Uganda
Uganda’s economy has undergone major fluctuations from a vibrant economy in the 1960s, to suffering severe macroeconomic imbalances in the 1970s and 1980s, to enjoying an economic revival since the late 1980s. A key focus of recent public financial management reforms has been to improve macroeconomic performance and ensure strict budgetary discipline, in particular through the use of a three-year rolling budgetary plan as early as 1992/93. However, problems with the cash budgeting system undermined efforts to improve budget planning, requiring complementary reforms to cash management and commitment control systems. Reforms have also focused on poverty reduction, expenditure efficiency and effectiveness, financial management and accountability, and transparency and openness.
This chapter presents Uganda’s approach to universal telecommunications services and universal access and evaluates both the government’s strategy and its impact.
This case study considers the domestic political economy of Uganda, and the influence of international drivers on these dynamics. For almost 25 years, Uganda has been characterised by relative economic stability and development, but also by questionable levels of democratic governance. Corruption is perceived to be an increasing challenge in Uganda, with a worsening regional position in Transparency International’s Corruption Perception Index and a number of recent high-profile procurement scandals.
Uganda’s Energy Transition Plan (ETP) is a strategic roadmap for the development and modernisation of Uganda’s energy sector. It charts an ambitious, yet feasible pathway to achieve universal access to modern energy and power the country’s economic transformation in a sustainable and secure way. The plan was developed by Uganda’s Ministry of Energy and Mineral Development, with support from the International Energy Agency, and provides the groundwork for the government’s upcoming Integrated Energy Resource Master Plan.
The analysis does not just look at Uganda in isolation but considers how global trends are influencing and opening up new opportunities, notably driven by rapidly evolving clean technology costs and shifts in energy and climate finance. Particular focus is paid to making use of the country’s considerable energy and mineral resources, and parlaying this into economic development for Uganda, a core pillar to ensure the pathway in the ETP is a just and inclusive one. The report provides detailed sector-by-sector analysis, including key targets and milestones, estimates of investment needs, and includes high-level recommendations for its implementation. While the focus of the report is from now to 2050, the ETP also highlights key steps to further the energy sector’s decarbonisation beyond 2050 and estimates at what point the energy sector is poised to reach net zero.
This in-depth review of the energy policies of Uganda follows the format used by the International Energy Agency (IEA) for its peer reviews for member countries. This process supports energy policy development and encourages the exchange of international best practices and experiences.
Uganda has set an ambitious agenda to develop its substantial energy and mineral resources, promote economic development, end energy poverty, and lead the country to a just energy transition. Uganda’s stated objective in Vision 2040 is to transform into “a modern and prosperous country”, ensuring a better future for its citizens. The energy sector will play an important role in helping Uganda achieve this.
The newly launched Energy Policy for Uganda 2023 will serve as a crucial tool and major contribution to the country’s ambitious agenda. Uganda already has in place much of the technical expertise, government institutions and policy frameworks to reach its energy goals. It has also made significant progress over the past two decades in providing access to electricity and expanding generation capacity, and further ambition is encouraged to achieve universal energy access by 2040.
This report assesses the energy sector and the related challenges facing Uganda and serves as a situational analysis that feeds into the development of the country’s Energy Transition Plan to provide policy recommendations and support the development of the energy sector and the path towards universal access for all.
There is virtually no land value capture in Uganda (). The national and local governments can use public land lease, but own little land that they can lease and the revenues raised are low. The space for land value capture has actually closed over time after the 1995 Constitution and subsequent laws and policies emphasised that all land belongs to the citizens rather than the government. The 2013 National Land Policy also prevents any form of taxes on land in the near term, until Uganda is a middle-income country (Chapter 3, Section 3.5, Paragraph 16). There is strong political opposition to charge landowners and developers. Moreover, there is virtually no legislation for land value capture instruments; land markets function with severe imperfections; and cadastre data is weak for most urban areas.
After a year of turbulence, the Ugandan government stabilised the economy in 2012 with inflation falling to 14.6% from 18.7% in 2011. Tightened fiscal and monetary policy helped bring fiscal balances under control. While laying the foundations for recovery and growth, stabilisation came at the cost of a slowdown in gross domestic product (GDP) growth to 3.2% by June 2012. A gradual recovery is expected, with real GDP growth projected to reach 4.4% in 2012, then picking up to 4.9% in 2013 and 5.5% in 2014. Growth could be lower however if the suspension of budget support aid, announced by several donors in November 2012 over a government corruption case, is maintained.
In 2011, the Ugandan economy declined from gross domestic product (GDP) growth of over 6% the previous year to 4.1%. Over the course of the year, inflation averaged 18.8%, up from 4.1% in 2010, the exchange rate depreciated by 6.2% against the US dollar (USD), and the trade deficit increased from 9.6% to 10.8% of GDP.
The Ugandan economy recorded weaker growth of 5.1% in 2010 because of receding aggregate demand, mainly in private consumption, and weak external demand for traditional exports, in particular coffee. In spite of the declines, regional demand for Uganda's exports remained high. Export earnings fell from 2.9 billion US dollars (USD) in the financial year 2008/09 to USD 2.8 billion in 2009/10. Although lower than 2008/09 levels (USD 883 million), remittance receipts in 2009/10 (USD 820 million) surpassed traditional foreign exchange earners coffee and tourism. Earnings from coffee and tourism in 2009/10 were USD 262 million and USD 400 million respectively. Sustained public investment in infrastructure and the global recovery are expected to spur growth in the short to medium term. The near-term prospects for the oil and gas sector remain uncertain because of disputes between the government and oil exploration firms. The real gross domestic product (GDP) growth rate is projected to increase to 5.6% in 2011 and 6.9% in 2012 because of increasing regional demand and the improved global outlook.