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Oh Uga nda ! may G od uphold thee,

We lay o ur future in thy ha nd .

United , free,

For liberty

Tog ether we' ll a lw a ys s ta nd.

Oh Uga nda ! the la nd of freedo m.

Our love and labour we give,

And w ith neighbo urs a ll

At our co untry's ca ll

In pea ce a nd friend ship w e'll live.

Oh Uga nda ! the la nd that feeds usBy sun and fertile soil grown.

For our ow n dea r la nd,

We'll a lw a ys s ta nd:

The P ea rl of Africa 's C row n.

NATIONAL ANTHEM

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FOREWORD

Over the last 50 years, Uganda has

ma de signific a nt developme nt prog res s .S ince the mid 1980s , the ec onomy ha s

moved from rec overy to g row th. A num-

ber of economic policies and programs

such as the Structural Adjustment Pro-

gra ms (S AP s), Econo mic Rec overy Pro-

gram (ERP), Poverty Eradication Action

Plan (PEAP) have been successfully

implemented leading to a boost in eco-

nomic grow th. S ince 2002, the ec ono-

my grew consistently at an average of

6.4 perc ent a nd ha s s ince built suffic ient

momentum for takeoff.

In order to consolidate and acceler-

ate this growth process, Government

in 2007 approved the Comprehensive

National Development Planning Frame-

work policy (CNDPF) which provides

for the development of a 30 year Vi-

sion to be implemented through: three

10-year plans; six 5-year National De-

velopme nt P la ns (NDP s); S ec tor Invest-ment Plans (SIPs); Local Government

Development Plans (LGDPs), Annual

wo rk pla ns a nd B udgets . Co nseq uently,Cabinet approved the National Vision

Statement, A Transformed Ugandan

Society from a Peasant to a Modern

and Prosperous Country within 30

years.The Na tiona l P la nning Autho rity

in consultation with other government

institutions and other stakeholders has

thus developed a Uganda Vision 2040

to operationalise this Vision statement.

Ug a nda Vis ion 2040 builds on the p rog -

ress that has been made in addressing

the stra tegic bottlenecks that have c on-

strained Uga nda s soc io-economic de-

velopment since her independence, in-

c luding ; ide ologica l diso rienta tion, w ea k

private sector, underdeveloped human

resources, inadequate infrastructure,

small market, lack of industrialization,

underdeveloped se rvice s sec tor, unde r-

development of agriculture, and poor

democracy, among others.

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IV | U G A N D A V IS IO N 2 0 4 0

It is therefore, with great pleasure that I

now pres ent the Vision 2040, w hos e a s-

pira tions a re to c ha nge the co untry from

a predominantly low income to a com-

petitive upper middle income country

w ithin 30 years w ith a per ca pita inco me

of USD 9,500. It sets out the goals and

targets to be achieved to realise this

desired socioeconomic transformation.

The a spira tions in Vis ion 2040 have

been arrived at following a nation-wide

co nsulta tion proc es s , a nd it reflec ts the

collective understanding, aspirations

a nd de termination of Uga nda ns.

The Vis ion 2040 is c onc eptua lized

a round s trengthening the funda menta lsof the eco nomy to ha rness the abunda nt

op po rtunities a round the c ountry. The

opportunities include; oil and gas, tour-

ism, minerals, IC T bus ines s , a bund a nt

labour force, geographical location and

tra de, w a ter res ource s, industria lisa tion,

a nd a griculture. On the other hand , the

fundamentals include: infrastructure for

(energy, transport, water, oil and gas

a nd IC T); S c ienc e, Tec hnolog y, Engi-

neering a nd Innova tion (S TEI); la nd ; ur-

ba n development; human reso urce; a nd

pea ce, s ecurity and d efence.

The implementa tion of Vis ion 2040 w ill

depend on the actions and measures

that we undertake as Government, pri-

vate sector, civil society and as indi-

viduals through short and medium-term

Na tiona l Development P la ns . Therefore,

the commitment and dedication of all

Ugandans towards its realization is of

paramount importance. Fellow Ugan-

dans, to achieve the aspirations as

stated in this Vision, we need to have

the right attitudes and mind-sets, par-

ticularly towards work, improving our

competitiveness, and collective partici-

pa tion in its implementa tion.

I, therefore, call upon all Ugandans totake up the challenge as set out in this

Vision 2040 to enable the country real-

ize its full pote ntia l.

FOR GOD AND MY COUNTRY

Yoweri Kaguta Museveni

PRESIDENT OF THE REPUBLIC OF

UGANDA

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TAB LE OF C ONTENTS .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... . v

LIS T OF TAB LES ......... ......... ......... .......... ......... ......... ......... .......... .... viii

LIS T OF FIG URES ......... .......... ......... ......... .......... ......... ......... ......... .. ix

LIS T OF AC RONYMS .......... ......... ......... .......... ......... ......... ......... ...... xi

EXECUTIVE S UMMARY.... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... ... xiii

C HAP TER 1: INTRODUCTION...... .... .... .... .... .... .... .... .... .... .... .... .... ... 2

1.1. B ac kground.. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 2

1.2. Context and Rationale. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 3

1.3. The Vision... .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . 4

1.4. Cha llenges to Uga ndas Development. .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 5

1.5 S tructure of the Document. .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 7

C HAP TER 2: THE Vis ion AS P IRATIONS , P RINCIP LES ,

TARG ETS AND P OLIC Y S HIFTS .... .... .... .... .... .... .... .... 9

2.1. Aspira tions... . . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . 9

2.2. P rinciples of Vision 2040..... . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . 10

2.3. Vision 2040 Ta rgets ... . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. 13

2.4. Required P olicy Reforms a nd S hifts. . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . 16

C HAP TER 3: G ROWTH TRENDS AND MAC ROEC ONOMIC

S TRATEG IES ......... ......... ......... .......... ......... ......... ....... 20

3.1. G row th Trends... . . . . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . .. . . . .. . . . . 20

3.2. Uga ndas Competitiveness . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . 23

3.3. Unemployment... . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . .. . . . .. . . . .. . 26

3.4. G row th S trategy.. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . 26

TAB LE OF C ONTENTS

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3.5. Key Sectors that will influence G DP G rowth over the

Vision period.. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . . . . 31

3.6. Macroeconomic S t ra teg ies .. ... .. ... ... ... ... .. ... ... ... ... .. ... ... ... ... ... .. .. 31

3.6.1. Sa vings and Investments . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 32

3.6.2. Financial Services. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 33

3.6.3. Ba lance of P ayments (BOP). .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 35

3.6.4. P ublic Finance.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 36

C HAP TER 4: S TRENG THENING FUNDAMENTALS FOR

HARNES SING OPP ORTUNITIES. . . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 39

4.1 Opportunit ies . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 39

4.1.1 Tourism... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 39

4.1.2 Agriculture. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 45

4.1.3 Oil And G as . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 47

4.1.4 Minerals . . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 50

4.1.5 Abundant Labour Force . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 51

4.1.6 Industrialisa tion.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 54

4.1.7 Knowledge and ICT Sec tor. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 57

4.1.8 Geographica l Locat ion and Trade Opportunit ies . .. .. .. .. .. .. .. .. .. .. 61

4.1.9 Water Resources. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 63

4.2 Fundamenta ls fo r Deve lopment .. ... ... ... ... .. ... ... ... ... .. ... ... ... ... .. ... 67

4.2.1 Human Resource. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 67

4.2.2 Transport Infras tructure and Services. . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 70

4.2.3 Energy . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 73

4.2.4 Sc ience , Technology, Engineering and Innovat ion. .. .. .. .. .. .. .. .. .. 75

4.2.5 Urba n Development. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 78

4.2.6 Land. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 82

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4.2.7 Peace , Security and De fence .. ... ... ... ... .. ... ... ... ... .. ... ... ... ... .. ... . 83

CHAP TER 5: SOCIAL TRANS FORMATION... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 87

5.1. Popula t ion: .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 88

5.2. Hea lth and Nutrition.. ... .. ... ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. ... ... ... .. 88

5.3. Educa t ion and Lite racy. .. .. ... ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. ... ... ... 91

5.4. C a re and P ro tec tio n fo r the Vulnera b le P opula tio n G ro ups .. 93

5.5. Hous ing Deve lopment. ... ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. ... ... ... ... . 93

5.6. Nat ional Culture .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 94

5.7. G ender Eq uality and Women Empowerment for

Socio-economic Transformat ion. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 96

5.8. Enviro nme nt a nd Na tura l Re sourc e s (ENR)........................... 98

5.9. C lima te Change.. ... ... ... ... .. ... ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. ... ... .. 100

CHAP TER 6: G OVERNANCE.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 104

6.1. S tate of G overnance.. .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 104

6.2. Cons t itutiona l Democracy.. ... ... ... ... .. ... ... ... ... .. ... ... ... ... .. ... ... ... 106

6.3. P ro te c tio n o f Huma n R ig hts .................................................. 108

6.4. Rule o f Law .. .. ... .. ... ... ... ... .. ... ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. ... ... .. 108

