This National Development Plan (NDPII) is the second in a series of six five-year Plans aimed at achieving the Uganda Vision 2040. The goal of this Plan is to propel the country towards middle income status by 2020 through strengthening the country’s competitiveness for sustainable wealth creation, employment and inclusive growth.
Uganda’s development status and trends over the period 2008/09 to 2013/14 reflect an improvement in a number of areas. Uganda’s economic growth rate has averaged 5.5 percent between 2010/11 and 2013/14, remaining below the target of 7.2 percent for the entire NDPI.
Agriculture remains the backbone of Uganda’s economy. In 2012/13, the sector accounted for 25.3 percent of the country’s GDP from 24.7 percent in 2010/11. It employs about 72 percent of the total labour force (formal and informal), 77 percent of whom are women, and 63 per cent are youth, mostly residing in the rural areas. Over the NDPI period, the sector registered sluggish growth from 1.0 percent in 2010/11, to 1.33 percent during 2013/14. Farming is still dominated by smallholder farmers engaged in food and cash crops, horticulture, fishing and livestock farming. The sector’s strength is leveraged through, among others, the National Agricultural Policy 2013 which sets a solid framework to guide investment and delivery of agricultural services.
Tourism is another important sector that has been growing consistently since the restoration of peace and security, and now accounts for around 9 percent of GDP, amounting to USD1.7 billion. Foreign visitors brought into the country an equivalent of USD1.003 billion in foreign exchange earnings in 2012, from USD 662m in 2010.
The minerals sub-sector’s contribution to GDP was estimated to be 0.3 percent in 2012/13. Value added by the sub-sector at current prices increased from UGX 134 billion in 2010/11 to UGX 185 billion in 2012/13, mainly driven by exports of gold and cement. Government has put a lot of emphasis on attracting private investment in mineral resources exploration and development through the provision of geo-scientific information on minerals, and management of equitable and secure titles systems for the mining industry.
The proportion of the labour force that is self-employed rose from 70.9 percent in 2009/10 to 81.5 percent. The proportion of the labour force in paid employment fell from 21.5 percent in 2009/10 to 18.5 percent in 2012/13. In 2012/13, 15 percent of the labour force had no formal education. The labour force growth rate is estimated at 4.7 percent per annum in 2012/13. There is a projected job gap of 13 million people between the formal labour market size and the total employable labour force.
Human capital development remains a major concern for this Plan, despite investments in health, education and skills development. In terms of health indicators, the country is still far from the ultimate goal of health for all. The Under-5 Mortality Rate, though improved from 137 in 2005/6 to 90/1000 live births in 2012/13, remains high. The Infant Mortality Rate, in particular has only reduced from 85 deaths per 1000 live births in 1995 to 54 deaths 2012/13, while the Neonatal mortality rate has remained relatively constant at 27 deaths per 1000 live births. The Maternal Mortality Ratio has stagnated at about 438 per 100,000 live births.
In education, the implementation of UPE program since 1997 resulted into increased access, from 2.5 million to 8.5 million pupils in 2013. The Pupil/Book ratio has stagnated at an average of 4:1 during the period 2009 to 2013. The repetition rate reduced from 11.7percent in 2009 to 10.3percent in 2013. The pupil teacher ratio at the national level has stagnated at 49:1 between 2009 and 2013. The gender gap in primary schools has narrowed to about 1 percent (50.5percent girls and 49.5percent boys).
While some progress has been made towards skilling the Ugandan labour force, the economy still faces substantial skills gaps in key sectors. Over the last five years, progress has been made mainly in formal areas of Business, Technical, Vocational Education and Training (BTVET), registering a 73 per cent increase in enrolment, from 24,598 in 2009 to 42,674 in 2013, of which 28,024 (66 percent) are males and 14,650 (34 percent) are females. At the higher education level, total enrolment increased by 18 percent from 169,476 in 2009 to 201,376 in 2013, with a significant increase in female enrolment.
Significant progress has been made in strengthening gender equality and women’s empowerment. There has been formulation of a gender responsive regulatory framework, including policies and strategies. Further, there has been a process for institutionalization of gender planning in all sectors and increased collection of gender disaggregated data and information through research. As a result, there has been improvement in the number of women in political leadership and gender parity in enrolment of girls at primary level, in addition to increased ownership of land by women. Despite the progress made, only 27 percent of registered land is owned by women and although 70 percent of the women are engaged in agriculture, less than 20 percent control the outputs and proceeds from their efforts.
