## 1. Top Floods and Droughts by Number of People Affected (2000-2021) ## Source details **Canonical URL:** [1. Top Floods and Droughts by Number of People Affected (2000-2021)](https://www.imf.org/-/media/files/publications/cr/2022/english/1ugaea2022002.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2022/english/1ugaea2022002.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2022/english/1ugaea2022002.pdf.json) --- ### A. Context and exposure - Uganda is prone to floods and droughts; floods accounted for 55 percent of natural disasters in 1985-2021. - Droughts represented 7 percent of total natural disasters in the past four decades but have affected the largest number of people. - Agriculture absorbs about 70 percent of the working population, increasing vulnerability to weather shocks. - Uganda’s contribution to world's total greenhouse gas emissions is estimated at 0.099% (Ministry of Water and Environment, 2015a). ### B. Historical impacts on people and GDP - Between 2002 and 2010, droughts impacted over 3 million Ugandans. - The severe 2016/17 drought impacted more than 1 million people in Uganda. - The 2016/17 drought was a main reason for a significant growth slowdown; by 2019 Uganda’s level of real GDP was 3½ percent lower than in a counterfactual without the 2016/17 drought. - Cross-country sub-Saharan Africa estimates: real GDP growth loss averages 0.3 percentage points for droughts and 0.4 percentage points for floods in the year of the disaster occurrence (IMF, 2020). - Disruptive disasters are defined as those events with fatalities plus 0.3 times the affected persons exceeding 0.01 percent of the population. ### C. Climate trends and projections - Since the 1930s average temperature in Uganda has increased by 1.7°C. - Observed rainfall: March–May has witnessed an average decrease of 6.0 mm per month, per decade since the 1960s. - IPCC (2014) projections: maximum temperatures will rise between 1°C and 2.2°C by 2050; minimum temperatures will rise between 0.8°C and 2.5°C by 2050, depending on global emission scenarios. - Warm Spell Duration Index is expected to increase by 20-50 days. - Climate-induced losses in agriculture, water, infrastructure and energy sectors could collectively amount to US$273-437 billion (2.8-4.5% of cumulative prospected GDP) between 2010 and 2050. - Major export crop losses: combined economic losses of about US$1.4 billion by mid-century; climate-induced losses from reduction of Arabica coffee yields expected to range 10–50%, potentially reducing foreign exchange earnings by $15–$80 million per year. ### D. Adaptation needs and constraints - Uganda loses more than 800 km2 of its wetlands every year. - Forest coverage goal: increase from 14% to 21% by 2030, but restoration has not kept pace with annual loss. - Total climate adaptation budget estimated at US$120 million per year for 2021-2030 (Ministry of Water and Environment, 2015b), equivalent to 0.3 percent of GDP or 2.1 percent of government revenues excluding grants. - Challenges: limited capacity to assess and prioritize projects, complex processes to access climate funds, diverted resources due to the COVID-19 pandemic. ### E. Benefits of adaptation (DIGNAD model simulations) - Model: Debt, Investment, Growth and Natural Disasters (DIGNAD) calibrated to Ugandan data; public capital distinguished as standard vs resilient/adaptation capital (adaptation capital has lower depreciation and may entail higher fiscal cost). - Investment envelope in experiments: 0.5 percent of GDP for 5 consecutive years. - Shock assumption illustrative: natural disaster triggers a decline in GDP of one percent. - Under no adaptation: - Fiscal gap of 2.7 percentage points of GDP would arise because of reconstruction needs and decreased tax revenues. - Building adaptation infrastructure results: - Can reduce by two thirds the GDP losses at the trough triggered by a disruptive disaster. - Can almost halve the resulting fiscal gap. - Financing alternatives examined: - (1) Investment in standard infrastructure. - (2) Investment in adaptation infrastructure financed by higher taxation. - (3) Investment in adaptation infrastructure financed by international grants. - Findings on financing: - Financing public investment with higher taxation leads to a sacrifice in terms of GDP during the ramp-up of the investment effort. - Grant-financing can reduce this cost, or eliminate it if grants cover the investment plan in full. - Post-disaster reconstruction in simulations is financed by increased taxation (no new debt issuance assumed), though donor post-disaster grants could be possible in reality. ### F. Policy implications and priorities - Scaling up adaptation and preparedness is essential to ensure resilience of the population and the economy to extreme weather events. - Priority actions include: - Expanding early warning and meteorological information systems. - Restoring forests and wetlands to reduce erosion and flood risk. - Investing in resilient water supply and irrigation systems to reduce reliance on rain-fed agriculture. - Strengthening enforcement of building codes, zoning regulations, and coordinated disaster response strategies. - Enhancing capacity to access international climate finance (grants and concessional financing) given domestic fiscal constraints. - Broader development policies (broad-based inclusive growth) that reduce poverty also enhance climate adaptation by increasing household capacity to cope with disasters. ### C. Conclusions — Economic dividends from adaptation for Uganda - Investing in climate adaptation would make