6.5. Electora l a nd P olitica l proces ses . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . 110

6.6. Transparency and Accountab ility. ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. 110

6.7. G o ve rnment Effe ctive nes s a nd R eg ula to ry Qua lity............... 112

CHAP TER 7: IMP LEMENTATION, MONITORING AND

EVALUATION S TRATEGIES.. .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . 115

7.1. Implementa t ion. .. ... ... .. ... ... ... ... .. ... ... ... ... ... .. ... ... ... ... .. ... ... ... ... . . 115

7.2. Financing . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . 118

7.3. Monitoring a nd Eva lua t ion. ... ... ... .. ... ... ... ... .. ... ... ... ... ... .. ... ... ... . 119

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LIS T OF TAB LES

Tab le 2.1: B as eline Sta tus a nd Vision Ta rgets. . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 13

Tab le 3.1: Destination of Uga ndas Exports (% of total exports). . .. . .. . .. 23

Ta ble 3.2: The G DP Trend a nd G row th Ra tes Over

the Vision P eriod.. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. 30

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LIS T OF FIG URES

Figure 3.1: Ugandas Comparative Growth Performance with Selected

UMI Co untries... . . . . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . 20

Figure 3.2: G DP &G DP P er-C a pita Trends (1962 - 2010)................................... 21

Figure 3.3: Grow th Rates of Key Sec tors... . . . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . .. 22

Figure 3.4: The Tra de Ba la nce............................................................................. 22

Figure 3.5: Ugandas Competitivenes with Upper Middle Income

Co untries... . . . . .. . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . . 24

Figure 3.6: Most P roblematic Fac tors for Doing B usiness. . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . 25

Figure 3.7: La bour Force Distribution by S ectors... . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . 26

Figure 3.8: The G row th P a th to the Upper Midd le Income S ta tus

by 2040..... . . . .. . . . .. . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . . 28

Figure 3.9: S ector Sha res o f GDP (Actual a nd Foreca sts ).. . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . 32

Figure 3.10: S avings to G DP Ratio of S elected Countries. . . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . 33

Figure 3.11: G ross Ca pital Formation a s a P ercentage of G DP.. .. . .. . .. . .. . .. . .. . .. . .. . . 34

Figure 3.12: Ta x Revenue a s a perce ntag e o f G DP for S elec ted

Co untries ... .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . . 36

Figure 4.1: Infra s tructure Need s for Tourism Developme nt................................. 42

Figure 4.2: P ropos ed Infra structure for Minera l Development.... . . . .. . . . .. . . . .. . . .. . . . .. 52

Figure 4.3: P ropos ed Economic Zones a nd Tra de Area s... . . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . . 62

Figure 4.4: P ropos ed Ra ilwa y Netwo rk... . .. . . .. . . . .. . . . .. . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . 71

Figure 4.5: P ropos ed Fra mewo rk for S TEI S ystem.... . .. . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . 76

Figure 4.6: P ropos ed S tra tegic Cities &Roa d Netwo rk... . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. 80

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Figure 4.7: The P la nned Ro a d Netw ork for G rea ter Ka mpa la

Metropo lita n Area ............................................................................... 81

Figure 5.1: Na tiona l a nd Reg iona l P overty Estima tes... . . . .. . . . .. . . . .. . . .. . . . .. . . .. . . . .. . . . .. . 87

Figure 5.2: Infa nt Morta lity Ra tes Over Time (Dea th p er 1000 Live B irths) of

S elected Co untries... . . . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . . .. . . . .. . . . .. . 89

Figure 6.1: Impa c t of Insta bility on G DP Trends in Ug a nda ................................. 105

Figure 7.1: The Fra mew ork for Implementa tion of The Na tiona l Vis ion..... ......... . 117

Figure 7.2: P ropo sed S eq uencing of Na tiona l Vis ion 2040 P riorities ................... 118

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B OP B a la nce of P a yment

B P O B us iness P roc ess Outsourc ing

B TVET B us ines s , Te chnic a l a nd Vo ca tio na l Ed uc a tio n a nd Tra ining

C AD/C AM C omputer Aid ed Des ig n a nd Ma nufa c turing

C IID Crimina l Intelligence a nd Inves tiga tions Direc tory

C NDP F C omprehens ive Na tiona l Development P la nning Fra mew ork

C OMES A C ommon Ma rket for Ea s t a nd S outhern Afric a

DP P Direc tor of P ublic P rosecution

EAC Ea s t Afric a n C ommunity

EAC C M Ea st Afric a n C ommunity C ommon Ma rket

ENR Environmenta l a nd Na tura l Resourc es

EP RC Ec onomic P olicy Resea rch C entre

ERP Ec onomic Recovery P rog ra m

FAO Food a nd Agric ultura l Orga niza tion

FDI Foreig n Direc t Inves tments

FG M Fema le G enita l Mutila tion

G DI G ender Rela ted Development Index

G DP G ross Domes tic P roduct

G KMA G rea ter Ka mpa la Metropolita n Area

G MOs G enetica lly Modified Orga nisms

HDI Huma n Development Index

HP P s Hydro P ow er P la nts

HRD Huma n Resource Development

IC T Informa tion C ommunica tions Tec hnology

IDP s Interna lly Displa ced P eople

IRWR Interna l Renew a ble Wa ter Resources

IS O Interna tiona l Orga niza tion for S ta nda rdiza tion

IT Informa tion Tec hnolog y

ITES Informa tion Tec hnolog y Ena bled S ervic es

kWh Kilo Wa tt hour

LDC s Low Developed Countries

LIS T OF AC RONYMS

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LG Loca l G overnment

LG DP s Loca l G overnment Development P la nsLP G Liq uefied P etroleum G a s

M &E Monitoring a nd Eva lua tion

MDAs Minis tries Depa rtments a nd Agenc ies

MEAs Multila tera l Environmenta l Agreements

MG LS D Minis try of G ender La bor a nd S oc ia l Development

MIC E Meetings Incentives Conferences and Events

Mo FP ED Minis try o f Fina nc e P la nning a nd Ec ono mic Develo pment

MS MEs Mic ro, S ma ll a nd Medium s ized Enterpris esMW Meg a Wa tt

NAPA Na tiona l Ada pta tion P la n of Action

NDP Na tiona l Development P la n

NDP s Na tiona l Development P la ns

NES AP New Ec onomy S kills for Afric a P rogra mme

NPA Na tiona l P la nning Authority

P EAP P overty Era dic a tion Action P la n

R&D Resea rch a nd DevelopmentS &T S cience a nd Tec hnolog y

S ADC S outhern Afric a n Development C ommunity

S AP S truc tura l Adjus tment P rogra m

S EZs S pec ia l Economic Zones

S G B V S exua l a nd G ender B a sed Violence

S MEs S ma ll a nd Medium Enterprises

S TI S c ience Technology a nd Innova tion

S TEI S cience Technology Eng ineering a nd Innova tionTAI Technology Achievement Index

UB OS Uga nda B urea u of S ta tis tic s

UMI Upper Middle Inc ome

UNFC C C United Na tio ns Fra mew ork C onventio n o n C lima te C ha ng e

UNFPA United Na tions Fund for P opula tion Ac tivities

UNHS Uga nda Na tiona l Household S urvey

US D United S ta tes Dolla rs

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EXEC UTIVE S UMMARY

Uganda Vision 2040 provides develop-

ment paths a nd s tra tegies to operation-

alize Ugandas Vision statement which

is A Transformed Ugandan Socie-

ty from a Peasant to a Modern and

Prosperous Country within 30 years

a s a pproved by C a binet in 2007. It a ims

a t tra nsforming Ug a nda from a predo m-

ina ntly pea sa nt and low inco me c ountryto a competitive upper middle income

country.

It builds on the progress that has been

ma de in a dd ress ing the strategic bottle-

necks that have co nstra ined Uga nda s

socio-economic development sinceindependence, including; ideological

disorientation, weak private sector, un-

derdeveloped human resources, inade-

quate infrastructure, small market, lack

of industrialization, underdeveloped

services sector, underdevelopment

of agriculture, and poor democracy,

among others.

The Vis ion 2040 is c onc eptua lized

a round s trengthening the funda menta ls

of the economy to harness the abun-

dant opportunities around the country.

The identified opportunities inc lude: o il

a nd g a s , tourism, minerals, IC T bus i-

ness , ab unda nt la bour force, g eog ra ph-

ica l loc a tion a nd tra de, w a ter res ource s,

industrialisation, and agriculture amongothers that are to date considerably

under-exploited. Achieving the transfor-

mational goal will thus depend on the

countrys capacity to strengthen the

fundamentals including: infrastructure

(energy, transport, water, oil and gas,

a nd IC T); S c ienc e, Tec hnolog y, Engi-

neering a nd Innova tion (S TEI); land use

a nd ma nag ement; urba nisa tion; huma n

resource; and peace, security and de-

fence.