The Plan is in line with the Uganda Vision 2040 and builds on the achievements registered under the first National Development Plan (NDPI), while taking into consideration the challenges encountered and lessons learnt during its implementation. The Plan also seeks to leverage the Country’s growth opportunities and honour development and partnership obligations at the national, regional and global levels e.g. EAC, COMESA, IGAD, Africa Agenda 2063, the Post 2015 Development Agenda, and UNFCCC.
The goal of this Plan is to attain middle income status by 2020. This will be realized through strengthening the country’s competitiveness for sustainable wealth creation, employment and inclusive growth. Thus, the Plan sets key four objectives to be attained during the five year period. These are: (i) increasing sustainable production, productivity and value addition in key growth opportunities; (ii) increasing the stock and quality of strategic infrastructure to accelerate the country’s competitiveness; (iii) enhancing human capital development; and (iv) strengthening mechanisms for quality, effective and efficient service delivery. In order to achieve these objectives, Government will pursue a number of development strategies including: (i) ensuring macro-economic stability with fiscal expansion for frontloading infrastructure investments; (ii) industrialization and export oriented growth through value addition, agro processing, mineral beneficiation, selected heavy and light manufacturing; (iii) an employment creation strategy through fast tracking skills development and harnessing the demographic dividend; (iv) strong Public/Private Partnerships (PPPs) for sustainable development; (v) a private sector led growth and a quasi-market approach; and (vi) strengthening governance mechanisms and structures.
NDPII Expected Results
Over the Plan period, Government will focus on attaining the following results: (i) Increasing per capita income from USD788 to USD1,039; Increasing GDP growth rate from 5.2 to 6.3 percent (ii) reducing the poverty rate from 19.7 per cent to 14.2 percent, and reducing inequality coefficient from 0.443 to 0.452; (iii) reducing the number of young people not in education, employment or training by at least 20 per cent; (iv) increasing manufactured exports as a percentage of total exports from 5.8 percent to 19 percent; (v) increasing the percent of the population with access to electricity from 14 percent to 30 per cent; (vi) increasing access to safe water from 65 percent to 79 percent in rural areas and from 77 percent to 100 percent in urban areas; (vii) increasing the quantity of total national paved road network from 3,795 kilometres to 6000 kilometres; (viii) reducing the Infant Mortality Rate per 1,000 live births from 54 to 44 reducing the under – 5 mortality rate per 1,000 live births from 90 to 51 and the Maternal Mortality Ratio per 100,000 live births from 438 to 320/100,000; (ix) reducing fertility from 6.2 to 4.5 children per woman; (x) reducing child stunting as a percent of under-5s from 31 percent to 25 per cent; (xi) increasing primary to secondary school transition rate from 73 percent to 80 percent and Net Secondary Completion from 36 percent to 50 percent.
The macroeconomic strategy for the NDPII is underpinned by the objective of maintaining macroeconomic stability and the need to raise resources to address the infrastructure deficit. Overall, the strategy envisages modest growth, largely driven by public and private investment. The strategy is also characterized by the frontloading of infrastructure spending and scaling down of expenditure in the last two financial years of NDPII implementation, in order to harmonise with the regional and international development frameworks. Emphasis is also put on domestic resource mobilization and harnessing of new sources of financing beyond the traditional sources.
This framework is informed by the following assumptions: The macroeconomic convergence criteria of the EAC monetary union, which requires the country to meet specific targets, namely; a ceiling on headline inflation of 8 percent; a ceiling on the fiscal deficit, including grants of 3 percent of GDP; a ceiling on public debt of 50 percent of GDP in net present value terms; a reserve cover of 4.5 months of imports and maintaining core inflation below 5 percent as agreed in the Policy Support Instrument (PSI) of the IMF. The achievement of the above targets has been the basis of arriving at the chosen macro-economic strategy for NDPII.
The average targeted growth rate of about 6.3 percent will be driven by growth in public and private investments and exports. Infrastructure spending will be the major driver for the fiscal deficit peaking at 8.6 percent of GDP by 2016/17 and 2017/18 and later consolidating to 4.8 percent in 2019/20 to prepare for the East African Community convergence criteria.
