Uganda’s Implementation of the Istanbul Programme of...

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Ministry of Finance Planning and Economic Development Uganda’s Implementation of the Istanbul Programme of Action Mid-term Review Report Structural Transformation for Post-2015 Development Agenda

Transcript of Uganda’s Implementation of the Istanbul Programme of...

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Ministry of Finance Planning and Economic Development

Uganda’s Implementation of the

Istanbul Programme of Action

Mid-term Review Report

Structural Transformation for Post-2015 Development Agenda

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UGANDA

February 2016

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UGANDA

i |Implementation of The Istanbul Programme of Action

Foreword

ganda joined the rest of the Least Developed Countries (LDCs) to sign and ratify the Istanbul Programme of Action 2011-2020 which was adopted by the Fourth United Nations (UN) Conference held between 9th – 13th May 2011 in Istanbul, Turkey. This

conference agreed to a resolution 65/280 that was later endorsed by the UN General Assembly on 17th June 2011. The overall goal of the Istanbul Programme of Action (IPoA) is to ‘overcome the structural challenges faced by LDCs in order to eradicate poverty, achieve internationally agreed development goals and enable eventual graduation from the LDC country category by 2020. Mid-way through the implementation of this Programme of Action, Uganda has already made significant progress in contributing to the attainment of this goal. The ratification of the IPoA came at a time when Uganda was transitioning from the Poverty Eradication Action Plan (PEAP) to a Comprehensive National Development Planning Framework that ushered in the Vision 2040 to be realized through the implementation of six National Development Plans (NDPs). The first NDP (2010/11-2014/15) was launched prior to the ratification of the IPoA. Aware of this, the second NDP (2015-2020) is being implemented to ensure alignment to this international dispensation. The Government of Uganda is grateful to the concerted efforts of our Development Partners, Private Sector, Civil Society, and all Ugandans for contributing to the successes already registered. Uganda has seen her population under the poverty line reduce from 24.5% in 2009/10 to 19.7% in 2012/13. During the same period, the poverty gap ratio shrunk from 6.8% to 5.2%. The proportion of Ugandans contributing to family workers’ total employment also rose from 74.4% to 78.9% over the same period. These improvements are at the backdrop of sustained real Gross Domestic Product (GDP) growth rate that has averaged 5.8% over the last 5 years. The implementation of the IPoA has also enabled Uganda to fast track the attainment of internationally agreed development goals notably the out-going Millennium Development Goals (MDGs 2000-2015). This has enabled the country to assess its performance and ready herself to the successor Sustainable Development Goals (SDGs 2015-2030). Uganda achieved six (6) of the MDG targets (under MDG 1, 6; and 8) namely: halving the proportion of the people below the poverty line, combating HIV/AIDS, malaria, and other diseases as well as developing a global partnership for development, respectively. I call upon all Ugandans and all our development partners to support the next phase of the implementation of this programme of action. Uganda still has structural challenges that the IPoA requires us to address mainly increasing our levels of productivity, reducing our trade imbalance through promotion of higher value exports and investing in our people’s health and education to enable them maximize their human and economic potential. My special thanks go t0 the United Nations Development Program (UNDP) for facilitating this mid-term review process. Hon. Matia Kasaija Minister of Finance Planning and Economic Development

U

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Acronyms and Abbreviations

AGOA Africa Growth Opportunities Act AIDS Acquired Immune Deficiency Syndrome BPoA Brussels Programme of Action CDP Committee for Development Policy CICS Competitiveness and Investment Climate Strategy COMESA Common Market for East and Southern Africa DRC The Democratic Republic of Congo DSS Decision Support System EAC East African Community ECOSOC Economic and Social Council of United Nations EMIS Education Management Information System EVI Economic Vulnerability Index EWS Early Warning System FAO Food and Agriculture Organization FDI Foreign Direct Investment FY Financial Year GDP Gross Domestic Product GNI Gross National Income GoU Government of Uganda HAI Human Assets Index HIV Human Immunodeficiency Virus HMIS Health Management Information System IC Income Criterion IPoA Istanbul Programme of Action LDCs Least Developing Countries MDGs Millennium Development Goals MoES Ministry of Education and Sports MoES Ministry of Education and Sports MoFPED Ministry of Finance Planning and Economic Development MoGLSD Ministry of Gender Labour and Social Development MW Megawatts mWh Megawatts per Hour N/A Not Applicable NDP National Development Plan ODA Official Development Assistance OHRLLS Office of the High Representative for Least Developing Countries and

Small Island Developing States PEAP Poverty Eradication Action Plan SAGE Social Assistance Grants for Empowerment SDGs Sustainable Development Goals UBOS Uganda Bureau of Statistics UDHS Uganda Demographic Health Survey

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UN United Nations UNDP United Nations Development Programme UNICEF United Nations Children Emergency Fund UPE Universal Primary Education USE Universal Secondary Education

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Table of Contents

Foreword ............................................................................................................................ i Acronyms and Abbreviations ............................................................................................. ii Chapter 1 Background to the Istanbul Programme of Action ......................................................... 1 Chapter 2 Status of Uganda’s Performance against the LDC Graduation Criteria .......................... 3 Chapter 3 Alignment to National Planning Processes .................................................................. 14 Chapter 4 Challenges and Opportunities for Uganda ................................................................... 23 Chapter 5 Post 2015 Agenda: Uganda’s Implementation Traction for Graduation by 2020 .......... 28 Annex 1: References ....................................................................................................................... i

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Executive Summary

In 2011, Uganda became a signatory to the Istanbul Programme of Action (IPoA) – a commitment alongside 47 other Least Developed countries (LDCs) as well as the rest of the world with a purpose

to overcome the structural challenges faced by the least developed countries in order to eradicate poverty, achieve internationally agreed development goals and enable graduation from the LDC category by 2020. Under IPoA, LDCs are expected to make progress in areas that are critical for structural transformation and improvement in their productive capacities in areas such as in science, technology and innovation, and investment promotion. LDCs are required to make strategic investments in human development and trade promotion with a keen focus on increasing agricultural production and value of exports. All these would require alignment of their national planning processes to the IPoA. It is the aspiration of this process that these investments would propel LDCs to achieve graduation out of the LDC category by 2020. This graduation follows three sets of criteria as below listed: i. Income criterion (IC), based on a three-year average estimate of GNI per capita for the

period 2011-2013. The threshold is $1,035 for inclusion and above $1,242 for graduation based on where countries are by the 2015 triennial review.

ii. Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of population undernourished; (b) health: mortality rate for children aged five years or under; (c) education: the gross secondary school enrolment ratio; and (d) adult literacy rate.

iii. Economic Vulnerability Index (EVI) based on indicators of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries; (e) share of population in low elevated coastal zones; (f) instability of exports; (g) victims of natural disasters; and (h) instability of agricultural production.

Basing on Income criterion, Uganda will most unlikely double the current rate of GNI per capita to reach the $1,242 (which is an equivalent of GDP per capita of $1,033) – the threshold for graduation. Uganda does not use the GNI per capita for assessment of its economic development trends but a close proxy – GDP per capita currently stands at $686 (with lower estimates of $583 due to the 15.5% loss in the devaluation of the shilling against the US Dollar over the last year and half). On the second criterion, Uganda will over the medium term increase investment in social sectors to improve its human development index. This investment will further extend adult literacy (now at 74%), reduce malnutrition (with 33% of children stunted and 12% of women undernourished), reduce disparity between girl and boy child enrolment in primary and secondary education; and address mortality among children under-5 with a focus on malaria prevention and fighting anemia and pneumonia – which are the leading causes of infant and child mortality. On the third criterion, Uganda has prioritized 12 key commodities to reduce over-dependence on coffee, tea and tobacco (whose prices have reduced globally) as traditional export earners. Besides, the ratio of manufactured exports as a proportion of total exports rose from 6% in 2012 to 8.5% in 2015. If sustained, this will improve the country’s balance of payments position in order to score higher on the EVI criterion. Emphasis is needed on further value-addition and conclusion of the Doha round table trade negotiations. Finally, for Uganda to graduate out of the LDC category, more focus has to be put on human capital development in order to improve the quality of our population. The current structure of the population presents both a dividend in terms of labor and market but this can only be realized if Uganda has a productive population with skills needed on

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the job market, more investments in increasing productivity through entrepreneurship development and boosting firm level capabilities.

Table 1: Assessment of Uganda’s Performance at mid-term of IPoA and Graduation Likelihood Criterion Indicators Performance

against the IPoA thresholds or scores

Overall Three step criteria assessment

Likelihood of Graduation by 2020 using the traffic lights methodology

Income criterion GNI Per capita (by 2014) $663 ($1,242) $663 compared to

($1,242 threshold)

Not likely

Human Assets Index

Under 5 Mortality Rate (NPHC 2014)

80 (66)

53.6 Compared

to 66 threshold for LDCs

Less Likely

Population Malnourished (%) (FAO 2013)

25.7 (65.5)

Gross Secondary School enrolment ration (EMIS, 2013/14)

26.9 (18.7)

Literacy Rate (MoES 2015) 74 (64.3)

Economic Vulnerability Index

Population (UBOS 2014 census) 34.9 (34.9)

31.8 Compared

to 32.0 threshold for LDCs

Likely

Remoteness (%) World Bank 2015

67.6 (72)

Merchandise export concentration (UN Fact sheet 2015)

0.2 (11.3)

Share of Agriculture (MoFPED 2014/15)

27.5 (44.9)

Population in coastal areas N/A

Instability of exports of goods and services (UN Fact Sheet 2015)

14.6 (31.9)

Victims of natural disasters (UN Fact Sheet 2015)

0.87 (67.9)

Instability of agricultural production (UN Fact Sheet 2015)

2.8 (7.2)

OVERALL ASSESSMENT Less Likely to Graduate by 2020

As Uganda moves on with the implementation of the post 2015 agenda, focus will be on sustaining investments in energy and infrastructure, appropriate focus on social sectors, and more strategic investments in agriculture, tourism and mining (including oil and gas). Government is aware of the need to pay more attention to the challenges of ensuring a higher-than-current level of absorptive capacity and building systematic capabilities to innovate and implement with greater level of productivity both in the public and private sectors. The country is poised to achieve higher ratings under the IPoA due to the current budgetary planning earmarking resources to primary growth sectors as identified in the first NDP and on account of better alignment of NDP II with the IPoA. These include gradual increment in allocation to the health and education sectors. Lastly, the focus in increasing labor productivity will be vital to Uganda’s economic growth. Further spending on skills formation, innovation and firm productivity is imperative in the medium term.