Projections indicate that Uganda will

graduate into a lower middle income

co untry b y 2017, progres s ing to a n up-

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per midd le inco me c a teg ory by 2032 a nd

a tta ining its ta rget o f US D9500 in 2040.

P rojec tions further indic a te tha t Ug a nda

will be a first world country in the next

fifty yea rs . To a c hieve this trans forma-

tion the average real GDP growth rate

will have to be consistent at about 8.2

per cent per annum translating into to-

tal GDP of about USD 580.5bn with a

projected population of 61.3 million in

2040.

Uganda Vision 2040 identifies key core

projects that need to be started includ-

ing:

A Hi-tec h IC T c ity a nd a ssoc ia ted IC T

infrastructure; La rge irriga tion s chemes in different

pa rts o f the c ountry;

P hos pha te indus try in Tororo;

Iron o re indus try in Muko, Kab a le;

Five regiona l c ities ( G ulu, Mba le,

Kampa la , Mba ra ra , and Arua) a nd five

s tra tegic cities ( Hoima , Na ka song ola ,

Fortportal, Moroto, a nd J inja );

Four internat iona l a irports ;

A sta nda rd ga uge ra ilwa y network

w ith high speed tra ins;

Oil Refinery and a ss oc ia ted pipeline

infrastructure;

Multi-la ne paved na tiona l roa d net

w ork linking ma jor tow ns , c ities a nd

other s tra teg ic loc a tions ;

G lob a lly competitive skills

developme nt centres ;

Nuclea r pow er a nd hydro pow er

pla nts (Aya g o, Isimb a ,

Ka ruma , a nd Murchiso n B a y);

S cience a nd Tec hnolog y pa rks in

ea c h reg iona l c ity;

Internat iona l a nd na tiona l referra l

hos pita ls in ea ch reg iona l c ities

However, to achieve all this, some key

strate gies a nd po lic y reforms must ta ke

pla c e. Thes e inc lude:

Review the architec ture of go vern-

ment service delivery s ystem to a ct a s aunit, ha rnes s synergies a nd de liver pub-

lic services efficiently and effectively.

P ursue po licies a imed a t lea pfrog ging

es pec ia lly in the a rea s of S c ienc e, Tec h-

nology, innovation, and engineering;

human resource development; public

sec tor ma nag ement; a nd private s ector

development.

Develop a nd implement a Na tiona l

science technology and engineering

system that will help in initiating, im-

porting, modifying and diffusing new

technologies.

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Front-loa d inves tments in infra s truc -

ture ta rge ting a rea s of ma ximum op por-

tunities w ith foc us on o il, energy, trans -

po rt a nd IC T.

Accelerate indus tria liza tion throug h

upgrading and diversification to effec-

tively harness local resources, offshor-

ing industries and develop industrial

clus ters a long value c hains .

Make la nd reforms to fa cilita te fas ter

acquisition of land for planned urbani-

sa tion, infra s tructure developme nt, a nd

agricultural commercialisation among

other developme nts.

P ursue a pla nned urba niza tion polic y

that will bring about better urban sys-

tems that enhance productivity, liv-

a bility a nd susta ina bility w hile relea s ing

la nd for c ommercia lizing a g riculture.

S trengthen the three a rms of go vern-ment and ensure checks and balances

and taking decisions that have national

interes t: first, minis ters w ill not b e me m-

bers of Parliament to foster separation

of powers; and second, the judiciary

will be reformed to make it more inde-

pendent a nd proac tive.

Develop a nd nurture a na tiona l value

system to change citizens mind sets,

promote patriotism, enhance national

identity and nurture a conducive ideo-

log ic a l orienta tion.

Ac ce lerate g overnment reforms in the

educ a tion s ys tem a nd the c urric ulum to

obtain a globally competitive human re-

source with skills relevant to the devel-

opment pa ra digm.

Review a nd s trengthen the foreign

policy to enhance collaboration in ac-

co rda nce w ith existing a nd future a gree-

ments, standards and protocols withinthe fra mew ork of Ea s t Africa n C ommu-

nity, other regional blocs, African Union

and global community, for the realisa-

tion of this Vision.

Direc tly invest in strateg ic a rea s to

stimulate the economy and facilitate

private s ec tor grow th.

Develop a nd implement a spec ific p ol-

icy to attract and retain top rated pro-

fessionals in the Universities to make

Uganda a Center of Excellence in Edu-

ca tion in the reg ion.

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Estab lish a Uga nda infra structure fund

to significantly lower the cost of infra-

structure development.

Develop a universa l hea lth insura nce

system through public private partner-

ship.

The Vis ion impleme nta tion w ill be

spea rhea ded by H.E The P res ident b ut

rema ins a res po ns ibility o f every c itizen

in g overnment, priva te sec tor, c ivil soc i-

ety, po litic a l orga nisa tions a nd a ny oth-

er institutions. As already noted, it will

be implemented in line with the com-

prehensive National Development Plan-

ning Framework. Interventions will besequenced and detailed in the 5-year

national development plans and annual

budgets.

The fina nc ing of this Vis ion w ill be ma in-

ly by the government, CSOs, develop-

ment partners and the private sector.

Government will mobilise resources

using conventional and innovative non-

conventiona l mea ns o f fina ncing. Thes e

will include; tax and non-tax revenues,

revenue from oil a nd g a s , P ublic P rivate

Partnerships, concessional loans and

grants, borrowing from domestic and

interna tiona l ma rkets . The revenue from

oil a nd g a s w ill be used to kic k sta rt ma -

jor infrastructure development projects

to enhance the countrys competitive-

ness . The d ome stic a nd interna tiona l

borrowing shall include; domestic and

sovereign infrastructure bonds, venture

a nd investment funds .

There w ill be reg ula r review, monito r-

ing a nd eva lua tion of Vis ion 2040 in line

w ith the mec ha nisms provide d for in the

Comprehensive National Development

P la nning Fra mew ork policy.

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1Chapter

Kiprotich w ins a gold med-

al and raises the Uganda

Flag high at the London

Olymp ics 2012

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2 | U G A N D A V IS IO N 2 0 4 0

INTRODUC TION

C h a p t e r

1.1. Background

1. Uga nda covers a n a rea of

241,038 square kilometers of which

about a third is covered by fresh water

bodies and wetlands. It is mainly a pla-

teau astride the equator with favorable

tropical climate and average tempera-

ture rang ing from 18 to 28 de grees c en-

tigrade. It is endowed with numerous

na tura l res ource s .

2. The co untry ha s a rela tively

young population with about 60 per

cent below 18 years of age and a total

population estimated at 32 million peo-

ple (UBOS 2010). About 51 per cent of

this are female. Uganda is a peaceful,

stable and secure country. It is under

a multi-party democratic dispensation

with a decentralized governance sys-

tem.

3. Over the la st three dec ades ,

the economy has moved from recovery

to growth based on short-to-medium

term planning and the country imple-

mented a number of economic poli-

c ies inc luding the S tructura l Adjustment

Programs(SAPs), Economic Recovery

Program (ERP) and the Poverty Eradi-ca tion Action P la n (P EAP ). As a res ult

the GDP growth has since 2002 been

susta ined a t a n avera ge of 6.4 per cent.

The ma c ro-ec ono my ha s rema ined rel-

atively stable with inflation rates main-

ta ined a t s ing le d ig it level w hile public fi-

nance a nd moneta ry policies have b een

well ma nag ed.

4. A review o f g lo ba l d evelo pment

paths however, shows that long term

planning is a key factor in propelling

social-economic development and eq-

uitable distribution of wealth in many

countries all over the world. A number

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| 3U G A N D A V IS IO N 2 0 4 0

of Asian countries such as Malaysia,

S inga pore, S outh Korea a nd Thaila nda mong others, a dopted long term pla n-

ning to guide their development paths.

The long term pla nning helped to guide

these Governments to intervene sys-

tematically and through multiple ap-

proa ches to foster grow th.

5. Uga nda s pla nning ha s been

characterized by different approaches.

The mixed ec onomy a pproa c h to d evel-

opment was a key feature of Ugandas

economic development during 1962-

1971. During this period, two medium-

term plans were developed. However,

this development planning path wasinterrupted by the Eco nomic Wa r in

the 1970s . The ea rly 1980s s a w the

introduction of the Structural Adjust-

ment Program (SAP) and then the Eco-

nomic Rec overy P rog ram (ERP ) in 1987.

Between 1997 and 2008, the Poverty

Eradication Action Plan (PEAP) was theoverarching planning framework for the

country.

6. In 1999 a nd 2007, Ug anda de-

velope d long term pe rsp ec tive d evelop-

ment plans, Vision 2025 and draft Vi-

s ion 2035, res pec tively. How ever, thes e

were not operationalized mainly due

to absence of appropriate policy, legal

and institutional framework, and lack ofownership at different levels of leader-

ship. Furthermore, the development

approach and the economic thinking

at that time coupled with both external

a nd interna l fac tors c ould no t a llow their

implementation.

