth in itself is not good enough if it does not meet the economic needs of the people,” she said. “To be meaningful, growth must be broad-based, inclusive and shared.”

CSOs: Holding Government to Account

In a roundtable dialogues with civil society organizations, private sector, and the key accountability institutions, Ezekwesili used the opportunity to consult them on the Bank’s strategy in Africa and on how best to strengthen the governance and anti-corruption agenda.

She castigated civil society leaders who, she said, blame the Bank for not holding governments to account, and give undue criticism without being realistic about what role they can play.

“We will not substitute for you,” she told them. “Uganda is yours and you must think of creative ways to hold your leaders accountable. However, you must also be inward looking—who do you represent, who do you account to—because you should use the same measure on yourselves that you demand of others.”

Ezekwesili called on civil society organizations and the private sector to take the initiative of information sharing and not always wait for the Bank to act.

“Because our interests are the same, we need to identify things we can do together,” she said. “We need civil society organizations to take initiative for demand-side governance and we both must have analytical foundations for the governance agenda premised on the information we have.”

Ezekwesili’s visit to Uganda comes at the dawn of a new National Development Plan for Uganda, which forms the basis for the World Bank’s new Country Assistance Strategy. The strategy will be discussed by the Bank’s Board of Executive Directors this month.

Following her visit to Uganda, Ezekwesili attended the 20th World Economic Forum on Africa convened in Dar es Salaam, Tanzania, from May 5-7 under the theme, “Rethinking Africa’s Growth Strategy.”