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1 Mid-term Review of Implementation of the Istanbul Programme of Action

Chapter 1

Background to the Istanbul Programme of Action

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1 Mid-term Review of Implementation of the Istanbul Programme of Action

Chapter 1: Background to the Istanbul Programme of Action (IPoA)

1.1 Background to the Istanbul Programme of Action (IPoA)

he 2000 Millennium Declaration that ushered in the MDGs was a broad framework that stipulated roles of both developed and developing countries in fast tracking the achievement of targets under these goals. This would require national commitment and a

Programme of Action against which countries would align their planning and budgetary processes. The Brussels Programme of Action (2001-2010) was hence put in place basing on analytical work by the Office of the High Representative for Least Developing Countries and Small Island Developing States (OHRLLS) to achieve this purpose. The BPoA was a framework for partnership to ensure that countries met key seven (7) commitments: fostering a framework for people-centered policy; good governance; building human and institutional capabilities, ensuring that globalization works for LDCs by building productive capacities; enhancing the role of trade in development; reducing vulnerability and protecting the environment as well as mobilizing financial resources. After series of reviews of reports on the implementation of the BPoA in January 2010, OHRLLS under an Asia Pacific Review and an Africa Regional Review set up a process that culminated in the Istanbul Programme of Action IPoA (2010-2020) which succeeded the BPoA. The IPoA builds on the BPoA but in addition has set up a three-tier graduation process where LDCs that met a defined criteria of performance would eventually graduate from the LDC status to medium income country status by 2020. It provides the needed pressure that is now exerted on LDCs to align their plans towards a path of structural transformation through meting key human and economic development targets. It also serves as a reward mechanism to good performing countries.

1.2 Overall Goal, Objectives and Principles of the IPoA

The overall goal of the IPoA is to “overcome the structural challenges faced by the least developed countries in order to eradicate poverty, achieve internationally agreed development goals and enable graduation from the LDC category by 2020”. The specific objectives of the IPoA are tailored to support countries both developed and (at least half) of least developed to graduate from the LDC category by 2020. These objectives include the following: i. To achieve sustained, equitable and inclusive economic growth in least developed

countries, to at least the level of 7 per cent per annum, by strengthening their productive capacity in all sectors through structural transformation and to overcoming their marginalization through their effective integration into the global economy, including through regional integration;

ii. To build human capacities by fostering sustained, equitable and inclusive human and social development, gender equality and the empowerment of women;

T

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iii. To reduce the vulnerability to shocks of least developed countries to economic, natural and environmental shocks and disasters, as well as climate change, and enhance their ability to meet these and other challenges through strengthening their resilience;

iv. To ensure enhanced financial resources and their effective use for least developed countries’ development, including through domestic resource mobilization, ODA, external debt relief, foreign direct investment and remittances; and

v. To enhance good governance at all levels, by strengthening democratic processes, institutions and the rule of law; increasing efficiency, coherence, transparency and participation; protecting and promoting human rights; and reducing corruption, and strengthen least developed country governments’ capacity to play an effective role in their economic and social development.

Guiding Principles In addition to the above goal and objectives the IPoA spells key guiding principles that were based on building a sustainable development partnership where developed and developing countries worked together in a manner that fast tracks attainment of both the above objectives and the realization of the overall goal. These principles include: i. Ensuring country ownership and leadership; ii. An integrated approach that promotes policy coherence and consistency with

international economic, financial and trading systems; iii. Promoting genuine partnership and solidarity with enhanced global support and

mechanisms at all levels for the achievement of the IPoA goals and objectives; iv. Focusing on a Result orientation where monitoring and assessment of progress under

the IPoA contribute to enhancing mutual accountability and effectiveness of development cooperation;

v. Ensuring peace and security, development and human rights, as pillars of the United Nations system and the foundation for collective security and well-being;

vi. Ensuring Equity at all levels is indispensable for the pursuit of long-term prosperity; vii. Supporting voice and representation through an international system that supports

inclusive growth and effective participation for all and at all levels; viii. Balancing the role of the state and market considerations, where every Government

commits to design policies and institutions with a view to achieving sustainable and inclusive economic growth that translates into full employment, decent work opportunities and sustainable development.

1.3 Themes and Priority Areas of Action

There are eight (8) themes under this protocol that are priority areas of action. Overall, LDCs are expected to make progress in areas that are critical for structural transformation and the productive capacity such as in science, technology and innovation, and investment promotion. Secondly the LDCs are expected to align their national planning processes and ensure incorporation of the goals and prioritization of the IPoA, including strategies to achieve graduation out of the LDC category by or around 2020. LDCs would then implement key strategies put in place to meet the graduation criteria based on the eight priority areas of the IPoA. These include the following:

i. Increasing the productive capacity in key sectors: infrastructure; energy; science, technology and innovation and private sector development;

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ii. Supporting agriculture, food security and rural development; Is there a reason why this priority is not elaborated

iii. Enhancing trade; with an emphasis on integrating trade and trade capacity building policies into national development strategies; improving productivity and competitiveness, diversification of production bases and export products and markets to non-traditional destinations as well as increasing the transparency of institutions to better facilitate trade and improve standards;

iv. Focusing on key commodities through establishing and strengthening (as appropriate) the national commodity management strategies and sector specific policies and measures to enhance productivity as well as vertical diversification and ensure value addition and value retention;

v. Investing in human and social development with a focus on education and training; population and primary health; youth development; shelter; water and sanitation; gender equality and empowerment of women; social protection;

vi. Putting in place a mechanism to address multiple crises and other emerging challenges: economic shocks; climate change and environmental sustainability; disaster risk reduction;

vii. Mobilizing financial resources for development and capacity-building: domestic resource mobilization; official development assistance; external debt; foreign direct investment and remittances; and

viii. Ensuring good governance at all levels including fostering a just, transparent and a well-functioning government accountable to the people and one that promotes access to an independent judicial system; and ensures an environment conducive to social economic development.

Finally, Uganda was to ensure that under the post-2015 Development Agenda and other global processes effort is done to link the IPoA and Uganda’s overarching development strategy, with a view to determining how this linkage will lead to inclusive development, and ultimately graduation by 2020.

1.4 The IPoA Inclusion and Graduation Criteria 1.4.1 Inclusion Criteria The specific processes under the inclusion criteria include the following: i. Acceptance to be Categorized: Interested governments formally participate in this

process of categorization and the UN Secretariat of Department of Economic and Social Affairs (DESA) then notifies the country of the eligibility finding.

ii. The Committee for Development Policy (CDP) which is a subsidiary body of the United Nations Economic and Social Council then reviews the status of each LDC for the purpose of monitoring their progress and eventual graduation and submits inclusion recommendation to the Economic and Social Council of United Nations (ECOSOC).

iii. ECOSOC endorses the recommendation by the CDP iv. The Country then notifies the UN Secretary General on its acceptance v. The General Assembly takes note of this formal submission and notes the ECOSOC

recommendation and vi. Inclusion then takes immediate effect

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1.4.2 Graduation Criteria Graduation from LDC status is reached based on a three-fold assessment criteria: i. Gross National Income based on a three-year average estimate of GNI per capita for the

period 2011-2013 using the World Bank Atlas method (under $1,035 for inclusion, above $1,242 for graduation as applied in the 2015 triennial review).

ii. Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of population undernourished; (b) health: mortality rate for children aged five years or under; (c) education: gross secondary school enrolment ratio; and (d) adult literacy rate.

iii. Economic Vulnerability Index (EVI) based on indicators of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries; (e) share of population in low elevated coastal zones; (f) instability of exports; (g) victims of natural disasters; and (h) instability of agricultural production.

1.5 Rationale for the Mid-Term Review

Undertaking a mid-term review of the IPoA is part of the fulfilments of the implementation of this international commitment. The mid-term review provides information of how far Uganda has progressed since 2010 when the IPoA came into effect and the likelihood of graduation out of the LDC category by 2020. This presents aspects where improvement and therefore more is required against the three-tier graduation criteria as a guide to planning and budgeting framework both at the sector levels and more broadly under the NDP process. The mid-term review also presents challenges as well as opportunities that Uganda can leverage to enhance its performance under each of the eight (8) priority areas of the IPoA. This report also makes recommendations for Uganda’s post 2015 agenda to fast-track the attainment of results to meet the graduation criteria out of the LDC category by 2020.

1.6 Why Graduation out of the LDC Category is important for Uganda Uganda’s Vision 2040 envisages that Uganda would have graduated from low income to a medium income country by 2017 to reach a GDP per capita of US dollars 9,500 by 2040 (Vision 2040 paragraph 10). As ambitious this it, it remains the target. Participating in processes like the IPoA presents Uganda an opportunity to focus public investments where it needs to improve. Already this review has shown that more needs to be done to improve on aspects like nutrition, child mortality and export diversification and value addition. Graduation out of the LDC category would complete the first phase of transitioning from the focus on poverty reduction to development which is the critical to realizing vision 2040.