There will be increased efforts in domestic revenue mobilization, particularly focusing on raising corporation tax revenues, widening the VAT coverage and improving efficiency of tax collection. This will translate into revenues and grants increasing from 14.5 percent in 2015/16 to 15.9 percent of GDP in 2019/20. Expenditures are expected to peak to 22.9 percent of GDP in 2017/18, owing to infrastructure expenditure in the critical years of the NDPII.
The Plan will be financed by both public and private resources, with about 57.8 percent being Government and 42.2 percent being private contributions. The overall cost of the NDPII is estimated at approximately UGX 196.7trillion, of which UGX 113.7 trillion is Government funding and UGX 83.0trillion is private sector contribution. Of the UGX 196.7trillion, UGX 22.1trillion is wage, UGX 32 trillion is non-wage and UGX 133.9 trillion is development. Public financing sources will include External financing namely, budget support, concessional loans, semi-concessional borrowing, non-concessional borrowing; domestic financing, namely bank financing, Bank of Uganda, Commercial Banks; and non-banking financing. The non-public sources of financing will include: Public Private Partnerships (PPP), direct private sector investments (domestic and foreign) and CSO contributions. However non-concessional financing will target projects with capacity to pay back.
Priorities of the Plan
This Plan prioritizes investment in three key growth opportunities which are: Agriculture; Tourism; Minerals, Oil and Gas, as well as in two fundamentals: Infrastructure and Human Capital Development. Investment in the five priority areas will follow the entire value chains, which have guided the identification of priority projects and interventions in these areas. This is intended to rally the various players along the value chains, while maximizing sectoral linkages and increasing efficiency in resource use.
In agriculture, emphasis will be placed on investing in 12 enterprises (Cotton, Coffee, Tea, Maize, Rice, Cassava, Beans, Fish, Beef, Milk, Citrus and Bananas), along the value chains. Focus will be on: Strengthening agricultural research; implementing the single spine extension system; technology adaptation at the farm level; increasing access to and effective use of critical farm inputs; promoting sustainable land use and soil management; increasing access to agricultural finance with specific options for women farmers; and strengthening agricultural institutions for effective coordination and service delivery.
Under the tourism priority area, the Plan will focus on improvement, diversification and exploitation of tourism products. Emphasis will be placed on: aggressive marketing; investment in tourism facilitating infrastructure (energy, water, and ICT); appropriate skills development and improvement in related services; increasing the quantity and quality of accommodation facilities; intensifying the provision of security and protection of tourists and tourist attraction sites; combating poaching and eliminating the problem of wildlife dispersal to ensure maximum exploitation of tourist attractions and amenities; capacity building, tourism management (Regulation and enforcement, grading and classification of hotels and restaurants) and; conservation of tourism sites and wildlife.
In the Minerals, Oil and Gas development priority area, six key minerals are earmarked for exploitation and value addition. These are: Iron ore, Limestone/Marble, Copper/Cobalt, Phosphates, Dimension stones and Uranium. In addition, the exploitation of an estimated resource of 6.5 billion barrels of oil with a recoverable potential of 1.4 billion barrels is prioritized. Key investments in this area will include: Development of geological surveys; investment in more survey and exploration; faster acquisition of land; construction of 3 pipelines to transport crude oil to Lamu and Mombasa; refined products to Kampala, Eldoret and Kigali, and Liquefied Petroleum Gas (LPG) to Kampala and Gulu; construction of an oil and gas refinery; and increased prospecting and processing of the selected minerals.
Investment in transport infrastructure will include: the Standard-Gauge Railway; and upgrading of strategic national roads from 3,795km to 6,000km. In line with this Plan’s prioritization framework, strategic roads to support exploitation of minerals, oil and gas, tourism and decongestion of traffic in the city areas will be targeted. In addition, efforts will be geared towards increasing the volume of passenger and cargo traffic by marine traffic.
As regards to energy infrastructure, investment will be focused on exploitation of the abundant renewable energy sources including hydropower and geothermal, so as to increase power generation capacity from 825MW in 2012 to 2,500MW by 2020; expansion of the national electricity power grid network; and promoting energy efficiency and use of alternative sources of energy.
In the ICT area, priority is on extension of the National Backbone Infrastructure (NBI), construction of ICT incubation hubs/ centres and ICT parks.
Government will also invest in water for production infrastructure to boost commercial agriculture and industrial activities. Emphasis is on construction of large and small scale water schemes for irrigation, livestock and rural industries, while increase cumulative storage from 27.8 to 55 Million cubic metres.