Uganda more resilient to adverse weather events, resulting in: - fewer damages; - lower GDP losses; - lower post-disaster financing needs; - fewer losses of lives. - Adaptation investments cited include more efficient irrigation systems and resilient infrastructure, which pose significant financial challenges in the presence of limited fiscal space and therefore require donor support. - Simulations show that, for donors, it may be cost-effective to help finance investment in adaptation because it would reduce post-disaster disbursements. - If donors financed a fixed fraction of the fiscal gap arising from natural disasters, post-disaster disbursements could be halved in the presence of adaptation. ### Fiscal dynamics and donor role - The large fiscal gap arising in the aftermath of a disaster underscores a problem authorities may face increasingly often with worsening climate conditions. - Very likely, donors might have to financially support the country in these circumstances, covering at least a fraction of the fiscal gap. - It may be more cost-effective for donors to help finance investment in adaptation, given the larger post-disaster disbursements that would be required to finance the larger fiscal gaps arising in the absence of adaptation. - Note: An alternative assumption could be that the fiscal gap is financed by new government debt, which may deliver relatively more favorable GDP dynamics, thanks to a smaller crowding-out of private investment, if debt is issued externally. ### Urgent policy actions (in line with authorities’ NDPIII) - developing flood risk zoning, upgrading and enforcing development restrictions, as well as standards for construction and maintenance, which would improve the country’s resilience to floods; - revamping government support to reforestation programs, which would also enhance soil resilience to floods, while contributing to emission reduction through carbon sequestration; - improving water mapping and monitoring, and water conservation measures (e.g., price differentiation and groundwater protection, among others), which would increase resilience to droughts; - scaling up capacity to access donor funds that are critical to meet ambitious adaptation plans. ### Opportunity from forthcoming oil extraction - Forthcoming oil extraction represents an opportunity to leverage associated revenues to finance Uganda’s low-carbon development plans, including investing in renewable energy generation that will reduce the use of coal and wood, and thus benefit reforestation. - Reducing poverty is part of climate adaptation, as a wealthier population has larger capacity and resources to protect property and human lives. *IMF staff analysis (excerpt from UGANDA country report).* ### 1. Top Floods and Droughts by Number of People Affected (2000-2021) _________________ 4 ### 1. Top Floods and Droughts by Number of People Affected (2000-2021) ### A. Context and exposure - Uganda is prone to floods and droughts; floods accounted for 55 percent of natural disasters in 1985-2021. - Droughts represented 7 percent of total natural disasters in the past four decades but have affected the largest number of people. - Agriculture absorbs about 70 percent of the working population, increasing vulnerability to weather shocks. - Uganda’s contribution to world's total greenhouse gas emissions is estimated at 0.099% (Ministry of Water and Environment, 2015a). ### B. Historical impacts on people and GDP - Between 2002 and 2010, droughts impacted over 3 million Ugandans. - The severe 2016/17 drought impacted more than 1 million people in Uganda. - The 2016/17 drought was a main reason for a significant growth slowdown; by 2019 Uganda’s level of real GDP was 3½ percent lower than in a counterfactual without the 2016/17 drought. - Cross-country sub-Saharan Africa estimates: real GDP growth loss averages 0.3 percentage points for droughts and 0.4 percentage points for floods in the year of the disaster occurrence (IMF, 2020). - Disruptive disasters are defined as those events with fatalities plus 0.3 times the affected persons exceeding 0.01 percent of the population. ### C. Climate trends and projections - Since the 1930s average temperature in Uganda has increased by 1.7°C. - Observed rainfall: March–May has witnessed an average decrease of 6.0 mm per month, per decade since the 1960s. - IPCC (2014) projections: maximum temperatures will rise between 1°C and 2.2°C by 2050; minimum temperatures will rise between 0.8°C and 2.5°C by 2050, depending on global emission scenarios. - Warm Spell Duration Index is expected to increase by 20-50 days. - Climate-induced losses in agriculture, water, infrastructure and energy sectors could collectively amount to US$273-437 billion (2.8-4.5% of cumulative prospected GDP) between 2010 and 2050. - Major export crop losses: combined economic losses of about US$1.4 billion by mid-century; climate-induced losses from reduction of Arabica coffee yields expected to range 10–50%, potentially reducing foreign exchange earnings by $15–$80 million per year. ### D. Adaptation needs and constraints - Uganda loses more than 800 km2 of its wetlands every year. - Forest coverage goal: increase from 14% to 21% by 2030, but restoration has not kept pace with annual loss. - Total climate adaptation budget estimated at US$120 million per year for 2021-2030 (Ministry of Water and Environment, 2015b), equivalent to 0.3 percent of GDP or 2.1 percent of government revenues excluding grants. - Challenges: limited capacity to assess and prioritize projects, complex processes to access climate