FACT NOTE: Botswana, Cape Verde, Maldives and Samoa graduated out of the LDC Category under

IPoA in 2015. Under the 2018 review, Bhutan, Sao Tome and Principle, Solomon Islands,

Timor-Leste and Nepal are on course to graduate

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3 Mid-term Review of Implementation of the Istanbul Programme of Action

Chapter 2

Status of Uganda’s Performance against the LDC Graduation Criteria

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Chapter 2: Status of Uganda’s Performance

2.1 Uganda Today Structure of Uganda’s Population With a population of 34.2 million people and one that has risen by 44% since 2002, Uganda is one of the fastest growing countries in the world with an annual population growth rate of 3% per annum. It also has the youngest population in the world with 57% of the population below 18 years (UBOS, 2012/13 estimates). Most of Uganda’s population (60%-70%) is primarily engaged in agriculture and nearly 80% of it resides in the rural areas. However, agriculture is a declining source of income with only 26% of population relying on it as their sole source of income. Private non-agricultural wage employment is growing at 12% per annum and is highly concentrated in urban areas. Being food secure and trading within the region, Uganda remained resilient to the global economic slow-down of 2008. Uganda continues to be an active player in the East African Community (EAC) and the Common Market for East and Southern Africa (COMESA) and other regional trade blocks. Uganda’s Economic Performance Uganda has maintained strong economic performance over the last two decades averaging 5.8% per annum above sub-Saharan Africa average. However, foreign exchange volatility presents a serious challenge to Uganda’s macroeconomic stability. This is coupled with economic challenges in the developed world that has prolonged the weak demand for Uganda’s exports; low prices for coffee and tea – her main exports and the depreciation of Uganda shilling particularly in the last two years. The table below is a synopsis of key facts and figures on Uganda’s development trends.

Table 2: Uganda Facts and figures

Indicator Baseline Current Status

Population 24.2million (2002) 34.6 million (2014)

GDP Growth Rate 5.9% (2011/12) 5.4% (2015/16)

Population below poverty line 24.5% (2009/10) 19.7% (2012/13)

Life expectancy at birth (years) 51.5 (2009/10) 63.3 (2014)

Maternal Mortality Ratio 438 per 100,000 (2011) 360 per 100,000 (2013)

Infant Mortality Ratio 76 per 1,000 (2006) 53 per 1,000 (2014)

Literacy Rate 76% (2010) 74 (2015)

HIV/AIDS prevalence 6.3% (2004/05) 7.1% (2011/12)

Current account balance % GDP -10.4 (2011) -7.5 (2014)

Inflation 30.5% (2011) 4.3% (2015)

ODA to GDP Ratio 11.3% (2003/04) 2.7% (2013/14)

Internet Use 1.1% (2004) 21.6% (2011)

Cellular Subscribers 4.5% (2004) 51.9% (2011)

Source: MDG Report 2015, UBOS Database

Uganda’s inflation has been managed by a combination of monetary and fiscal policies and measures to address spikes in headline inflation and a strong dollar. In light of these difficult times, the banking sector has had to do with high interest rates which has cut back on lending and

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contracted many aspects that would ideally expand the productive sectors. Uganda continues to rely on her development partners for grants and concessional loans to finance key public investments especially in energy, roads and rail infrastructure. The level of reliance is however declining with the share of national budget financed from domestic sources rising from 48% in 2002/3 to 82% in 2014/15. Nonetheless, Uganda has maintained sustainable debt levels with liquidity and solvency indicators well below standard thresholds of 55%. This presents Uganda an opportunity to adopt an expansionary fiscal policy for ambitious investments as elaborated in her Vision 2040.

2.2 Status of Uganda’s Performance

he thrust of Uganda’s participation in the IPoA process is to graduate from LDC to lower Medium Income Country status in line with the Vision 2040. This section presents an assessment of the status of Uganda’s performance against the UN’s graduation criteria:

Income; the Human Assets Index and the Economic Vulnerability Index criteria

2.2.1 The Income criterion Uganda’s GDP grew (at current market prices) from US$12.5 billion in 2010/11 to an estimated US$21.2 in 2014/15 (MoFPED, 2015). However, the overall GDP growth rate reduced from a high of 9.7% in 2010/11 to 4.5% in 2013/14 as shown in Fig 1 below. Uganda’s economic growth record over the last decade has also been comparable to that of its regional peers, especially the East African member states.

Figure 1: Overall GDP Performance

Source: Uganda Today Bulletin 2014

Official per capita income figures for Uganda are presently derived based on Gross Domestic Product (GDP) as opposed to Gross National Index (GNI) as required under the IPoA assessment. The difference is that while GDP per capita measures national output or expenditure per year per national; GNI per capita measure this same level of output by only residents of that country (plus any product taxes, and net receipts of primary income from abroad).

T

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Uganda’s GDP per capita in FY 2013/14 was US$686 compared to a GNI per capita of $643. GDP per capital in FY 2014/15 is however likely to reduce on account of the large depreciation of shilling against the United States dollar (21.5%) that Uganda registered in FY 2014/15.

The IPoA income criterion takes the average of a country’s GNI per capita over the latest three-year period based on the World Bank Atlas method (under $1,035 for inclusion, above $1,242 for graduation as applied in the 2015 triennial review). According to the estimate of the UN under IPoA criteria, Uganda’s GNI average of the latest three years stands at US $635 about half of the threshold for graduation (US$1,242)

Table 3: GNI Per Capita Trends in Uganda

UGANDA 2011 2012 2013 2014 2015 IPoA Graduation Threshold

GNI per capita $610 $630 $630 $670 $635 $1,242

Source: World Bank Atlas http://data.worldbank.org/country/uganda January 2 2016

2.2.2 Human Assets Index (HAI) The second graduation criterion is based on five human development outcome indicators: nutrition where reporting is made against the percentage of population undernourished; health with a focus on mortality rate for children aged five years and education focusing on the gross secondary school enrolment ratio and adult literacy rate as all shown in the fig.2 below.

Fig:2 Human Assets Index criterion and assessment indicators

A Nutrition Malnutrition remains a challenge for Uganda. According to UNICEF statistics, 33% of Ugandan children aged under 5 years (2.3 million children) are undernourished. This share stands at 12% among women. Anemia prevalence stands at 49% among children under 5% and 23% of women

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7 Mid-term Review of Implementation of the Istanbul Programme of Action

of reproductive age. According to the World Bank Atlas referenced for this valuation, the proportion of Ugandans that are undernourished stands at 25.7% and the target is to reduce this substantially by 2020. However, Uganda has made gains in addressing the challenge of malnutrition within the context of its Food and Nutrition Policy of 2003 and its implementation strategy (2005). In 2011, Uganda launched the Uganda Nutrition Action Plan whose purpose was to scale up multi-sectoral efforts and to establish a strong nutrition foundation for Uganda’s development. As part of this process, Uganda is now elaborating a new policy and strategy on nutrition for the period 2016-2021. B: Under 5 Child Mortality Rate Uganda has achieved significant progress in reducing under-5 child mortality rate with death per 1,000 children reducing by 40% in half a decade, between 1995/6 to 2011/12 from 152 per 1,000 to 90 per 1,000 in 2011 (UDHS, 2011) as shown by Fig.3. Latest census results put this figure at 80 per 1,000, signifying an improvement but not big enough meet its MDG target of 54 deaths per 1,000 children. There are three main causes of child mortality in Uganda: malaria which is the leading cause of infant deaths and all Ugandans in general; pneumonia and anemia are the other causes accounting for 12.4% and 12.2 % respectively of child deaths (MDG report, 2015).

Fig 3: Trends in reducing child mortality

Source: UDHS 2011 C: Education Uganda started by implementing a Universal Primary Education programme followed by Universal Secondary Education to lift the profile of literacy in Uganda. The government had realized that ensuring attendance in secondary education will require support to primary level education. Since UPE got underway in 1997, enrolment has risen three fold from 2.7million children in primary school to 8.5million in 2014, and gender gap has been eliminated. Secondary school enrolment has correspondingly risen from 814,087 in 2007 to 1,362,739 in 2014 narrowing the gender gap from 72.7% in 2006 to 88.3% in 2014 as shown in Table 4 below.

156152

137

90

0

20

40

60

80

100

120

140

160

180

1995/96 2001/02 2005/06 2011/12

Under 5 mortality rate per 1,000 livebirths

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8 Mid-term Review of Implementation of the Istanbul Programme of Action

Table 4: Performance of the sector mid-way through NDP 1 Outcome Indicator NDP

Baseline

2008/09

Actual

2010/11

Actual

2011/12

Actual

2012/13

Actual

2013/14

Actual

2014/15

Net enrolment rate primary (%) 93.2 97.5 95.5 95.3 93.7 97

Net enrolment rate secondary (%) 23.5 25 23.2 24.7 25.1 26

Net completion in secondary (%) 35.0 41.1 N/A

Pupil - teacher ratio in primary 53 47 46 46 46 46

Pupil classroom ratio in primary 72 58 58 56 57 58

Student – teacher ratio in secondary 18 / 19 19 23 21 21 22

Student – classroom ratio in

secondary

45 / 38 44 50 46 46 53

BTVET enrolment (‘000) 9,344 11,124 23,498 42,674 39,712

According to the UN statistics, gross secondary enrolment ration stands at 26.9%. The other aspect under assessment is adult literacy. Uganda has one of the highest adult literacy in Africa standing at 73.2% (UN Database 2015). All together the computation of this criterion puts Uganda’s DHI index at 53.6, a reasonable distance from the 75.2 graduation threshold by 2020.