1.2. Context and Rationale

7. In 2007, G overnment a dopted a

Comprehensive National Development

Planning Framework which provides

for the d evelopment of a 30-yea r Vis ion

tha t w ill be implemented throug h: three

10-year plans; six 5-year National De-

velopment Plans (NDPs); Sector Invest-ment Plans (SIPs); Local Government

Development Plans (LGDPs); Annual

w ork pla ns ; a nd B udg ets . The first five

yea r Na tiona l Developme nt P la n ope ra -

tionalising this Vision was launched in

April 2010.

8. In line with this policy, the Vision

2040 consolidates the previous efforts,

lessons learnt and analysis of our past

developme nt strateg ies a nd future pros-

pects. It takes into account emerging

development opportunities including

the disc overy of oil a nd g a s res erves , E-

revolution, globalization and economicintegration, a mong others.

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4 | U G A N D A V IS IO N 2 0 4 0

9. It a ls o g ives a unified d irec tio n

for the co untry, mobilises peo ple a nd re-sources to a chieve a c ommon goa l, a nd

faster socio-economic transformation

by focusing on specific areas of maxi-

mum opportunity. This Vis ion the refo re,

w ill a s s is t the c ountry to repos ition he r-

self w ithin the g lob a l sphere.

1.3. The Vision

10. Uga nd a s Vis io n is A tra ns-

formed Ugandan society from a peas-

a nt to a modern and pros perous c ountry

w ithin 30 yea rs . This involves c ha ng ing

from a predominantly low income to a

c ompetitive upper midd le income c oun-

try within 30 years. It is envisaged that

the country will graduate to the middle

income segment by 2017 and reach a

per ca pita of US D 9,500 by 2040.

11. The Vision a tt ributes , which are

consistent with the principles of the

Constitution, are: (a) independence andsovereignty; (b) democracy and the rule

of law ; (c) s ta bility a nd pea ce; (d) know l-

edgeable and skilled; (e) able to exploit

a nd use its reso urce s g a infully a nd s us-

tainably; (f) in a strong federated East

Africa with an effective African Com-

mon Market and a strong African De-

fence Mechanism.

12. To rea lize this Vis ion, Uganda

w ill need to increas e its G DP by o ver 30times in the next 30 years to attain the

level of de velopment o bs erved in Uppe r

Middle Inc ome (UMI) c ountries . An a na l-

ysis of these countries development

paths and assessment of Ugandas

development potential confirms that it

is possible for the country to attain an

upper middle income status within the

next 30 yea rs.

13. Vis ion 2040 is conceptua lized

on harnessing strategic opportunities

by strengthening the relevant funda-

mentals capable of maximizing returns

to the e cono my. The identified opportu-

nities in this Vision include; oil and gas,

tourism, minerals, ICT bus ines s , a bun-

da nt la bo ur forc e, ge og ra phic a l loc a tion

and trade, water resources, industri-

alisation, and agriculture. On the other

hand, the fundamentals include: infra-

s tructure for (energy, transpo rt, wa ter, oila nd g a s , a nd ICT); S c ienc e, Tec hnolog y,

Engineering a nd Innova tion (S TEI); la nd

use a nd ma nag ement; urba nisa tion; hu-

ma n reso urce; a nd pea ce, s ecurity and

defence.

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1.4. Challenges to Ugandas De-

velopment

14. C urrently Ug a nd a s d evelo p-

ment is co nstra ined b y a number of fa c-

tors including;

a . Low Competitivenes s; a coun-

trys competitiveness is the ability to

produce g oods a nd services that c a n befavourab ly tra ded on the globa l ma rket.

It positions a country at an advantage

tow a rds a ttra cting investments . The

fac tors tha t defines c ompe titiveness in-

clude; institutions , p olicies, a nd fac tors

that determine the level of productiv-

ity o f a c ountry. Thes e a re; Ins titutions ;Innovation; Infrastructure; Microeco-

nomic environme nt; Hea lth a nd p rima ry

education; Higher education and train-

ing; goods market efficiency; Financial

ma rket d evelopment; Tec hnolog ic a l

readiness; Market size; Labour market

efficiency; and business sophistication.

Based on these factors, Uganda was

ra nked 121 out o f 142 countries in terms

of overall competitiveness of its goods

a nd servic es by the World Eco nomic

Forum in 2010. To deve lop a s trong pri-

vate sector and be able to attract For-

eign Direct Investments, Uganda has to

improve on the above factors.

b . Wea k public sec tor ma na ge-

ment and administration; Public Sec-tor Management and administration is

characterised by weak policy, legal and

regulatory frameworks; weak institu-

tiona l s tructures a nd sys tems ; overs ized

public a dminis tra tion; w ea k civil soc iety

and civic participation; inadequate data

and information; inadequate stand-

ards and weak quality infrastructure;

overlapping mandates; limited social

protection and support systems; and

wea k manag ement of environment and

clima te c hang e. This is exa ce rba ted a

weak; decentralisation system, slow

implementation characterised by long

procurement cycles, poor enforcement

of sta nda rds a nd regula tions, a nd inef-

fective monitoring and evaluation.

c . Id eo lo g ic a l d is orienta tio n; c o un-

tries that have attained upper middle

income status have clear and well de-

fined national ideologies. Our politicalhistory has not provided clear ideologi-

cal direction to guide the countrys de-

velopment pa th. This ha s led to fa ilure

to establish and implement a national

va lue sys tem. The va lue sys tems incul-

cate values such as; patriotism, work

ethics, integrity, positive attitudes and

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| 7U G A N D A V IS IO N 2 0 4 0

denied the c ountry long te rm a nd c hea p

investment ca pita l.

j. Unfa voura ble Demog ra phic s

Profile; Uganda has one of the young-

est populations in the world with nearly

half of them a ged below 15 years d ue to

a historically high and constant fertility

rate of about 6.7 children per woman.

This ha s res ulted in a n unfavo ura ble

demographic profile made up largely

of dependa nts. These d ependa nts a re

either too young to work, and yet they

consume the bulk of public services. In

addition, the high growth rates arising

out of the high fertility are putting pres-

sure on d elivery of se rvic es such a s ed -ucation and health.

1.5 Structure of the Document

15. Chapte r one o f this Vis ion covers

the background, context, Vision thrust

and also discusses the challenges to

development that the country faces.

The S ec ond c ha pter loo ks a t the Vis ion

aspirations and targets, and policy re-

forms to be undertaken. Chapter three

on the other hand covers the growth

trends a nd key Ma c ro-eco nomic s tra te-

gies. Chapter four presents the identi-

fied oppo rtunities a nd the funda menta ls

that need to be strengthened in order

to harness these opportunities. Chap-

ter Five discusses social transforma-

tion while chapter six covers the gov-

ernance tra ns formation req uired . The

last Chapter covers implementation of

thes e s trateg ies over the Vis ion pe riod .

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Chapter2

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THE VIS ION AS P IRATIONS ,

P RINC IP LES , TARG ETS AND P OLIC YS HIFTS

2.1. Aspirations

16. Na t io nw id e c onsulta t io ns w e re

co nducte d involving various s ta kehold-

ers a nd consensus w as reac hed on the

following aspirations for Ugandas fu-

ture development.

a . Uga nda ns as pire to live a nd

work in a peaceful, secure, harmoni-

ous and stable country, and at peace

with its neighbours, where the rule ofla w preva ils a nd res pec t for funda men-

tal human rights is observed. Ugan-

da ns w a nt a co rruption free na tion w ith

strong democratic structures and sys-

tems empowered to be in charge of

their ow n des tiny.

b . Ug anda ns a spire to ha ve unity

in diversity and equal opportunities ir-

respective of gender, tribe, ethnicity or

religion. Uga nda ns a spire for a prog res -

sive and developmental culture that

blends traditional beliefs and national

values. Ugandans aspire for a future

in which men, women, youth, children,

and persons with disabilities are em-

powered to participate as equal part-

ners in development.

c . Uga nda ns des ire to be re-

sourceful and prosperous nationals

contributing to national development

through gainful employment, savings

and investments. Ugandans desire to

earn high incomes and have a stable

ec ono mic environme nt. They a spire to

be p a rt of a s trong Eas t Africa n Fed era -tion.

