More exports, private sector investment, better programme implementation key to sustainable development in Uganda

Nov 4, 2015

The panel discussing the key issues that affect Uganda’s economy at the recent high level dialogue on the same topic. It included Dr. Albert Musisi Commissioner, Minsitry of Finance, Planning and Economic Development, Dr. Joseph Muvawala, the Executive Director of the National Planning Authority, Dr. Adam Mugume, Head of Research at Bank of Uganda, Ms. Margaret Kakande, Head of the Budget Monitoring and Accountability Unit at the Ministry of Finance, Planning and Economic Development and Ms. Rachel Ssebudde of the World Bank. (Photo credit: UNDP Uganda 2015)

Kampala - Uganda needs to increase its export base, encourage more private sector investment especially in the manufacturing sector and ensure better implementation of the government programmes to enable achievement of sustainable development.

This was the call made at the High Level Policy Dialogue on Uganda’s economy held at Makerere University early this week. The dialogue whose theme was directions, prospects and challenges was headlined by Dr. Louis Kasekende, the Deputy Governor of Bank of Uganda who called for more private sector engagement in critical sectors in order to achieve development.

“In order to achieve sustainable development, we must attract much more private investment into labour intensive, modern traded goods’ industries, to create formal sector employment while strengthening the economy’s external performance to reduce trade and current account deficits and curb the buildup of external liabilities,” Dr. Kasekende said while delivering his keynote address.

He added that a shift from low income to middle income status usually entailed major structural change including a shift of labour out of traditional, low productivity sectors into labour intensive, modern industries, a shift of labour from self-employment to formal wage employment and a rapid growth in labour productivity.

Dr. Kasekende pointed out that most of Uganda’s labour force was still self-employed in agriculture while the share of the working population in the formal sector businesses was at 3%, which is still very small. He added that the share in the formal manufacturing sector was even smaller at 0.7%, making the average annual labour productivity growth rate a meagre 2%.

“In many developing countries, the growth of labour intensive traded goods industries, for example, manufacturing, has been the main driver of structural change,” he said.

Presenting on the fiscal side of the economic planning, Dr. Albert Musisi of Ministry of Finance, Planning and Economic Development pointed out that while a combination of a country’s fiscal and monetary policies are required to direct its economic goals, it is the fiscal decision making that directly influences the direction of development strategy and priorities.

“It is therefore critical that there is alignment between fiscal policies and the country’s development agenda, otherwise desired outcomes cannot be achieved,” Dr. Musisi said.

He added that the alignment between fiscal policies and the country’s development agenda is getting better now although it’s important to consider the capacity to mobilise domestic and external resources and ensuring their strategic use to achieve set development goals

Adding to the discussion, Ms. Almaz Gebru, the UNDP Uganda Country Director, said the dialogue had come at the right time when nations globally, are deepening discussions on how to deliver on the sustainable development agenda within the national development planning and implementation frameworks.

“As we think about sustainable development, it is important to reflect on the results of the final Millennium Development Goals (MDGs) Report for Uganda (2015), which showed significant progress on a number of fronts, including poverty reduction, improved access to HIV treatment, and reversal of malaria incidence, however, it also recognizes a number of challenges in areas of education, and health. We need to ensure that all citizens are not only able to access these services but also able to get quality care,” she pointed out.

A panel discussion that included; Dr. Albert Musisi, Dr. Joseph Muvawala, the Executive Director of the National Planning Authority, Dr. Adam Mugume, Head of Research, Bank of Uganda, Ms. Margaret Kakande, Head of the Budget Monitoring and Accountability Unit at the Ministry of Finance, Planning and Economic Development and Ms. Rachel Ssebudde of the World Bank called for more transparency and better coordination to avoid duplication of services and better implementation.

“We have one of the best development plans and several other policies however we have an implementation crisis in this country. We should therefore ask ourselves how we can get back to effective implementation of these good policies,” Dr. Muvawala said.

The dialogue which was organised by the Makerere University, School of Economics with support from UNDP Uganda and the Ministry of Finance and Economic Planning attracted participants from academia, Government, private sector and Development Partner agencies.

Thanking the School of Economics for hosting the event, Ms. Gebru said academia had a critical role in deepening the policy space.

“Academia is relevant only when it is able to influence the political economy through policy relevant research, and high quality graduates that can influence the direction of development policy. The knowledge products from such discussions should be able to communicate the efficiency and effectiveness of development interventions to guide and influence decision making,” she said.

This was one of a series of high level interactive discussions that UNDP will be hosting in collaboration with Government and other partners, to raise awareness, share and disseminate knowledge, as well as best practices on a multiplicity of policy issues related to sustainable development.

UNDP Around the world

You are at UNDP Uganda 
Go to UNDP Global