2.2.3 Economic Vulnerability Index (EVI) The third set of criteria under this assessment is the economic vulnerability index. This index is based on the following indicators: population size; remoteness; merchandise export concentration; share of agriculture, forestry and fisheries; share of population in low elevated coastal zones; instability of exports of goods and services; victims of natural disasters; and instability of agricultural production. This criterion is split further into two indices: exposure index that denotes the extent to which countries are exposed to shocks that make them susceptible to economic vulnerability and shock index that looks at trade shocks and the likelihood of occurrence of natural disasters as shown in the Fig.4

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9 Mid-term Review of Implementation of the Istanbul Programme of Action

Fig. 4: Constitution of the Economic Vulnerability Index

A EXPOSURE INDEX A 1 Structure of Uganda’s Population

Uganda under took a census in August 2014 that put Uganda’s population at 34.9 million this differs from the UN figure of 37.5 that had been projected. This census showed a slow-down in Uganda’s fertility rate at 6.2 (down from 6.9 in 1995) and an annual population growth rate of 3% per annum lower than 3.2% that had been projected. The question for Uganda is whether this population presents a demographic dividend or is increasing the dependency. Uganda already has one of the youngest populations in the world with 57% of the population below the age of 18. Uganda’s labor factor productivity is very low (second lowest in EAC)1. Despite having a fast growing middle class that has increased by sevenfold in the last two decades (from 1.8 million in 1992/93 to 12.6million in 2012/13), 63% of Ugandans remain either poor or vulnerable to poverty2. Job growth also lagged behind population growth. The World Bank’s latest Enterprise Survey data for Uganda (January 2013 to July 2014) shows that between 2010 and 2012, formal business establishments in Uganda added jobs at an annual rate of 2 percent, which was one-third of the average 6 percent for low income countries, and one quarter of the annual growth rate a decade ago (2004 and 2006). A2 Remoteness The rationale of this indicator is the linkage of population location and distance to key amenities that support a higher quality of life including safe water and sanitation, electricity, education and health care. Most of Uganda’s population is remote. Only 18.4 % of Uganda’s population resides in the urban areas compared to the African average of 22%. The majority of urban areas other than the capital Kampala have an average of 25,000. Improving of Uganda’s telephone network

1 Source: EAC Secretariat Labour Productivity Study Commissioned in 2013. Kenya came on top with Burundi last 2 MFPED (2014) Uganda Status of Poverty Report

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10 Mid-term Review of Implementation of the Istanbul Programme of Action

has gone a long way in improving the connectivity between persons and businesses which as an imperative for reducing remoteness. Uganda has one of the highest phone per capita indices in the world now standing at 52%. Out of 34.9 million there are 15.7million telephone lines mostly on mobile. The expansion of the road network has increased the connection between the main urban centers. Uganda needs to improve her paved road network from the baseline of 3,795km to 6,000 by 2020 (NDPII target). Uganda is on track to meet the UN’s remoteness threshold of 72% and now stands at 67.6%. A3 Share of Agriculture to GDP Uganda’s computation of the share of Agriculture to GDP includes hunting, fisheries and forestry resources. Annual growth of agricultural GDP has been slow, with a 2.3 annual increase in 2014/15. Coffee, tea and cotton as well as fish continue to be Uganda’s leading exports. Fish has particularly increased as a contributor to overall agriculture contribution growing by 40% in the 2014/15 financial year alone as the demand for fish has increased both in Uganda and abroad. Stronger performance of the services and industry sectors have contributed to Uganda’s strong economic performance compensating for the decline in the contribution from agriculture which has fallen due to low prices at the global market and weak demand due to weak economic performance in the developed countries. Strides in manufacturing ensured that industry overtook services and agriculture as the leading contributor of economic growth for the first time in 2014/15 as shown in Fig. 5 below.

Fig. 5 Contribution of agriculture industry to real GDP growth

Source: MFPED 2014/15 Background to the Budget

Overall agriculture’s contribution to GDP rose from 24.7% in 2010/11 to 26.5% in 2011/12 but only

to reduce again to 24.05% in 2014/15. During the same period, the contribution of the services sector increased from 47.7% and marginally to 47.8%.

A4 Merchandise Export Concentration The criterion of merchandize export concentration aims at ensuring that inasmuch as countries

continue to focus on export products in which they have a competitive advantage, they also

2.9%

1.1%1.8% 1.5%

4.4%

9.7%

4.4%3.3%

4.5%5.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2010/11 2011/12 2012/13 2013/14 2014/15

Sect

ora

l Gro

wth

Agriculture, Forestry and Fisheries Industry' Services Annual Real GDP growth

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11 Mid-term Review of Implementation of the Istanbul Programme of Action

diversify and enter new markets to maximize their export potential. The fact that Uganda’s has maintained coffee, tobacco and tea as her key products on the global market for the last five decades has made it vulnerable to external market shocks and demand swings. Consequently, Uganda’s net exports declined from 10.9% in 2012/13 to 8.4% in 2013/14. The rating of merchandise export concentration for Uganda under the UN rate is 0.2 compared to the 11.3 threshold making this the single lowest scoring for Uganda on the IPoA ratings. In response, Uganda is aiming to diversity its export platform with a renewed focus on key flagship products outlined in the NDP II and these include 12 flagship agricultural enterprises: coffee; cotton; tea; maize; rice, cassava, beans; fish; beef; milk; citrus and bananas. Improved performance in manufacturing and prudent investments in the mining (including oil and gas) will ensure Uganda improves in the coming years.

A5. Share of population in low elated costal zones This criterion does not apply to Uganda

B: SHOCK INDEX A6 Instability of exports of goods and services

By 2012, Uganda’s export value reached $2.8 billion of which formal exports accounted for $2.4 billion was from the formal sector. Since 2010, export value has risen by 11.8% (NDPII) Food exports (especially to DR Congo, South Sudan and Rwanda has posted a strong performance compensating for lower export performance in tea, coffee and tobacco. Uganda has been negatively affected by the instability of her export of goods and services due to volatility of the foreign exchange regime; reduced demand in America, Europe and Asia associated from the economic downturn as well as a general price falls especially for coffee and tea. However, COMESA countries continue to be the export destination for most of the export volumes accounting for 56.5% of total exports since 2010. In 2014/15 the deficit on trade account increased by 4.1% from US $2.25million to in 2014 to US$2.34 by March 2015 as a result of lower export earnings and marginal increase in import expenditure (MoFPED, 2015). However, Uganda’s export base especially in Tobacco, fish, oil re-exports and coffee continue to hold steady despite the low prices and demand globally. Under the UN rating, the index for Uganda is 2.8 way below the 7.8 threshold for graduation. This is a pointer that Uganda will have to diversify her export, improve her trade balance in ways that spread the risk and reduce the instabilities in her export sector.

A7 Victims of natural disasters Uganda has very few instances of natural disasters with landslides in highly terrains in far eastern

Uganda on the Elgon ranges and the far west on the Rwenzori ranges presenting risks from time to time. Uganda is elaborating a disaster preparedness policy and has a state ministry in the Office of the Prime Minister coordinating responses with ministries and development partners to address challenges of victims of disasters but to also strengthen Uganda’s disaster Early Warning Systems (EWS). The Entebbe based Decision Support System of the Nile Basin Initiative and the Government own Meteorological center are key providing data to this EWS.

A8 Instability of Agricultural production According to UBOS 2014 statistical abstract, the total area planted of food crops increased to

5,745,000 Ha (0.3 percent) in 2013. Only 70% of Uganda’s arable land is under cultivation. More

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12 Mid-term Review of Implementation of the Istanbul Programme of Action

land has however been opened up with peace returning to northern Uganda after 20 years of conflict. The rate of growth of the has oscillated between 3.2% and 2.3% since 2009/10 with a contribution 25% to GDP in 2013/14 as shown in Fig. 6 below.

Fig 6: Illustration of growth rate of agriculture (left) and contribution overall to GDP (right)

Source: Consultant analysis data from Agriculture Sector Performance Review (2014)

In 2014, tea production increased by 3.4 percent in 2013 and tobacco production increased by

60.6 percent in 2013. Maize has continued to be a key food crop for Uganda and in many ways a cash crop as well but poor rains ensured only 0.5% increment in production between 2013 and 2015. Failed rains were also responsible for drop in production of banana (by 2.8%) and beans which usually do well increased production by only 0.8%. Coffee bounced back after the rise in coffee prices in 2013 as the global demand increased with end of the global financial downturn. The quantity of Coffee procured in 2013 increased by 11.5 percent. The strongest performance has been for fish whose catch from Lake Victoria increased from 185.5 Mt in 2012 to 193 Mt in 2013. Uganda has also registered rapid growth in the dairy and poultry products. Overall, the instability of agricultural production is caused by three main challenges: a) Dependency on rain-fed agriculture which causes drops in production during droughts b) Pest and diseases mainly coffee wilt and banana wilt diseases among others c) Declining soil fertility and very low uptake of the right combinations of both organic and

inorganic fertilizers. Uganda uptake of fertilizer is only 1kg/ha per year below the 500kg/ha recommended for Ugandan soils

3.22.9

1.1

1.8

1.5

2.3

0

0.5

1

1.5

2

2.5

3

3.5

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15

25%

47%

21%

7%

Agriculture Services Industry Other

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13 Mid-term Review of Implementation of the Istanbul Programme of Action

Table 5: Summary Table of Uganda’s Assessment

Criterion Indicators Performance against the IPoA thresholds or scores

Overall Three step criteria assessment

Likelihood of Graduation by 2020 using the traffic lights methodology

Income criterion GNI Per capita (GNI UN computation 2014) Note that Uganda uses the GDP as a measurement criterion

$663 ($1,242) $663 compared to

($1,242 threshold)

Not likely

Human Assets Index

Under 5 Mortality Rate (NHPC 2014)

80 (66)

53.6 Compared

to 66 threshold for LDCs

Less Likely

Population Malnourished (%) (FAO 2013)

25.7 (65.5)