C h a p t e r

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10 | U G A N D A V IS IO N 2 0 4 0

d. Uga nda ns des ire to ha ve a ccessto affordable quality health and educa-

tion services. Ugandans aspire for a

healthy, literate and well informed soci-

ety. We d es ire to live in clea n a nd w ell

planned settlements with access to all

social amenities. Uganda aspires to be

a soc iety free o f hunger with strong s o-

cia l sa fety nets.

e. Ug anda ns des ire to ha ve w orld

class infrastructure and services, and

mod ern technolog y to improve produc -

tivity and production. Ugandans also

aspire to have access to clean, afford-

able and reliable energy sources to fa-

c ilita te indus tria liza tion.

f. Uga nda ns des ire a g reen econ-

omy and clean environment where the

ecosystem is sustainably managed

a nd the livea bility of the urba n s ys tems

grea tly improved .

g . Ug anda ns a spire for a hig hly

moral and ethical society whose citi-

zens a re s trong in relig ious a nd s piritua l

values, and instilled with the highest of

ethical standards. A society in which

people practise and profess their cus-

toms, cultures and religious beliefs and

yet, feeling that they belong to one na-

tion. A soc iety w ith res ourceful a nd s ta -

ble fa mily units .

17. The se a sp ira t io ns , a s w ell a semerging development opportunities

and global trends, provide a basis and

foundation for the realisation of the Vi-

s ion 2040.

2.2. Principles of Vision 2040

2.2.1 Ownership

18. The realisa tion of Vision 2040

requires the wholehearted support of

a ll s ta keholde rs . The s a me a pplies to

the subsequent National Development

Plans derived from this vision and in-

tended to achieve its goals and ob-

jec tives . The o w nership is not o nly for

the formulation process but also for asmooth and successful implementation

of programmes, projects and other ini-

tiatives.

2.2.2 Political Will

19. Vis ion 2040 requires s t rong

backing from the political leadership at

all levels.

2.2.3 Good Governance

20. G o o d g o ve rna nc e is the p os itive

exercise of authority. It is characterized

by citizen trans forma tion a nd p a rtic ipa -

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tion in governance, control of corrup-

tion, political stability, and respect forthe rule of law, Government effective-

ness, regulatory quality and effective

knowledge management. It is a prereq-

uisite for achieving the required growth

rates and therefore social transforma-

tion. Good governance is therefore of

paramount importance for successful

implementa tion of Vis ion 2040.

2.2.4 Resource Availability

21. It will be extremely important to

ensure the availability of resources for

implementing the planned prog ra mmes .

This w ill req uire ta king mea sures to

eliminate wasteful spending, fightingcorruption, intensifying accountability,

improving the allocation of resources,

increasing efficiency in the use of re-

sourc es a nd g iving mo re a ttention to e f-

fectiveness through monitoring and re-

view s . Mob ilis a tion of do mes tic revenue

w ill be enha nced .

2.2.5 Balanced Development

22. While recognis ing tha t the econ-

omy will reflect Ugandas comparative

advantage, implementation of the Vi-

sion 2040 will encourage the harness-

ing of key opportunities by strengthen-

ing the necessary fundamentals. In this

way the countrys targeted growth willnot hinge on a few sectors, as many

others w ill ha ve the pote ntia l to c ontrib-

ute to grow th.

23. The se co nd dimens io n o f b a l-

anced development is linked to ensur-

ing tha t a ll reg ions of the c ountry bene fit

from growth of the national economyby equitably using national resources,

better infrastructure and other develop-

ment projects to realise higher invest-

ments levels required to fight poverty,

promote social equity and harmony.

The o ther dimension o f eq uity is promo -

tion o f gende r a nd huma n rights . The

Vision follows various international con-ventions and resolutions that promote

equal opportunities and enjoyment of

human rights for both men and wom-

en. Gender, disability and human rights

mainstreaming are a core part of the

pla nning proc es s

2.2.6 Behaviour Change

24. B e ha vio ur c ha ng e is need ed in

many public and private sector groups

a s w ell a s in ma ny citizens , a nd is c rucia l

for ra pid e co nomic growth a nd trans for-

ma tion. The peo ple w ill need to a do pt a

new attitude to public property, assets,

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12 | U G A N D A V IS IO N 2 0 4 0

amenities and the environment and be

pa triot ic to their c ountry. They s hould

demonstrate and exercise concern for

other citizens , e spec ia lly the elde rly, the

disa bled, a nd children. This inc ludes

being committed to promoting gender

eq uality so that men, wome n, boys a nd

girls have equal opportunities and ac-

cess to resources. Ugandans should

start appreciating hard work, discipline,time management and patriotism.

2.2.7 Linkage with the National

Planning Processes

25. The road to trans formation w ill

require careful planning and commit-

ment o f res ource s . This Vis ion 2040 isexpected to be an all encompassing

perspective plan for the thirty years,

w hich w ill a lso a ct a s a guide to a ny fu-

ture pla nning . In essenc e, a ll minis tries ,

departments and autonomous and

semi-autonomous entities will realign

their deve lop ment p riorities w ith the Vi-

sion.

2.2.8 Sustainable and Equitable

Development

26. S us ta ina b le d evelo pment is

about using resources to meet human

needs while preserving the environ-

ment. For several decades, develop-

ment has c onc entra ted on improvement

and advancement of economic, social

cultura l a nd po litica l cond itions a nd les s

on pres erving the environment. This ha s

resulted into global warming and other

a dverse environmenta l c onditions a s so -

cia ted w ith clima te cha nge. Less focus

on gender inequalities has also often

promoted discrimination against thefema le s ex. The implementa tion of the

Vision should ensure sustainable and

eq uita ble d evelopme nt.

27. The des ign and implementa t ion

of the Vision emphasizes sustainable

development through preservation of

natural resources such as forests andwetlands. Access to basic needs such

as education, health services, food,

housing and the equitable distribution

of incomes among all citizens shall be

promote d. As p a rt of implementing s us-

tainable development, every person

shall be assured of a life of dignity, in-

cluding a life in a society that respects

and helps realize human rights.

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2.2.9 Effective Implementation,

Monitoring and Evaluation

Mechanism

28. In the c ourse of the imple me n-

tation of the various Vision 2040 initia-

tives, it will be important to determine

w hether or not the co untry is on c ourse

towards achieving its goals and objec-

tives, whether or not progress is beingma de a nd s ucc ess being registered. An

effective implementation mechanism

should lead to the achievement of the

goa ls a nd objec tives . To this e nd, e ffec -

tive monitoring and evaluation will be

underta ken to provide releva nt informa-

tion w hic h w ill be use d to fine-tune, re-

orient, or otherwise alter the proposed

initia tives . Effec tive M&E is importa nt

for measuring and reporting progress

towards the planned objectives and re-

la ted ta rgets .

2.3. Vision 2040 Targets

29. In line with Vision 2040 and hav-

ing b enchma rked it w ith se lec ted UpperMidd le Inc ome (UMI) countries tha t ha ve

achieved similar level of development

status, a number of socio-economic in-

dicators and targets have been devel-

oped for Uga nda . Ta ble 2.1 pres ents the

ba seline a nd d es ired ta rge ts. These de-

velopment targets are reference points

Table 2.1: Baseline Status and Vision Targets

No. Development IndicatorBaseline

Status:2010

Target2040

P er c a pita inc ome US D 506 US D 9500

Percentage of population below thepoverty line

24.5 5

Income dis tribution(G INI Coeffic ient) 0.43 0.32

S ectoral compo sition o fG DP (%)

Agric ulture 22.4 10.4

Indus try 26.4 31.4

S ervic es 51.2 58.2

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Labor force distribution inline with sectoralcontribution (%)

Ag riculture 65.6 31

Indus try 7.6 26

S ervices 26.8 43

% sha re of na tiona l la bor force employed 70.9 94

Ma nufac tured exports a s a % of total

exports

4.2 50

G ross C a pita l Forma tion a s % of G DP 24.1 30

S a ving a s a % of G DP 14.5 35

IC T go od s &se rvic es a s a % of tota lexport

0 40

Tec hnolog y up-ta ke &diffus ion(Tec hnolog y Ac hieveme nt Index (TAI))

0.24 0.5

P ublic expend iture a s a % sha re o f R&Dto GDP

0.1 2.5

Innova tion a s mea sured by pa tentsreg is tered per yea r

3 6000

Elec tric ity consumption (kWh per ca pita ) 75 3668

% popula tion w ith a c cess to elec tric ity 11 80

Water consumption (m3per ca pita ) 26 600

% population with access to safe pipedwa ter

15 100

% of sta nda rd pa ved roa ds to tota l roa dnetwork

4 80

% of c a rgo freig ht on ra il to to ta l freight 3.5 80

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% of population in plannedsettlements

Urba n 51 100

Rura l 0 100

% level of urba niza tion 13 60

La bo r P rod uctivity (G DP

pe r Worker - US D)

Agriculture 390 6,790

Indus try 3,550 24,820

S ervices 1,830 25,513

Tota l 1,017 19,770

Life expec ta ncy a t b irth (yea rs) 51.5 85

Infa nt morta lity ra te per 1000 live b irths 63 4

Materna l mo rta lity ra te per 100,000 livebirths

438 15

Under 5 morta lity ra te per 1000 96 8

C hild s tunting a s a % of under 5s 33 0

Litera cy Ra te (%) 73 95

G ender Rela ted Development Index (G DI) 0.51 0.9

P opula tion g row th ra te 3.2 2.4

Fores t C over (% la nd Area ) 15 24

Wetla nd C over - % of to ta l a rea 8 13

C orruption P erc eption Index 2.5 7.1

S ource : NPA projec tions a nd b ench ma rked d a ta from va rious so urce s.