funds, diverted resources due to the COVID-19 pandemic. ### E. Benefits of adaptation (DIGNAD model simulations) - Model: Debt, Investment, Growth and Natural Disasters (DIGNAD) calibrated to Ugandan data; public capital distinguished as standard vs resilient/adaptation capital (adaptation capital has lower depreciation and may entail higher fiscal cost). - Investment envelope in experiments: 0.5 percent of GDP for 5 consecutive years. - Shock assumption illustrative: natural disaster triggers a decline in GDP of one percent. - Under no adaptation: - Fiscal gap of 2.7 percentage points of GDP would arise because of reconstruction needs and decreased tax revenues. - Building adaptation infrastructure results: - Can reduce by two thirds the GDP losses at the trough triggered by a disruptive disaster. - Can almost halve the resulting fiscal gap. - Financing alternatives examined: - (1) Investment in standard infrastructure. - (2) Investment in adaptation infrastructure financed by higher taxation. - (3) Investment in adaptation infrastructure financed by international grants. - Findings on financing: - Financing public investment with higher taxation leads to a sacrifice in terms of GDP during the ramp-up of the investment effort. - Grant-financing can reduce this cost, or eliminate it if grants cover the investment plan in full. - Post-disaster reconstruction in simulations is financed by increased taxation (no new debt issuance assumed), though donor post-disaster grants could be possible in reality. ### F. Policy implications and priorities - Scaling up adaptation and preparedness is essential to ensure resilience of the population and the economy to extreme weather events. - Priority actions include: - Expanding early warning and meteorological information systems. - Restoring forests and wetlands to reduce erosion and flood risk. - Investing in resilient water supply and irrigation systems to reduce reliance on rain-fed agriculture. - Strengthening enforcement of building codes, zoning regulations, and coordinated disaster response strategies. - Enhancing capacity to access international climate finance (grants and concessional financing) given domestic fiscal constraints. - Broader development policies (broad-based inclusive growth) that reduce poverty also enhance climate adaptation by increasing household capacity to cope with disasters. *Source: 1ugaea2022002 - 1. Top Floods and Droughts by Number of People Affected (2000-2021).* ### 13. For donors it may be cost-effective to help finance investment in adaptation because it ### 13. For donors it may be cost-effective to help finance investment in adaptation because it ### C. Conclusions — Economic dividends from adaptation for Uganda - Investing in climate adaptation would make Uganda more resilient to adverse weather events, resulting in: - fewer damages; - lower GDP losses; - lower post-disaster financing needs; - fewer losses of lives. - Adaptation investments cited include more efficient irrigation systems and resilient infrastructure, which pose significant financial challenges in the presence of limited fiscal space and therefore require donor support. - Simulations show that, for donors, it may be cost-effective to help finance investment in adaptation because it would reduce post-disaster disbursements. - If donors financed a fixed fraction of the fiscal gap arising from natural disasters, post-disaster disbursements could be halved in the presence of adaptation. ### Fiscal dynamics and donor role - The large fiscal gap arising in the aftermath of a disaster underscores a problem authorities may face increasingly often with worsening climate conditions. - Very likely, donors might have to financially support the country in these circumstances, covering at least a fraction of the fiscal gap. - It may be more cost-effective for donors to help finance investment in adaptation, given the larger post-disaster disbursements that would be required to finance the larger fiscal gaps arising in the absence of adaptation. - Note: An alternative assumption could be that the fiscal gap is financed by new government debt, which may deliver relatively more favorable GDP dynamics, thanks to a smaller crowding-out of private investment, if debt is issued externally. ### Urgent policy actions (in line with authorities’ NDPIII) - developing flood risk zoning, upgrading and enforcing development restrictions, as well as standards for construction and maintenance, which would improve the country’s resilience to floods; - revamping government support to reforestation programs, which would also enhance soil resilience to floods, while contributing to emission reduction through carbon sequestration; - improving water mapping and monitoring, and water conservation measures (e.g., price differentiation and groundwater protection, among others), which would increase resilience to droughts; - scaling up capacity to access donor funds that are critical to meet ambitious adaptation plans. ### Opportunity from forthcoming oil extraction - Forthcoming oil extraction represents an opportunity to leverage associated revenues to finance Uganda’s low-carbon development plans, including investing in renewable energy generation that will reduce the use of coal and wood, and thus benefit reforestation. - Reducing poverty is part of climate adaptation, as a wealthier population has larger capacity and resources to protect property and human lives. *IMF staff analysis (excerpt from UGANDA country report).* --- _Source: https://www.imf.org/-/media/files/publications/cr/2022/english/1ugaea2022002.pdf_