Gross Secondary School enrolment ration (EMIS, 2013/14)

26.9 (18.7)

Literacy Rate (MoES 2015) 74 (64.3)

Economic Vulnerability Index

Population (UBOS 2014 census) 34.9 (34.9)

31.8 Compared

to 32.0 threshold for LDCs

Likely

Remoteness (%) World Bank 2015

67.6 (72)

Merchandise export concentration (UN Fact sheet 2015)

0.2 (11.3)

Share of Agriculture (MoFPED 2014/15)

27.5 (44.9)

Population in coastal areas N/A

Instability of exports of goods and services (UN Fact Sheet 2015)

14.6 (31.9)

Victims of natural disasters (UN Fact Sheet 2015)

0.87 (67.9)

Instability of agricultural production (UN Fact Sheet 2015)

2.8 (7.2)

OVERALL ASSESSMENT Less Likely to Graduate by 2020

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14 Mid-term Review of Implementation of the Istanbul Programme of Action

Chapter 3

Alignment to National Planning Processes

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15 Mid-term Review of Implementation of the Istanbul Programme of Action

Chapter 3: Alignment of National Planning Processes to the IPoA Agenda

3.1 Uganda’s Planning Dispensation

ganda adopted a Comprehensive National Development Framework after implementation of the Poverty Eradication Action Plan (PEAP) in 2009/10. This framework set up the Uganda Vision 2040 to be implemented in a sequence of national development plans and

a national aspiration to ensure a transition from poverty reduction to development and prosperity. Uganda had already been a signatory to the Millennium Declaration of 2000 and the MDGs became a focus for the second PEAP (2002-2009). Development partners (especially those providing budget support) called for the alignment of national planning to the MDGs and more resources were allocated to social sectors. Poverty reduced from a high of 56.4% in 1992/93 to 24.5% at the beginning of NDP I and a lot was done to ensure that Uganda achieved other MDG goals and targets but also reference was made to the Brussels Programme of Action that preceded the IPoA The IPoA started at the same time as the NDP I in 2010 and as a consequence alignment was not possible. However, as the IPoA got implemented, there was awareness (beginning from the mid-term review of the NDP I) that alignment was critical to attainment of vision 2040. The vision had a much higher ambition to ensure that Uganda attains a medium income country status by 2017. Under the NDP II, the alignment, to IPoA has increased and all the five priority areas under this plan are linked to the eight priority areas of the IPoA as shown below.

The alignment is further illustrated by the extent to which national targets under NDP II are in tandem with the IPoA priority areas as shown by Table 6 below.

U

IPoA (Eight Priority Areas)

1. Increasing productive capacity

2. Supporting agriculture 3. Enhancing trade 4. Focusing on key

commodities 5. Investing in Human and

social development 6. Multiple crises 7. Mobilizing financial

resources 8. Ensuring Good

governance

NDP II (Uganda prioritized five areas where Uganda has the

highest multiplier effect)

1. Agriculture 2. Tourism 3. Minerals, oil and gas 4. Infrastructure

development; and 5. Human capital

development. (NDP II has a two sub-chapters on sources of financing sources and Governance)

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16 Mid-term Review of Implementation of the Istanbul Programme of Action

Table 6: Illustration of Uganda’s development agenda and the alignment towards implementation of the IPoA

Targets Indicator (proxy indicators that relate to Uganda context in some cases)

2010 /11 (baseline)

Now (2015/16)

Target for 2020 under NDP II

Commentary

Priority Area 1: Increase productive Capacity

Targets

Value addition Government focusing on value addition especially in agro processing and providing incentives for foreign investors in this effort. The construction of an oil refinery is a core investment over the medium term.

Access to telecommunication services Mobile Phone coverage 9.5m lines 15.7m lines 22m lines Projection by consultant for 2020

Primary Energy Supply per capita Electricity per capita 80kWh 90 kWh 578 kWh Rural electrification a key public investment in the medium term

Renewable Energy Hydro Power dams being prioritized to transit from thermal power sources

Enhancement of energy production and distribution

Total installed capacity 595MW 850MW (2013/14)

2,500 MW Karuma Isimba and Agago dams to come on grid by 2025

Road Transport Paved Roads (km) 3,000 3,795 6,000 km Restructuring at Uganda’s Road Authority to improve performance

Rail Transport Freight Cargo by Rail (thousands of tons)

12 (2012/13)

17.8 25.5million tons

Standard Gauge Rail commissioned to run through to Kigali and Juba

Air Transport International air passenger traffic through Entebbe

1.34 million (2012/13)

1.47 million

2.16 million Revamping of Entebbe Airport on-going

Priority Area 2: Supporting Agriculture Food Security and Rural Development

Targets Indicator

Eradication of Hunger Share of population below poverty line

24.5 19.7 14.1 Uganda has largely remained food secure save for food stricken areas in Karamoja

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17 Mid-term Review of Implementation of the Istanbul Programme of Action

Targets Indicator (proxy indicators that relate to Uganda context in some cases)

2010 /11 (baseline)

Now (2015/16)

Target for 2020 under NDP II

Commentary

Increasing the share of agriculture in production

Share of agriculture, forestry and fishing in GDP (%)

2.9 2.3 3 Agro-processing and more investment in production and marketing is the focus under NDPII

Rural Infrastructure Uganda focusing on connectivity through expanding investment in education, and health as well as improving the road network. Development partners through projects like Community Agriculture and Infrastructure Improvement Project (CAIIP), District Sustainable Livelihoods Program, Northern Uganda Social Action Fund (NUSAF) and Peace Recovery and Development Program (PRDP) are supporting government to improve rural infrastructure overall

Priority Area 3: Enhancing Trade

Targets Indicator

Broaden Export base Increase in manufacturing as a proportion of exports (%)

6.0 8.5 19 Mining, oil and gas poised to propel the export sector by 2020

Finalize Doha Round of Trade Negotiations Uganda has chosen to negotiate the next round after completing trade talks within the EAC and COMESA as part of the resolution of the Heads of State Summit in Kigali in 2014. This attempt is to negotiate within a regional framework inasmuch as the Doha Round has aspects that relate to Uganda’s individual concerns.

Priority Area 4: Focusing on key commodities

Targets Indicator

Reducing commodity dependence Uganda has identified 12 flagship enterprises to reduce the dependence on just coffee, tea and tobacco and to increase her trade competitiveness. These include coffee; cotton; tea; maize; rice, cassava, beans; fish; beef; milk; citrus and bananas

Priority Area 5: Investing in human and social development

Targets Indicator

Education Gross secondary school enrolment ratio

814, 087 (2007)

1,362,739 1,800,000 (estimate)

Introduction of USE critical to increase in enrolment

Health Under five mortality rate 137 (2006) 90 (2011/12) 56 (MDG-4) Uganda implementing the roadmap to ends maternal and child mortality 2012-2017

Youth and Development Under the Ministry of gender labor and social development, Youth Livelihood Program and other interventions under NUSAF, PRDP and KALIP are providing seed capital for business start-ups for young entrepreneurs. Skilling Uganda is another deliberate program to reach the youth with business skills to increase their employability

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18 Mid-term Review of Implementation of the Istanbul Programme of Action

Targets Indicator (proxy indicators that relate to Uganda context in some cases)

2010 /11 (baseline)

Now (2015/16)

Target for 2020 under NDP II

Commentary

Water Rural Safe Water Coverage 65 79 100 Gravity water sources identified to provide water for consumption and irrigation in rural areas

Gender % of Women in accessing economic empowerment initiatives

12 22 (estimate figures from FOWODE a local NGO in Uganda)

30 Government to review the gender policy to incorporate trends under NDPII and SDGs

Social Protection Roll out of the SAGE programme (districts)

14 35 55 SAGE program after piloting in 14 districts (later Yumbe was added) will roll out to 40 districts with 20 first in 2015/16 FY

Priority Area 6: Addressing multiple Crises and other emerging challenges

Targets Indicator

Withstanding Economic Shocks Strengthening trade ties within EAC and COMESA and trade with neighboring South Sudan, DRC will remain critical so that changes in the global economy do not directly affect Uganda’s trade profile.

Climate Change and biodiversity protection Uganda passed the Climate Change Policy in 2014 to ensure biodiversity protection and will be part of the Paris 2014 Declaration that includes a $100 billion grant to support developing countries to address advert effects of climate change at sub-district levels.

Natural Hazards Uganda’s Office of the Prime Minister is finalizing the Disaster Preparedness policy that will elaborate the government strategy to address natural hazards and disasters including expanding investments in early warning system technologies under meteorology and disaster forecasting and recovery services.

Priority Area 7: Mobilizing Financial Resources

Targets Indicator

Domestic Resource mobilization

Reducing corruption Corruption Perception Index (out of 10)

2.9 3.4 3.7 Uganda continues to ensure public accountability through oversight roles of Parliament and Auditor general

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19 Mid-term Review of Implementation of the Istanbul Programme of Action

Targets Indicator (proxy indicators that relate to Uganda context in some cases)

2010 /11 (baseline)

Now (2015/16)

Target for 2020 under NDP II

Commentary

and other integrity institutions and courts

Priority Area 8: Ensuring Good Governance

Targets Indicator

Gender Equality Uganda has over 30% representation of women in Parliament – one of the highest in Africa. At lower ages, gender disparity in primary and secondary schooling has been reduced with the introduction of UPE and USE. However, some negative cultures still prohibit the advancement of women empowerment sustain acts like female genital mutilation and early marriages – but this too is on a decline.

Human Rights Uganda Human Rights Commission and other agencies under the judicial system are in place to ensure protection of fundamental human rights and freedoms.

Institutional capacity for transparency in resource use

Since 2000, there have been measures put in place to ensure transparency in use of public resources under the Public finance management strategy, debt strategy and oversight by the internal audit function at national and local levels.