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2.4. Required Policy Reforms and

Shifts

30. Over the Vis ion period , the

planning approach will be based on

harnessing strategic opportunities bystrengthening the relevant fundamen-

tals that facilitate maxima returns from

the o pportunities . This w ill be c oupled

w ith increa s ing the level of the c ountrys

competitiveness to enable production

of globally competitive goods and ser-

vices. In addition, efforts will be geared

towards improving social development

indicators while strengthening govern-

a nce s yste ms a nd s tructures . To a tta in

this Vision all development plans at all

levels shall follow this planning ap-

proa ch to foster fa ster so cio-economic

transformation.

31. A q ua s i-ma rke t a p pro a c h, w hic h

includes a mix of Government invest-

ments in strategic areas and private

sector market driven actions, will be

pursue d . The priva te s ec tor w ill rema in

the engine of growth and development.

Government will continue its facilitat-

ing role in provis ion o f co nducive polic y,

regulatory and institutional framework.

Government will also promote and en-

c ourag e pub lic-priva te pa rtnerships in a

rational manner. Furthermore, Govern-

ment will invest in strategic areas and

a rea s of na tiona l interes t. In a dd ition,

the G overnment w ill continue to pursue

outward-oriented policies by encour-

aging foreign investments and exports

with high value addition, as well aspursuing sound macroeconomic policy

and management.

32. There sha ll be continuous re-

view and change of the architecture of

G overnment service de livery s ys tem to

enable Government act as a unit and

deliver public services that are respon-sive to the needs of the people a nd co g-

nizant of the global dynamics. Govern-

ment will a dopt a b usiness a pproa ch

in the implementa tion o f this Vis ion. The

local government service delivery sys-

tem will be reviewed and restructured

for better service delivery and wealth

creation. Continuous institutional re-

s tructuring w ill be implemented a nd the

country will adopt new public manage-

ment tec hniq ues imme dia tely. This w ill

enable Government to deliver services

more efficiently and effectively while

harnessing synergies.

to indicate the desired level of develop-

ment and social-economic transforma-

tion.

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33. G o ve rnment w ill ma ke la nd re -

forms to facilitate faster acquisition of

land for planned urbanisation, infra-

structure development, and agricultural

commercialisation among other devel-

opments.

34. To a c hie ve fa s te r so c io -e c o-

nomic transformation, Government

will invest in better urban systems thatenhance productivity, liveability and

susta ina bility. Thes e urba n a rea s w ill

be centres of industrial development,

financial, trade, education and other

services that will foster economic pro-

ductivity. Uganda will strengthen urban

infrastructure and public service facili-

ties, increase the overall carrying ca-pa city of cities a nd tow ns a nd ra ise the

level of urban management and servic-

es. Government will adhere to scientific

pla nning a nd s tric t ma na ge ment. The

promotion of urbanization will enable

Government to provide better services

like basic physical infrastructure, hous-

ing a nd s oc ia l a menities . It w ill a lso free

up land for mechanized and commer-

cial agriculture.

35. G o ve rnment w ill e mp lo y a nd

support policies aimed at leapfrogging

ma ny area s o f the ec onomy. The focus

of leapfrogging will be in the areas of

science, technology, engineering and

innovation, human resource develop-

ment, public sector management, and

private sector development. In addition,

a na tiona l Innovation s ys tem w ill be de-

veloped and supported over the Vision

period.

36. To p ro vid e the ne c essa ry im-

pulse to the economy, Government will

embark on front-loading of investmentsin infra s tructure. The key infra s truc-

ture areas will be in oil and gas, energy,

tra nsport, w a ter for prod uction, S TEI

a nd IC T.

37. G o ve rnment w ill re fo rm a nd

optimize the industrial structure while

establishing a modern industrial sys-tem that will give impetus to industrial

transformation. Efforts will be geared

to transforming and upgrading manu-

facturing industries and technology

upgrading in enterprises. Uganda will

accelerate the cultivation and develop-

ment of strategic emerging industries

inc luding the ne xt g enerat ion IT indus-

tries, aerospace industries, integration

of telecommunication network and in-

ternet. Government will give impetus to

the development of industries in areas

of new materials industries, bio-tech-

nolog y, hea vy indus tries a nd e q uipment

manufacturing.

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38. A policy on the na t iona l va lue

system will be developed and imple-

mented to address the current ideo-

logical disorientation, citizens attitudes

and mind sets, non-progressive cultural

practices to nurture patriotism and na-

tiona l unity. This w ill produce a res po n-

sive and productive citizenry required

for tra ns formation. There is nee d to

foster a sense of optimism, unyieldingspirit and a call to fulfil our constitution-

al duties and responsibilities as citizens

using every a va ila ble op portunity.

39. G o ve rnment w ill re vie w a nd

strengthen foreign policy to enhance

collaboration in accordance with exist-

ing and future agreements, standardsand protocols within the framework of

Eas t Africa n C ommunity, o ther reg iona l

blocs, African Union and global com-

munity, for the rea lis a tion of this Vis ion.

40. To s treng then the three a rms

of government and ensure checks and

balances, and taking decisions that

have national interest: first, ministers

will not be members of Parliament to

foster sepa ra tion of pow ers; and sec -

ond, the judiciary will be reformed to

make it more proactive.

41. Government w ill review deve l-

opment financing policies to facilitate

faster accumulation of development

infra s tructure. The sources o f funding

will include; tax and non-tax revenues,

Public Private Partnerships (PPPs),

co nces siona l loa ns a nd g ra nts, revenue

from oil and gas and borrowing from

do mes tic a nd internat iona l ma rkets . Ini-

tially, government will make extra effortto increa se domes tic tax revenue a s the

main mode of financing Government

expenditure. Government together with

Development Partners will also explore

a lterna tive fina ncing mec ha nisms to a c-

ce ss signific a nt funds from c omme rcial

and investment banks at concessional

terms for front-loading infrastructuredevelopment. One of the alternative fi-

nancing mec hanisms is to use g ra nts to

sub sidize a nd low er the interes t ra tes of

co mmercia l loa ns.

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3Chapter

Industrialisation will be

critical in absorbing thecountrys labour force.

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G ROWTH TRENDS AND

MAC ROEC ONOMIC S TRATEG IES

3.1. Growth Trends

42. Ug a nd a s ec ono mic g ro wth

performa nce s ince the 1960(s ) ha s b een

rela tively slow c ompa red to s ome o f the

East Asian countries which were at the

sa me level of developme nt, for example,

South Korea and Malaysia (see figure

3.1). Over a period of nearly 50 years,

Uga ndas G DP per ca pita increas ed

Source: World Bank online database

Figure 3.1: Ugandas Comparative Growth Performance with Selected UMICountries

C h a p t e r

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from USD 63.8 in 1962 to only USD

506 in 2010. On the other hand, South

Korea GDP per capita increased from

US D103 to US D 21, 000 over the sa me

period.

43. The G D P g ro w th ha s va rie d o ve r

the period with the highest average

growth experienced between 2005 and

2010 as shown in figure 3.2. Although

growth in per capita income has been

slow, the real GDP (billions of Dollars)

ha s bee n s tea dily increas ing s ince 1986

exc ept fo r period of 1988 to 2002 due to

re-basing. Since 2003, the cumulative

growth gradient has been steeper an

indication that the country is in a clear

stage of take-off.

Figure 3.2: GDP & GDP Per-Capita Trends (1962 - 2010)

Source: World Bank online database

44. The main d rivers o f the g rowth as

depicted in figure 3.3 have been posts

and telecommunications, construction

and mining sectors. More recently, the

growth of the telecommunication and

mining sectors have been instrumental

in the c ountrys g row th la rgely d riven b y

tec hnolog y improvements in IC T a nd in-

vestme nts in oil a nd g a s s ec tor.

45. Ug a nd a s expo rts bo th b y c om-

position and value have been growing

for the last ten years. However, the im-

ports ha ve been increas ing a t fa s ter ra te

mainly due to importation of high value

consumer and investment goods thus

widening the trade deficit. As a result

the trade balance has more than dou-

Years

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Figure 3.3: Growth Rates of Key Sectors

Source: UBOS (Statistical Abstracts)

Figure 3.4: The Trade Balance (1990 - 2010)

Source: UBOS (Statistical Abstracts)

bled from USD1.2b in 2006 to USD2.6b

in 2010. The trend of the tra de d efic it is

a s presented in figure 3.4. The b a la nceof payments ha s a lso been unfa voura ble

w ith a de teriora ting trend in rec ent yea rs

pa rtly due to low dema nd for Uga nda s

exports in ad vanc ed e co nomies . These

exports a re ma inly c ha ra cte rized by pri-mary, low value and non-hi-tech prod-

ucts.

