{
  "title": "Uganda's Infrastructure Investment Promise",
  "publication": "IMF News, July 19, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/07/18/na071817-ugandas-infrastructure-investment-promise",
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  "summary": "Drought, slow credit growth, and indirect effects of regional conflict are taking their toll, but infrastructure and oil sector investment could boost growth over the next 3–5 years, said the IMF in its annual assessment of the Ugandan economy.",
  "publishDate": "2017-07-19",
  "sections": [
    {
      "heading": "Economic slowdown and near-term outlook",
      "content": "- Growth averaged 8 percent per year for two decades prior to recent slowdown.\n- IMF estimates growth at 3.9 percent for the 2016/17 fiscal year that ended in June.\n- IMF projects growth at 5 percent for the fiscal year that started in July.\n- Population growth is around 3 percent, implying per capita growth of only ½ percent.\n- Identified factors weighing on growth:\n  - Drought in the Horn of Africa.\n  - Slowdown of credit to the private sector.\n  - Indirect effects from regional conflict, such as reduced trade flows.\n- Social spending is set to decline as a share of GDP and is below average for the region."
    },
    {
      "heading": "Infrastructure and oil sector as growth drivers (3–5 year horizon)",
      "content": "- Infrastructure and oil sector investment could boost growth over the next 3–5 years.\n- Government development strategy focuses on:\n  - Building hydropower plants.\n  - Developing a modern road network.\n  - Constructing railways.\n  - Developing oil fields in partnership with an international consortium of oil companies.\n  - Transporting crude oil to international markets via a pipeline through Tanzania.\n  - Supplying a planned domestic refinery."
    },
    {
      "heading": "Human capital, social spending, and inclusiveness",
      "content": "- The report stresses attention to social spending on health and education to ensure broad-based benefits from infrastructure and regional integration.\n- Example concern: primary school completion rates have recently declined and are lower than those of peers."
    },
    {
      "heading": "Regional integration and business environment",
      "content": "- Ongoing economic integration in the East African Community provides opportunities for access to larger markets and better linkages.\n- Prerequisites for benefiting from integration:\n  - Good infrastructure.\n  - A skilled workforce.\n  - An enabling business environment.\n- Uganda’s business environment has improved over the last decade but lags other East African Community countries where more progress has been made."
    },
    {
      "heading": "Fiscal implications, public debt, and revenue policy",
      "content": "- Infrastructure investment is mostly financed through borrowing from abroad; public debt is on the rise.\n- Investment must yield a return in the form of higher growth to reverse the rising debt trend.\n- Government planning and execution of investment projects need improvement to ensure returns.\n- Uganda’s revenue collection is low relative to peers in the East African Community.\n- The report emphasizes continuing the strategy to increase tax revenues by ½ percent of GDP per year.\n- Over the medium term, the report projects that:\n  - Higher growth, increased tax collection, and completion of the infrastructure program will make the overall fiscal deficit converge to its 3 percent of GDP target.\n  - Convergence to the 3 percent of GDP target will ensure that public debt declines again."
    },
    {
      "heading": "Key statistics (as presented in the report)",
      "content": "- Population: 37 million\n- Capital: Kampala\n- Currency: Ugandan Shilling\n- Life Expectancy: 59 years\n- Adult literacy rate:74%\n- GDP per capita:US$690\n- Poverty ratio:35%\n\nSource: Uganda's Infrastructure Investment Promise (IMF Country Focus, July 19, 2017).\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Country Focus\n- Read the report\n- Listen to the podcast\n- Regional economic outlook\n- Uganda and the IMF\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/07/18/na071817-ugandas-infrastructure-investment-promise"
    }
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    "Published: July 19, 2017",
    "Growth averaged 8 percent per year for two decades prior to recent slowdown.",
    "IMF estimates growth at 3.9 percent for the 2016/17 fiscal year that ended in June.",
    "IMF projects growth at 5 percent for the fiscal year that started in July.",
    "Population growth is around 3 percent, implying per capita growth of only ½ percent.",
    "Identified factors weighing on growth:",
    "Social spending is set to decline as a share of GDP and is below average for the region.",
    "Infrastructure and oil sector investment could boost growth over the next 3–5 years.",
    "Government development strategy focuses on:",
    "The report stresses attention to social spending on health and education to ensure broad-based benefits from infrastructure and regional integration.",
    "Example concern: primary school completion rates have recently declined and are lower than those of peers.",
    "Ongoing economic integration in the East African Community provides opportunities for access to larger markets and better linkages.",
    "Prerequisites for benefiting from integration:",
    "Uganda’s business environment has improved over the last decade but lags other East African Community countries where more progress has been made.",
    "Infrastructure investment is mostly financed through borrowing from abroad; public debt is on the rise.",
    "Investment must yield a return in the form of higher growth to reverse the rising debt trend.",
    "Government planning and execution of investment projects need improvement to ensure returns.",
    "Uganda’s revenue collection is low relative to peers in the East African Community.",
    "The report emphasizes continuing the strategy to increase tax revenues by ½ percent of GDP per year.",
    "Over the medium term, the report projects that:",
    "Population: 37 million",
    "Capital: Kampala",
    "Currency: Ugandan Shilling",
    "Life Expectancy: 59 years",
    "Adult literacy rate:74%",
    "GDP per capita:US$690",
    "Poverty ratio:35%",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Country Focus](https://www.imf.org/en/news/country-focus)",
    "[Read the report](http://www.imf.org/en/publications/cr/issues/2017/07/12/uganda-2017-article-iv-consultation-and-eighth-review-under-the-policy-support-instrument-45069)",
    "[Listen to the podcast](http://www.imf.org/external/pubs/ft/survey/so/SinglePodcastHighlight.aspx?podcastid=454)",
    "[Regional economic outlook](http://www.imf.org/en/publications/reo/ssa/issues/2017/05/03/sreo0517)",
    "[Uganda and the IMF](http://www.imf.org/external/country/uga/index.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
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