Building enduring peace and stability Professionalization of the Uganda’s army – the Uganda People’s Defence Forces (UPDF) has enabled Uganda to achieve security both of person and property more so after the end of the civil conflict in northern Uganda in 2008.

Source: NDP II and additional figures from the UBOS Statistical Abstract 2014, MDG reports 2013 and 2015 and Background to the Budget 2015/16

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20 Mid-term Review of Implementation of the Istanbul Programme of Action

3.2 Alignment of the IPoA to the NDP

3.2.1 IPoA TARGETS UNDER PRIORITY AREA 1: Increasing the productive capacity

The focus of the NDP II remains value-addition and this will have required both private sector investment expansion of a skilled labor force and capital investment in the short run. The majority of persons employed by businesses were found to be causal/unskilled laborers whose contribution to tax revenue is very small (Uganda Enterprise Survey, 2013). The challenge in ensuring productive capacity has been the weak linkages between production and related trade services. There is need to re-think the country’s export strategy with a focus on the demand side (where is the market and what quality and prices are in play) rather than over emphasizing the supply side (increasing production). Market intelligence will be key to the evolving export strategy, so that Uganda increases her market entry readiness. Uganda has invested heavily in hydro electricity production to elevate her electricity consumption per capita (through rural electrification). Government is committed to improving the supply of energy throughout the country and has put in place an environment to facilitate investment through Private Public Partnerships. The focus on hydro-electric power is a good path although with supply poised to go under the demand by 2019, environmentally unfriendly thermal and nuclear will be other options away from the much preferred renewable energy path. Uganda’s is poises to reach 920MW of electric power up from the current 850MW with completion of small hydro-electricity dams in 2016/17. These include among others: Kinyara co-generation project (30MW); Nyamwamba hydro power plant (14MW); Nengo mini-hydro power dam (6.5MW); Rwimi and Siti 1 mini-hydro power dam (5.5MW); Lubila mini-hydro power dam (5.4MW); Kakaka mini-hydro power plant (5 MW); Waki mini hydro power plant (4.8MW) and Maziba mini-hydro power dam (1 MW). Already underway is the construction of the Isimba dam whose completion will bring on board 183 MW and Karuma hydro power project – the largest in Uganda with 600MW expected before 2020. Uganda is well on course to ensure energy access to all by 2030 with almost 98% of all districts with electricity connectivity under the rural electrification project.

3.2.2 IPoA TARGETS UNDER PRIORITY AREA 2: Supporting agriculture, food security and rural development

Uganda is largely recognized as a breadbasket with majority of Ugandans able to feed their households throughout the year. However, food security remains a concern for a substantial part of the population especially in regions prone to floods (eastern Uganda) droughts (north eastern Uganda) and a general crop failure due to the high dependence on rain-fed farming. Uganda will eradicate hunger with more investments in irrigation, soil fertility and conservation management as well as a state subsidized food distribution system where food can be transported from where it is abundant to where it is scares. Food banks and silos have proven critical to eradication of hunger and current efforts to set up commodity exchange markets and warehouse receipt systems should be a core focus in the coming years.

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21 Mid-term Review of Implementation of the Istanbul Programme of Action

3.2.3 IPoA TARGETS UNDER PRIORITY AREA 3: Enhancing trade

Uganda is keen to diversify her export base with introduction of new export products in addition to the traditional coffee tea and tobacco. Expanding the export base will require attracting foreign direct investments in areas like mineral exploration (plans underway to explore further oil and mineral deposits in northern eastern Uganda and Karamoja regions). Uganda still has potential to expand agro-processing with promising prospects in palm oil, sunflower, and simsim for edible oils; as well as expanding the fruits and beverages sector. Uganda is already producing large quantities of fruits and beverages for the DRC, South Sudan and Rwanda markets. There are other areas Uganda can tap into and these include milk which can generate $2om per month from organized 50,000 dairy farmers in the cattle corridor alone. Uganda’s trade balance continues to decline mainly because of the declining demand for her exports in wake of a high import bill and foreign exchange volatilities. Like has already been mentioned, organized production and market systems are critical in maximizing gains from regional and global trade.

3.2.4 IPoA TARGET UNDER PRIORITY AREA 4: Focusing on key commodities

The NDP II has identified 12 key flagship products that include coffee; cotton; tea; maize; rice, cassava, beans; fish; beef; milk; citrus and bananas in which Uganda has a competitive advantage. Others like cut-flowers, hides and skins, edible oils and minerals including oil and gas sector will be key in contributing to the volume of exports by 2019/2020. Uganda’s competitiveness and investment climate strategy (CICS) enters its third phase in the later stages of the IPoA and Uganda will be able to identify new commodity clusters to focus on. Already tourism, citrus and business process outsourcing are some of the areas that the CICSII has piloted with positive results.

3.2.5 IPoA TARGETS UNDER PRIORITY AREA 5: Investing in human and social development

Uganda has implemented since 1997 the policy of Universal Primary Education that has increased enrolment 2.7 million children in 1996 to 8.5 million by 2013. Uganda was aware of this surge in enrolment and quickly set up a school facilities grant to match this enrolment with requisite school infrastructure. The secondary school enrolment increased as well as the policy extended under Universal Secondary Education and inclusion of vocational training as well. Uganda is however facing three challenges in this regard: i. The quality of education and training is still low in UPE and USE schools and vocational

institutes as the pace of government investments has been slower than surge in enrolment. This is an area that the education ministry is trying to address;

ii. Gender disparities remain in education and training mainly because of a culture in some parts of the country that is not fully supportive of girl child education as well as gaps in investment in sensitive aspects like sanitation for girls, as well as early marriages though to a limited scale.

While Uganda has not met the Millennium Development Goals 4 and 5 by 2015 (i.e. reducing the infant, under-five and maternal mortality rates) a lot of progress has been made. The NDP II has emphasized extension of service at health units IV and referral hospitals, where safe deliveries can be done across the country. Working with development partners, there is now an openness to expand contraceptive services and integrating family planning, sexual health and health-care

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services in national strategies and programs. The challenge now is to implement the road map for accelerating the response to maternal and children health passed in 2013. Uganda met the MDG target to halve by 2015 the proportion of people without sustainable access to safe drinking water and basic sanitation. Under the water sector strategic plan, projects are now underway to provide sustainable access to safe drinking water and basic sanitation to all by 2020 and Uganda is on track to meet this milestone. Lastly, in November 2015, Uganda achieved a milestone and passed the national policy framework on social protection. After piloting its landmark programme the Social Assistance Grant for Empowerment (SAGE) in 15 districts, Uganda announced a national roll out to 40 new districts over the course of the next 5 years. This will bring Uganda to a total of 55 districts and the SAGE program will enhance social protection systems to improve the resilience of all, including poor and disadvantaged groups.

.

3.2.6 IPoA TARGETS UNDER PRIORITY AREA 6: Addressing multiple crises and other emerging challenges

Uganda joined the rest of the world in landmark Paris Conference on climate change in November 2015 that struck a deal with targets to reduce carbon pollution, invest in biodiversity conservation and increase the resilience of countries to address the adverse effects that come with climate change. Uganda has been a key player under the Nile Basin Initiative (whose headquarters it hosts at Entebbe) that has set up a Decision Support System, a Meteorology facility, and has piloted water resource management projects across the country. Data is now available to support design of projects and feed into an early warning system to inform responses to eminent floods and droughts.

3.2.7 IPoA TARGETS UNDER PRIORITY AREA 7: Mobilizing financial resources

As part of the financing strategy for the NDP, Uganda is aiming at expanding the tax base to mobilize resources locally to support its national and local government budgets. One of the focus areas has been increasing the capacity of the Uganda Revenue Authority to meet annual tax collection targets which hit the 8 Trillion mark for the first time in 2014/15. The focus is increasing tax opportunities through tax administration enhancement, public awareness rising, business development and increasing compliance – but matching tax revenue to public services that the population expects in return. To finance larger investments, Uganda is looking to longer term concessional loans and shorter term grants and co-financed projects partners on strategic public investments.

3.2.8 IPoA TARGETS UNDER PRIORITY AREA 8: Ensuring good governance

A lot has been done in Uganda over the last 25 years to uphold the rule of law and after the promulgation of Uganda’s 1995 constitution (later reviewed in 2000). Over the years Parliament has spearheaded passage of legislative frameworks and supported the oversight and accountability functions of government providing critical investigations under the Parliaments Public Accounts Committee and other Committees. Uganda can still do more to ensure advancement of press freedom, expanding debate on issues that affect governance and space for other political parties and processes to contribute freely to strengthen democratic governance.

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Chapter 4

Challenges and Opportunities for Uganda

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Chapter 4: Challenges and Opportunities

4.1 An Overview Uganda is setting her eyes now on the Sustainable Development Goals as a key element of the Post 2015 Agenda and will align her plans to the IPoA as well since both contribute to the Vision 2040 goal of elevating the country to a middle income status by 2030. Meeting the targets under the IPoA will require the contribution of both government, the private sector and non-state actors. More so the attainment of these targets will require a structural transformation right from strengthening of the institutional framework that coordinates a targeted approach to implementation based on the IPoA objectives and priority actions. Analysis done already by the UN Economic Affairs Department projects that meeting the SDGs alone will require investment in critical infrastructure to the tune of $5-7 Trillion for LDCs alone by 2030. However, the current financing and investment partners do not seem able to deliver on this requirement by 2030. Public resources alone therefore will not be sufficient. Proactivity in engaging the private sector right from the start through strategic public private partnerships is critical for Uganda. Concessional loans may provide a quick window in resource mobilization but debt sustainability levels need to be kept in check least the country faces a debt ceiling challenge that would impede future critical public investments. This section presents challenges that are impeding progress and identifies opportunities the Uganda can harness to graduate out of the LDC category by 2020.