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Table 3.1: Destination of Ugandas Exports (% of total exports)

Region 2003 2004 2005 2006 2007 2008 2009 2010

COMESA 27.7 26.8 30.7 33.1 53.5 58.3 61.3 59.0

Other Africa 8.6 5.7 4.8 4.0 6.8 5.1 5.6 5.2

European Union 26.3 27.3 31.1 17.7 17.4 18.2 14.6 16.9

Other Europe 14.8 17.1 10.1 3.3 4.9 6.3 4.1 3.2

North America 2.7 2.9 2.3 1.1 1.3 0.8 1.6 1.1

Middle East 3.5 5.6 10.8 13.3 10.2 5.5 4.1 6.1

Asia 9.3 8.9 7.5 5.0 3.9 3.9 4.3 4.8

South America 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.1

Rest of the World 0.4 0.0 0.1 0.0 0.0 0.1 0.1 0.2

Unknown 6.6 5.7 2.5 2.4 2.0 1.9 4.2 3.4

Source: UBOS (Statistical Abst racts various issues)

47. The revenue collect ion perfor-

mance measured by tax to GDP ratio

ha s va ried. The ra tio s too d a t a bo ut 12.6

per cent in 1970/71 de c lining to 6.5 pe rcent b y 1989/90. Revenue performa nce

ha s s ince improved , pea king a t 15.8 per

cent in 2006/07 be fore d ec lining to 13.1

pe r cent in 2008/09 (UB OS ). This is s till

below the Sub-Saharan Africa average

of a bo ut 20 per cent a nd s till low er tha n

Ta nza nia a nd Kenya a t 17 per cent a nd

19.5 per cent, res pec tively (World B a nk

46. Tab le 3.1 ind ica tes tha t reg ion-

al trade is taking an increasing share

of Ugandas exports, while the Middle

East is also emerging as a major export

de s tina tion. The Europea n Union w hich

in the past was the leading destination

for Ugandas exports now accounts for

about one quarter of total exports.

online database). Domestic resources

are very critical because they help the

country to mitigate the adverse impact

of vo la tility a nd uncerta inty in a id flow s .

3.2. Ugandas Competitiveness

48. The country s competitiveness

measured by the competitiveness of its

goods and services is one of the big-

gest challenges to foster transforma-

tion. Ac cording to the World Eco nomic

Forum Global Competitive Index 2010ranks Uganda number 121 out of 142

countries. In comparison with countries

Uganda is benchmarking, our level of

competitiveness is still very low, espe-

cially in key transformational indicators

such as infrastructure, techonological

rea diness , innovation and higher educ a -

tion a nd t ra ining.

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Figure 3.5: Ugandas Competitivenes in Comparison with Upper Middle

Income Countries

49. The World Economic Forum,

G lob a l Competitivenes s Repo rt 2009/10

ranks Uganda 112th out of 183 coun-

tries on a w ide rang e of bus iness indica -

tors. This ranking is ba sed on ide ntifiedfac tors tha t affect the bus iness environ-

ment in a country including; registering

prope rties , tra ding a cross bo rde rs, p ro-

tecting investors, starting a business,

enforcing contracts and getting credit.

The ma jor co ns traints a ffec ting d oing

business in Uganda include; poor ac-

cess to finance, corruption, high tax

rates, inadequate supply of infrastruc-

ture, poor work ethic and Government

burea ucrac y, a s show n in figure 3.6.

Source: World Economic Forum, 2009/10

50. These cons t ra ints have hindered

the growth o f Uga nda s private sec tor. It

is still weak and has been struggling to

respond to the challenge of becoming

the eng ine of grow th in the country. As

of 2010, it is es tima ted tha t nea rly 90per

ce nt of the private sec tor are micro a nd

small enterprises yet employing over

80per cent of the total workforce in the

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Figure 3. 6: Most Problematic Factors for Doing Business

Source: World Economic Forum, Global Competitiveness Report 2009-2010

country and producing largely for the

do mes tic ma rket. Other bo ttlenec ks to

private sector growth include: limitedaccess and use of modern technolo-

gy; insufficient engineering manpower;

negative attitude towards work leading

to low labour productivity; limited ac-

cess to credit; insufficient incentives;

high production costs; low productivity;

and low profitability.

51. The labour force in agriculture

slightly reduced from 71.6per cent in

2005/06 to 65.6 p er c ent in 2009/10,though significant reduction was expe-

rienced in the sector share contribution

to G DP. The lab our force in the indus tria l

sector remained nearly the same over

the period . There w a s a s light increa se

in the labour force employed in the ser-

vices sector but this is not commen-

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Figure 3.7: Labor Force Distribution by Sectors

Source: UBOS (National Household Surveys-various years)

surate with the increase in the sectors

contribution to G DP. This ina bility o f the

industrial and service sectors to absorb

the c ountrys la bo ur forc e is a cha llenge

that shall be addressed for effective

transformation.

79.8 78.369.1 71.6 65.6

15.2 17.3

23.4 22.3 26.8

5.0 4.4 7.5 6.1 7.6

0

10

20

30

40

50

60

70

80

90

100

1992 1999/0 2002/3 2005/6 2009/10

SizeofLabourForce(%)

Survey Year

Agriculture, forestry and fishing Services Industry

3.3. Unemployment

52. Ug a nd a ha s a big c ha lleng e o f

a labour force that is largely under or

unemployed due to inappropriate skills

a nd the slow la bour abs orptive ca pa city

of the ec onomy. The res ult ha s be en a

la rge number of unemployed youth w ho

are becoming a social and economic

threa t. The fa ilure to ma tc h the skills

needed in the economy creates a gap

in the huma n c a pita l w hic h is c ritica l for

economic and social transformation.

3.4. Growth Strategy

53. The thrus t o f Uga nd a s g ro w th

s trategy for the rea liza tion of this Vis ionis anchored around harnessing of op-

portunities by strengthening the funda-

mentals.

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54. As a result o f g loba liza tion and

the unpredictability of many macro-

economic variables, it is a challenge

to estimate the macro-economic pa-

rameters over a thirty year period with

a fair de gree of a cc ura cy. This s tra tegy

provides for a broader perspective of

direction based on empirical forecasts

and benchmarking with selected UMI

countries.

55. B a s ed o n the a na lys is o f e xperi-

ences of UMI countries, global trends,

Ugandas available opportunities, cur-

rent growth trends a nd projec ted po pu-

lation growth rate, Uganda will achieve

a ta rge t of US D9500 per ca pita by 2040.

56. The pro je c te d g ro w th o ve r

the period will have a lower bound

of USD6200 and an upper bound of

USD12000. All efforts will be geared

towards enabling the country to reach

the upper bound of USD9500 as seen

from fig . 3.8. The upper bo und s c ena rio

is associated with per capita income

of about USD12,000, that is, the bor-

derline between the upper middle and

high income c ountry sta tus . The likely

sce nario is w here the per c a pita inco me

is USD9500, the average of the upper

middle income countries whose per

ca pita is a t lea s t US D 6,200. The low er

bound scenario is where per capita in-

come is USD 6,200, the average of all

uppe r midd le inc ome c ountries . The ta r-

get fo r this Vis ion therefore is to a chieve

the likely s cena rio o f US D9,500 and w ith

this scenario the countrys total GDP is

expected to be about USD580bn by

2040.

57. As sho w n in the fig ure 3.8,Uganda will graduate into a lower mid-

dle income country by 2017, progress-

ing to an upper middle income cate-

gory by 2032 and attaining its target of

USD9500 in 2040. Projections therefore

indicate that Uganda is likely to attain

a first world status within the next fifty

years.

58. The pro jec ted popula t ion g rowth

assumes implementation of the nation-

al population policy and other policy

cha nges in educa tion a nd health among

others will result into a gradual slow-

down in population growth rate from

the current 3.2 percent to 2.4 percent

per annum resulting in a population of

a bout 61million by 2040.

59. Tab le 3.2 ind ica tes es t ima tes

of nominal GDP and associated real

growth rates at which the economy is

likely to grow, to achieve the USD9500

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Figure

3.8:TheGrowthPathto

theUpperMiddleIncomeStatusby2040

S

ource:

NPAEs

tima

tes

2010;

506

2017;

980

2032:

4,

36

3

2040;

9,

480

02000

4000

6000

8000

10000

12000

-100

200

300

400

500

600

700

800

2000

2005

2010

2015

2020

2025

2030

2035

2040

GDPpercapita(US$)

GDPinUS$,Billions

Year

GDPandGDPPerCapitaTargets

UpperLimit

Target

LowerLimit

GDPperCa

pita(SecondaryAxis)

LowerMiddleIncome

Upper

MiddleIncome

LowerIncome

9500

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per capita. Under this scenario eco-

nomic growth rate is expected to rise

from the current 5.7 per cent to a five

year average of 8.4per cent per annum

by the year 2025 before it gradually de-

clines to an average of 7.8per cent in

the last five years of the Vision. What

is critical in this scenario is having the

a bility to sus ta in this grow th w ith some

inbuilt momentum for high real growthduring the period. Ugandas nominal in-

come w ill g row fas ter throug h the Vis ion

period with GDP projected to multiply

by 1.5 (2015-2020) to 2.6 (2035-2040)

times every five yea rs .

