KAMPALA, September 14, 2015 — Buoyed by the depreciating Shilling and the falling global oil prices, Uganda’s economy could continue the modest recovery and grow 0.4 percentage points faster in 2016 than in 2015. Uganda’s private sector has also played a critical role buffering external shocks and sustaining credit flows while Government’s infrastructure investments in the oil industry and railway did not take off as planned.
The latest and sixth edition of the Uganda Economic Update (UEU) published by the World Bank, writes that with the falling global prices of oil, the delay in oil production in Uganda could benefit the country as government uses more time to strengthen the policy framework for oil management. Tightening of monetary policy will minimize inflation and ensure stability, but will increase the cost of borrowing and hence reduce the rate of investment by the private sector.
Titled: “Searching for the ‘Grail’ - Can Uganda’s Land Support its Prosperity Drive?”, the update argues that alongside much needed infrastructure development, a more effective system of land governance, including for registering land, strengthening institutions for resolving disputes and urban planning, will boost productivity and transform livelihoods in Uganda.
“We hope the analysis and recommendations in this new report can help government review the current policies and their implementation with an eye to improve land administration and management in Uganda,” said Diarietou Gaye, World Bank Country Director for Eritrea, Kenya, Rwanda and Uganda. “Moreover, improved management of land can result into more efficient land use that can boost productivity while at the same time allowing people with weak land rights to benefit more from economic growth.”
Uganda’s rapidly expanding population is putting pressure on land usage, especially in urban areas. Current land policies have not supported efficient planning and development of urban areas and hence limited the pace at which the country can increase its productivity. The Update notes that most major cities across the world derive revenue from land to finance their infrastructure programs. Land value capture tools such as development fees, land auctions and property taxation based on market valuation are yet to be fully exploited in Uganda.
Approximately 20 percent of Uganda’s land is registered, which is higher than the average level of 10 percent for sub-Saharan African countries. Despite these better than average figures, security of land tenure in Uganda remains weak due to unclear property rights and a high rate of occurrence of disputes and conflicts. The Update commends government’s initiative towards accelerating the process of registration of land including that owned communally and by religious and cultural institutions. It recommends low cost technologies, such as that used in Rwanda to raise the proportion of land registered well beyond the current level.
Weak systems for land managements have also constrained urban planning and raised the cost of infrastructure development in the country. “With the fast growing urban population, Uganda needs to enforce the existing policies to promote better urban land management that will allow them to build livable cities. Key among these would include land value capture to finance urban infrastructure.” said Christina Malmberg Calvo, World Bank Country Manager for Uganda
The Update recommends points of action to hasten the reform process, including implementing the existing land policy agenda, accelerating the titling and registration of the remaining 80 percent of land, and redesigning the Land Fund to enhance its efficiency and equity in supporting resolution of overlapping rights.
The Uganda Economic Update is prepared by the World Bank in collaboration with government especially the Ministry of Finance, Planning and Economic Development, and concerned ministries.