4.2 Challenges impeding Progress 4.2.1 Structure of the Population that will sustain a high dependency ratio While Uganda’s overall fertility rate has reduced to 3% per annum from an average of 3.2% since 2006, the population is projected to increase to 60 million people by 2040. Currently, 57% of the population is below 18 years and 12% above 65% meaning that 27% of the population is shouldering a burden of 73% of the population. It is prudent therefore that Government focused more on youth-centered interventions with both the public and private sector and at the same time meeting its commitments to expand social protection for the elderly. 4.2.2 Volatility in the exchange rate amidst trade imbalance The upward thrust to inflation has come as a result of weakening of the Uganda shilling against the US dollar mainly due to dwindling foreign exchange inflows (with war in South Sudan and declining remittances from abroad and weak demand for Uganda exports) and movement of investors from other markets with anticipation of US raising of interest rates by their Federal Reserve Bank. This meant that with a lower exchange rate, Uganda still had to face a high import bill for key products like petroleum (its low price not withstanding). Dependence on rain-fed agriculture has not helped matters as droughts quickly show in headline inflation. The slow pace to issue oil production licenses discouraged FDI to the oil sector at a time when remittances were also falling from Ugandans in the diaspora. A weak shilling is unsupportive of public and private sector growth since

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public contracts are enforced with Uganda shillings regardless of what happens on the global market place. 4.2.3 Low public investments in critical sectors especially agriculture and tourism Allocations to agriculture and tourism – which are key foreign exchange earners are both below 4% of the national budget making their contribution to GDP restricted. Current funding for the sector is shs.480bn with a paltry shs.10bn to support the entire country on the district production and marketing grant. Tourism has received less than 1% of the national budget and yet it is now the highest foreign exchange earner having surpassed coffee in 2014. To support Uganda’s balance of payment position, there will be need to increase investments in these key sectors. 4.2.4 Structural challenges related to inefficiencies procurement and contract management Inspite of various public sector reforms, inefficiencies in the public sector remain especially in slow pace of projects design and approval processes, procurement, contract management and low investments in operations and maintenance of infrastructure stock. There have been challenges related to low absorptive capacity. Some sectors like energy and road infrastructure projects continue to face challenges of low absorption due to delayed related land disputes and compensation and slow procurement. 4.2.5 High youth unemployment Expanding school enrolment at primary and secondary education levels has ensured high literacy levels. The challenge now is employment. Uganda’s formal unemployment among the youth stands at 83% meaning that only 17% of youth that leave tertiary level education find employment in the public sector. Uganda has responded with a Youth Entrepreneurship Program where young people can access low interest credit for business start-ups and scale-up but this is at a limited stage. Government recognizes that youth unemployment is a threat to social cohesion and the private sector is being facilitated to provide employment for young people. 4.2.6 Not sufficient investment on human development, social sectors Uganda has seen an increment in investment in social sectors. More schools and hospitals have been built. The challenge however remains the low levels of facilities’ functionality. There is a need to motivate teachers and health workers through revision of their remuneration and staff housing. Child health and literacy is a critical aspect of the IPoA. Malaria and high dropout rates respectively continue to curtail performance in these areas. Expansion of anti-malarial care and supply of treated mosquito nets remain a critical focus of the health sector. On the other hand, unsupportive culture in some areas that does not support girl child education as well as early marriages have contributed to the drop-out of the girl child especially at secondary education level. Government is in the process of restructuring the functional adult literacy to make it more responsive to local adult literacy needs. Support supervision and more allocation to operation and maintenance of the current infrastructure stock as well as staff motivation are critical in improving local services delivery. 4.2.7 Lack of a coordinated framework aimed a joint contribution to a set of targets There is very limited awareness of the IPoA among key Ugandan institutions – and this also relates to other key GoU commitments. As a result, there’s not jointed up effort to ensure that implementation of government programs is aimed at meeting the LDC gradation criteria. Its therefore important that over the next five years, that the Ministry of Finance working closely with

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the Office of the Prime Minister, strengthens its linkages with other sectors to embrace and implement critical interventions tailored to meet key targets under the IPoA by 2020.

4.2.8 Weak data and public sector M&E systems While most sectors (education, health, water, finance, and justice) have elaborate M&E systems to capture public sector performance data, others have weak M&E systems making reviews and performance measurement difficult. Data is infrequently collected and there is an over reliance of the UBOS to provide national data but its only produced once in two years and mainly on household survey data and not all aspects of the economy.

4.3 Opportunities for Uganda to Graduate by 2020

Uganda has opportunities it can harness to fast-track her progression out of the LDC category by 2020. There is potential to boost the tourism sector which overtook coffee in 2013 /14 as a top foreign exchange earner. With her key flagships on-going namely the Karuma and Isimba hydro power plants and funds for the standard gauge railway line from Kenya to Rwanda secured, Uganda now has an opportunity to focus further on human development. The national budget framework has indicated increase in financing towards health and education. Lastly, Uganda has identified 12 key agricultural enterprises to revitalize production and expand the export base. This will contribute to better performance under the Economic Vulnerability Index as well as the income criterion for gradation by 2020. Table 7 shows the opportunities for Uganda in summary.

Table 7: The table shows the opportunities for Uganda to graduate by 2020

Criterion Indicators Opportunities for Uganda

Income criterion

GNI Per capita Uganda ranked 7th leading coffee exporter in the world up from 12th position in 2013 and only second to Ethiopia. With more investment in fertilizer, Uganda is able to export 20 million bags from the current 4 million bags by 2020. Uganda has a new opportunity with news that Starbucks an international coffee chain will start buying directly from Uganda in 2016

Tourism is currently the highest forex earner for Uganda and with more investments could propel Uganda’s GDP to the levels needed for graduation. Uganda was rated among top 20 tourist destinations of the world by the National Geographic Society

Human Assets Index

Under 5 Mortality Rate Uganda Government has rallied all stakeholders around Roadmap for accelerating the reduction of maternal and neonatal mortality and morbidity in Uganda (2007-2015). This platform has laid a foundation that has increased coordination of efforts geared towards addressing maternal and child health.

Population Malnourished (%)

Uganda passed the Uganda Nutrition Action Plan UNAP 2011-2016 and currently, a policy on nutrition and its strategy are being drafted with a keen focus to reduce child stunting and malnutrition overall. This provides an opportunity for the multifaceted, multi-sectoral approach to rally behind this new policy

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Criterion Indicators Opportunities for Uganda

dispensation and revitalize interventions to address malnutrition in Uganda.

Gross Secondary School enrolment ration

Development partners have indicated strong support for BTVET and the Ministry is receiving support to link this to Skilling Uganda Programme launched in 2013

Adult Literacy Rate The functional adult literacy FAL is to be reviewed to increase funding to key aspects of this strategy since it has been very low and not increased over the years.

Economic Vulnerability Index

Population (No) Preliminary results from the census of 2014 demonstrated a fall in fertility from 3.2% to 3.0% per annum although more is needed to sensitize both the masses and policy makers on the critical importance of attaining an optimal population that matches the resources available to provide services

Remoteness (%) A larger proportion of Ugandans (72%) resides in the rural countryside presenting an opportunity to mobilize this community to undertake farming, and other enterprises and sell in the urban areas. Uganda can look to Brazil and other countries that have engaged the population in remote areas to maximize their potential where they are.

Merchandise export concentration

Uganda is putting together a revised export strategy and this provides an opportunity to engage various players on this subject. Uganda will identify key commodities to focus on and Market intelligence will be key to this process

Share of Agriculture An Agriculture cluster program financed in part by the World Bank is going to be implemented in Uganda to identify key clusters to invest in. This will potentially increase the share of agriculture to GDP

Population in coastal areas

Not Applicable

Instability of exports of goods and services

Uganda will maximize the opportunities under AGOA, Everything but Arms and other trade treaties to export its produce while continuing to trade in the current regional markets

Victims of natural disasters

Under the National Planning Act, 2002 the whole country became a planning area. NPA working with the disaster preparedness ministry will strengthen the early warning system to address eventualities related to natural disasters when they occur.

The Office of the Prime Minister is finalizing the National Disaster Management Policy that will rally government and her development partners to address disaster related risks in years to come.

Instability of agricultural production

Uganda will focus on 12 priority commodities in order to widen its revenue base. This will have diversified her export profile and concreted medium term support to commodities with the highest growth potential for export.

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Chapter 5

Post 2015 Agenda: Uganda’s Implementation

Traction for Graduation by 2020

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Chapter 5: Post 2015 Agenda: Uganda’s Implementation Traction for Graduation

5.1 Planned Financing towards IPoA priority areas in the Budget As part of the NDP II implementation, government under the medium term expenditure framework earmarked resources towards investment that are closely linked to priority areas of the IPoA as shown in the table below. The mid-term review notes that there has been a broad attempt to prioritize infrastructure which is key to increasing the productive capacity in key sectors. There has also been plans to expand spending in sectors that support rural development and human capital development and good governance. With more resource, the review notes that more alignment to the IPoA will be required especially for areas Uganda is lagging behind under the UN thresholds so that it attains rating needed to ensure its graduation out of the LDC category by 2020.