60. The pro jec ted g rowth trend o f

the G DP is a c hieva ble sinc e other c oun-tries have been able to achieve even

higher growth in income at five year in-

tervals. Da ta a va ila ble from World B a nk

indic a ted tha t ma ny countries w ere a ble

to double their output every five years

in the recent years. Between 2000 and

2010 the countries such as Zambia,

Ghana, Azerbaijan, Sudan, Angola, Ka-

zakhstan, Indonesia, India, China, Ku-

wait, and Qatar were able to double

their GDP every five years for over 10

yea rs . This therefore de monstra tes the

viability of Ugandas projected growth

and consolidates support for Ugandas

bid to develop its capability to sustain

high output growth every five years in

the Vis ion period .

61. As noted in tab le 3.2, agriculture

will grow at an average rate of about

five per cent, while industry and ser-

vices sec tors will grow a t a n average of

over nine per c ent. Ug a nda w ill a chieve

this by sustaining growth in the indus-

trial sector between 8 and 10 percentper annum as a result of upgrading the

industrial structure, changing factor en-

dowments, introducing new technolo-

g ies a nd rea lignment o f infra s truc ture to

the new ec ono mic rea lities . While prior-

ity w ill be on fac ilita ting the e ntry o f new

firms in industries that are in line with

the countrys existing comparative ad-vanta ge , new o nes w ill be d eveloped in

strategic a rea s s uch as the petroc hemi-

cal industries as offshoots from the oil

refining ind us try. Agric ulture w ill be s up-

ported to trigger agro based industries,

food a nd nutrition sec urity.

62. Ac hie ving the se g ro w th ta rg ets

require targeted investment in the key

se cto rs of the ec onomy like the o il a nd

gas, manufacturing, tourism among

other sectors. In addition, sustaining

these growth rates will require contin-

ued implementation of prudent fiscal,

monetary and exchange rate policies.

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Table 3.2: The GDP Trend and Growth Rates Over the Vision Period

Economic

Sector

Nominal GDP at Market Prices (USD, Billions) Real GDP Growth Rates

2010

2015

2020

2025

2030

2035

2040

2012-2015

2016-2020

2021-2025

2026-2030

2031-2035

2036-2040

Total GDP 17.0 24.2 41.2 83.6 167.2 319.6 580.5 8.44 8.58 8.35 8.22 8.07 7.83

Agriculture 3.8 5.3 7.8 13.6 23.4 38.5 60.1 5.24 5.37 5.15 5.02 4.88 4.65

Industry 4.5 6.7 12.0 25.1 51.4 99.6 182.6 9.67 9.52 9.05 8.71 8.40 8.04

Services 8.7 12.1 21.5 44.9 92.5 181.5 337.8 9.30 9.35 9.05 8.85 8.65 8.37

Source: NPA, Estimates

S ignific a nt reforms w ill continuous ly b e

implemented in the financial sector in

order to increase resource mobilization

and access taking into account global

dyna mic s . Further reforms w ill be need -

ed in the trade sector and in resource

mobilization and management with the

view to reducing overhead, and overall

co s t of do ing b usiness . G overnment will

invest in collecting and providing infor-

mation in support of private investment

dec ision ma king in reg a rd to new prod -

ucts a nd tec hnolog ies . G overnment will

further facilitate coordination of invest-

ments and provide compensation for

externalities for firms that take risks

and invest in new but strategic areas,

w ithout c omp romis ing the rights a nd re-

spons ibilities of the c itizens .

63. In the early years of this Vis ion,

the exploitation of the oil and gas re-

so urc es w ill be crucia l to s pur ec onomic

grow th a nd d evelopme nt in the c ountry.

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However, for the country to fully benefit

from the oil and gas resources and to

a c hieve its Vis ion w ill req uire fis ca l pru-

denc e in the use of revenues from thes e

resources.

64. Investment in key infras tructure

such as energy generation, road and

rail, and social infrastructure and in-

vestme nt in tec hnolog y enha ncing p ro-duction processes will spur productiv-

ity and hence the overall growth of the

economy.

3.5. Key Sectors that will influence

GDP Growth over the Vision period

65. Fig ure 3.9 sho w s s truc tura lchange in sector contribution to GDP

that is likely to take place up to 2040,

based on the likely growth trends sce-

nario. It show s that the services s ec-

tor is currently the la rges t c ontributo r to

G DP a nd w ill co ntinue to do minate up to

the year 2040, followed by industry and

a griculture sec tors . The ma jor trans for-

mation will however be achieved with

further movement of labour force from

a griculture to industry a nd s ervice sec -

tors. This w ill req uire a ma jor policy s hift

in the de velopment o f the indus tria l sec -

tor and investment in human capital in

Ug a nda . The co ntinued growth of sec -

tors such as the telecommunication,

construction and mining will be crucial

in d riving the g row th o f the c ountry.

66. The s t ruc tura l trans formation

of the economy will continue with the

service s se cto r contributing the highes t

proportion to G DP, follow ed by indus try

a nd a g ric ulture. In line w ith this , a d ra s-

tic c ha nge is to oc cur in the perce ntag eshares of the labour force employed in

these sec tors, w ith fa ste r redistribution

from the c urrent 65.6% in a g riculture to

the other sec tors. G overnment will fos-

ter increa sed mobility o f la bo ur throug h

creation of incentives for an increase in

releva nt tra ining a nd skills re-orienta tion

and provision of greater incentives fornot only higher innovation at firm level

but a lso increas ed fac tor prod uctivity.

3.6. Macroeconomic Strategies

67. Over the long-te rm, Government

will expand and exploit the productive

potential of the economy by ensuring

that there is appropriate growth in in-

vestment spending as a proportion of

national income, increase in growth of

priva te c a pita l a nd la bo ur utiliza tion a nd

productivity. Inc entives w ill be provided

to increase the size of the productive

labour by fostering labour mobility, in-

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32 | U G A N D A V IS IO N 2 0 4 0

Figure 3. 9: Sector Shares of GDP (Actual and Forecasts)

crease research and development ac-

tivities and the utilization of research

a nd innovation prod ucts .

68. Ma inta ining ma c ro ec o no mic

stability will be critical for the imple-

mentation of Vision 2040 managed

through short and medium term instru-

ments. Macro-economic stability is a

necessary but not sufficient conditionto achieve the desired growth. Improv-

ing effic iency a nd increas ing tota l fac tor

productivity as indicated above will be

the core to achieve Vision 2040 growth

targets.

3.6.1. Savings and Investments

69. G o ve rnment w ill e nsure tha t

there a re mec hanisms to increa se gross

national savings from the current level

of 14.5 percent to about 35 percent of

G DP b y 2040. As a s ourc e of invest-

ment finance, Government will among

other things rationalize pension funds

management. Strategies will be devel-oped to promote a sa vings culture a nd

create diverse saving opportunities in

the c ountry.

(%o

fGDP)

Years

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Figure 3.10: Savings to GDP Ratio of Selected Countries

70. Over the Vis ion period , Govern-

ment investment expenditure will in-

creas e w ell be yond the c urrent levels of

a bout 24 percent of GDP a nd the area s

of investments will include; infrastruc-

ture a nd huma n ca pita l de velopme nt.

3.6.2. Financial Services

71. Access to financ ia l se rvices s t illremains low, for example by 2009, only

28 percent of the population had ac-

ce ss to forma l financ ia l se rvice s . Mos t

small and medium scale enterprises in

the country still obtain credit from infor-

ma l fina nc ia l service providers. This is a

serious challenge to access to finance

for development, particularly affordablelong term finance.

72. The re c o ntinue s to b e insuf-

ficient financial services infrastructure

across the country, limited number of

bank branches and poor access to ru-

ra l fina ncia l servic es . Due to low s a v-

ing culture, there is a shortage of de-

velopment finance and the available

funds are extremely expensive. On the

demand side, the levels of creditwor-

thiness and enterprise managementcapacity contribute to the high cost of

cred it. On the supply s ide , there a re s till

high intermediation costs, including the

cost of monitoring and enforcement of

loa n contrac ts . There a re high risks

and uncertainties that make develop-

ment fina nce expens ive. These fac tors

affect access to financial services yetthere are market and institutional fail-

-

5

10

15

20

2530

35

40

45

1970-1975

1975-1980

1980-1985

1985-1990

1990-1995

1995-2000

2000-2005

2005-2010

Savingsto

GDP

Rato

Years (Period)

Uganda

Malaysia

Botswana

South Africa

Mauritus

Korea Republic

Source: World Bank, 2011

Period (Years)

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