The human capital development priority area will focus on increasing the stock of a skilled and healthy workforce towards the production of human capital to accelerate the realization of the demographic dividend.
Under Health, emphasis will be on: mass management of malaria (mass malaria treatment for prevention); National Health Insurance scheme; universal access to family planning services; health infrastructure development; reducing maternal, neonatal and child morbidity and mortality; scaling up HIV prevention and treatment; and developing a centre of excellence in cancer treatment and related services.
The education component will focus on: Strengthening Early Childhood Development (ECD) with special emphasis on early aptitude and talent identification; Increasing retention at primary and secondary levels, especially for girls, as well as increasing primary-to secondary transition; increasing investment in school inspection; reviewing and upgrading the education curricula.
The skills development component will focus on: reforming of the curriculum at all levels to produce skills that are relevant to the market; expanding skills development to include formal and informal through strengthening coordination, regulation and certification of both formal and non-formal training; and establishing skill development centres of excellence in prioritized areas.
In regards to the social development component, emphasis will be on: strengthening Labour Market Information System (LMIS) and Employment Services; implementing a national programme for women economic empowerment; promoting creative industries for job creation especially for young people; establishing and operationalize productivity centres at national and regional levels for improving the productivity of the Ugandan workers; developing and implementing a programme to inculcate positive values and mind-sets to produce “skilled and cultured people”; expanding access to contributory social security for workers in the informal sector and gradual roll-out of a non-contributory social pension scheme for older persons; and scaling up the youth livelihood programme.
The water and sanitation component will focus on: increasing access to safe water and sanitation level in rural and urban areas.
To realize the Plan targets, the following core projects shall be implemented: Karuma hydro power plant; Isimba hydro power plant; Industrial substations; Ayago hydro power plant; Grid Extension in North-East, Central and Lira; Masaka-Mbarara Transmission Line; Kabale-Mirama Transmission Line; Grid Extensions; Standard Gauge Railway; the Entebbe Airport Rehabilitation; Kampala-Jinja highway; Kibuye-Busega-Nabingo; Kampala Southern bypass; Kampala-Bombo Express highway; Upgrading of Kapchorwa-Suam Road; Kampala-Mpigi Expressway; Rwekunye Apac-Lira-Kitgum-Musingo Road; Road Construction Equipment; Hoima Oil Refinery; Oil-related infrastructure projects; Albertine region airport; Albertine region roads; Agriculture Cluster Development Project (ACDP); Markets & Agriculture Trade Improvement Project (MATIP II); Farm Income Enhancement and Forest Conservation II; Tourism Marketing and Product Development Project; Renovation of 25 Selected General Hospitals; Mass treatment of malaria for prevention; Comprehensive Skills Development Project; Uganda Women Entrepreneurship Programme (UWEP); the Youth livelihood Programme (YLP); Strengthening mobilization, management and accountability for public resources.
Implementation, Monitoring and Evaluation
To address implementation bottlenecks, existing institutional implementation arrangements will be strengthened and the following reforms will be implemented:
a) A Delivery Unit will be established in Office of the Prime Minister (OPM) with a fully functional technical team to fast track implementation of the core projects, Presidential initiatives and key sector results (Big Results).
b) The Sector Working Groups (SWGs)will be institutionalized, and made binding with a lead agency and functional secretariat. The roles of the non-state actors such as the private sector, civil society and development partners will be clearly articulated during implementation of the Plan.
c) All Accounting Officers at national and local government level will sign performance contracts in line with NDPII results and targets.
d) The NPA will issue a Certificate of Compliance of MDA plans and budgets to NDPII before they are approved by Parliament.
e) A national service programme will be established and institutionalised for building patriotism, inculcating national values and changing mind-sets towards improved service delivery.
f) A Private Sector/Civil Society Forum will be established to discuss progress in the implementation of the NDP II by Non-State Actors.
To facilitate tracking of planned results, the following reforms will be made in the monitoring and evaluation framework:
a. Sector reviews will be redefined to focus on performance reporting on the realization of NDPII macro and sectoral results and will be serviced by the Sector Working Group Secretariats.
b. The NDP Annual Review Forum will be established to review progress on NDPII performance. At the district level, an NDP II review forum will be established to provide a platform for stakeholders at all levels to provide feedback on implementation of this Plan.
c. The Terms of Reference (ToR) of the Joint Annual Review of Decentralization will be expanded to also include progress made by LG on the implementation of NDPII priorities at the decentralized level.