Table 7: Central sector allocations by class of output UG Billion (excluding Arrears and taxes)

2015/16 2016/17 2017/2018 2018/2019 4-year average

Allocation % Allocation % Allocation % Allocation % Allocation %

Priority 1: Increasing productive capacity in key sectors

Infrastructure (considered only works and Transport)

3,287 22 4,273 27 6,204 31 6,122 35 4,972 29.4

Energy and Mineral Development

2,857 19 3,292 21 3,698 19 2,733 15 3,145 18.6

Information and Communication Technology

93 0.6 60 0.4 81 0.41 57 0.3 72.75 0.4

Priority 2: Supporting Agriculture Food Security and Rural Development

Agriculture and Food Security (although includes fisheries, crop and animal industry)

475 3.2 493 3.1 568 3 254 1.4 447.5 2.6

Lands Housing and Urban Development (as a proxy for rural development)

101 0.7 103 0.6 266 1.3 149 0.8 154.75 0.9

Priority 3: Enhancing Trade

Tourism Trade and Industry

157 1.1 144 0.9 169 0.9 182 1.0 163 1.0

Priority 4: Focusing on Key Commodities

12 key commodities to be flagship projects

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Investment on Value Addition

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Priority 5: Investing in Human Capital Development

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2015/16 2016/17 2017/2018 2018/2019 4-year average

Allocation % Allocation % Allocation % Allocation % Allocation %

Education and Training (looking at the entire education sector)

1,004 7 1,105 7 1,266 6 1,010 6 1,096 6.5

Health 954 6.5 1,029 6 1,088 6 1,120 6 1,047.75 6.2

Water and Environment 472 3.20 429 2.7 309 1.6 351 2.0 390.25 2.3

Gender Labour and Social Development

84 0.6 82 0.5 103 0.5 107 0.6 94 0.6

Priority 6: Addressing multiple crises

Disaster Preparedness 20.53 0.1 20.7 0.1 21.2 0.2 - 20.81 0.12

Priority 7: Mobilization of financial resources

Nominal Public Debt to GDP

32.7 37.1 38.7 40.8 37.3

External Resource Envelope

1,097.6 1,238.8 846.5 - 1,060

Priority 8: Ensuring Good Governance

Justice Law and Order 1,045 7 1,047 7 1,164 6 1,308 7 1,141 6.7

Accountability 1,000 7 1,030 6 1,098 6 1,091 6 1,055 6.2

Legislature 371 2.5 318 2.0 366 1.9 421 2.4 369 2.2

Security 1,636 11 1,442 9 1,648 8 1,370 8 1,524 9.0

Total allocation in the NBFP)

14,770 15,875 19,703 17,703 16,920

Source: National Budget Framework Paper (2014/15-2019/2020) additional citing of NDP II cost estimates

5.2 Uganda’s post 2015 Development Agenda Uganda is focusing on achieving full alignment of the NDP to national, sector and district development plans. Focusing mainly on advancing development while at the same time addressing structural bottlenecks and hindrances to development. The review of MDG progress in 2013 presented the post-2015 agenda with key aspects emulated below. The focus on expanding public services Over the next phase of the post 2015 development agenda, the focus will be in increasing access to public services especially water, health and education. Already the country has invested consistently in road infrastructure over the last five financial years to improve connectivity between productive centers and mobility both of goods and persons. As seen in the national BFP (2015/16-2019/2020) more resources have been earmarked for social sectors to increase the availability and accessibility of public services, individual attributes of the population, as well as socio economic characteristics of communities. Investments in modern sanitation systems, lowering the cost of education and health while reducing financial leakages and wastages in the service delivery systems will be key. Government recognized the interlinkages between critical aspects of service delivery.in the NDP II these linkages are more pronounced. For instance, increasing water and electricity coverage will be critical for health and education service provision, while roads are vital to agriculture, tourism and energy sectors. It is possible to significantly to expand the shares of

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national income for both public investment and service delivery especially if spending on other areas is not increased beyond the rate of GDP growth Raising household incomes In order to access social services, the house holds must have adequate income to cover the associated costs. The Ugandan government has focused on lowering the costs of basic social services to determine education and health outcomes and increase disposable household incomes. Another aspect will be on expanding social protection. With funding from development partners, government will roll out the SAGE program to 55 districts by 2020 (with 15 pilot districts inclusive) so that the most vulnerable households of the elderly persons receive support. Investments in other services will require partnerships with the private sector especially in financial and technology services. Mobile money, electronic banking and mobile banks have lowered the cost of business for millions of households and will be done to support this effort. Macroeconomic stability The new planning framework marks a shift in government’s focus from ensuring macroeconomic stability and the provision of social services towards an additional and more ambitious in leading the economy’s structural transformation. Uganda will continue to pursue an interplay of both fiscal and monetary policies to stabilize the economy and particularly inflation and the exchange rate. Overall the focus will remain on acceleration in the rate of economic growth from historical average of 7% to 8.2% per year, an increase in total investments from 24% to 30% of GDP, and an increase in manufactured exports to 50% of total exports. Private Savings Further investments in human capital development will result in a more productive population and larger middle class. A structural change for improvement of human development outcomes will be accelerated with a focus on raising private savings form the current level of 14.5% of GDP to 35% by 2040. Expanding the Revenue Base The current 11.7%tax to GDP ratio means that Uganda will not have the resources to service her loans and implement key interventions in the public sector to desirable levels. Structural change will require expansion of the tax base and the increase through improvements in the tax administration and streamlining of exemptions. Increasing firm productivity Value addition and trade are key aspects of the post 2015 agenda. Government will help the private sector to increase productivity by supporting firms through a broad range of interventions and policy reforms to reduce the cost of doing business. Government will implement the third Competitiveness and Investment Climate Strategy to ensure enterprise enhancements, expansion in power generation capacity, relying on renewable technologies such as hydroelectric and solar among others. Sustain the effort to reduce strategic bottlenecks The effort to remove strategic holdbacks with the public and private sector is critical to Uganda’s post 2015 agenda. Government will continue to work towards removing inefficiencies and leakages that plague public service delivery. Efforts in setting up the delivery unit under the Office of the

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Prime Minister is a line in this direction. It will be critical to improve tax efficiency, avoid unnecessary expenditure and make greater use of international financial markets. Other key measures will be implementing rigorous land reforms reduce environmental pressure and boost agricultural productivity growth. Government will also facilitate the expansion of high valve economic activities by diffusing new technologies and overcoming coordination problem with in the private sector – which is a driver of Uganda’s economic growth.

5.3 Transition to the SDGs There is a strong linkage between the Sustainable Development Goals and the priority areas of the IPoA. However, this linkage needs to be emphasized as planning at sector levels enters the second year of the NDP II. It will be critical for Uganda to prioritize public investments towards meeting the NDP II medium term and longer term targets while keeping an eye on Uganda’s regional and international commitments. The following at the key areas that need to be emphasized: i. Investing in people by focusing more on the key human capital development and critical

investments in child and maternal health; ii. Social inclusion and investments in social protection; iii. Ensuring food and nutrition security; iv. Strengthening value addition for current exports and identifying knew ‘non-traditional’

products Uganda can sell on the global market including tourism and business process outsourcing; and

v. Preserving the environment by protecting the forest cover, conserving Uganda’s soils and protecting natural resources from exploitation and degradation.

5.4 Conclusive Summary Note With 57% of the population below the age of 20 Uganda is one of the youngest populations in the world. This presents a demographic dividend that can be harnessed. The focus will be needed to ensure expansion of skills needed on the job market, investments in social protection and increasing productivity through youth entrepreneurship and firm level capabilities where goods and services of value are produced. Uganda has realigned its national planning model around sequenced development plans which is critical for prioritization and a clarity of her development path. This will be vital in ensuring resources are invested in areas that will propel Uganda’s economic growth and development. In the medium term, Uganda remains focused on ensuring the GDP per capita increases to US$ 1,033. To achieve this, expanding the export base will be critical with more focused investment in 12 agricultural enterprises where Uganda has a high competitive advantage. Uganda also positioned herself to concentrate on Agriculture, Tourism and Mining (ATM). This will require improving productivity in these sectors, reducing implementation bureaucracy and increasing the current rate of absorptive capacity. Ministry of Finance and the central bank will continue to deploy a mix of both fiscal and monetary policies to ensure macroeconomic stability. Learning from past lessons and being proactive in budgeting, planning and implementation will be imperative. Inasmuch as Uganda is less likely to graduate from the LDC category by 2020, it is possible to achieve this graduation by 2025 especially with further investments in trade promotion and human development.

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Annex 1: References African Union (2010) Assembly of the African Union- Fifteenth Ordinary Session Assembly Resolutions, Kampala Uganda DFID (2011) Health Engagement in Uganda: Bulleting on funding to help Uganda achieve the health Millennium Development Goals Ministry of Finance Planning and Economic Development (2015) Background to the Budget 2015/16 Kampala Ministry of Finance Planning and Economic Development (2015) National Budget Framework Paper 2015/16-2019/20 Kampala Uganda Ministry of Health (2010) Roadmap for Accelerating the Reduction of Maternal and Neonatal Mortality and Morbidity in Uganda Kampala Uganda Ministry of Local Government (2006) Decentralization Policy Strategic Framework: Kampala Uganda National Planning Authority (2013) Uganda Vision 2040 Kampala Uganda Republic of Uganda: Office of the Prime Minister Government Annual Review of Performance 2012, 2013 and 2014 Kampala Uganda Republic of Uganda (2010) Millennium Development Goals Report for Uganda 2010 Special Theme: Accelerating progress towards improving Maternal Health Kampala Uganda Republic of Uganda (2015) Millennium Development Goals Report for Uganda 2015 Special Theme: Results, Reflections and the way forward Kampala Uganda Republic of Uganda (2014) National Development Plan 2015/16-2019/20 Kampala Uganda Republic of Uganda (2010): The Second National Health Policy: Promoting People’s Health to Enhance Socio Economic Development Kampala Uganda UBOS (2011) Uganda Demographic and Health Survey Preliminary Report, Kampala Uganda UBOs (2014) National Household Survey 2012/13 Kampala Uganda UNCTAD (2014) National Aggregate trade data for Least Developed Counties 2009-2022 Vienna Austria World Bank (2014) World Economic Outlook 2013 Washington DC United States

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