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Increased investment in energy

could grow Uganda’s economy:

IFC, World Bank

UGANDA UGANDA could grow its economy and “The COVID-19 pandemic has exacerbated
strengthen the country’s trade position in East the country’s development challenges. An esti-
Africa region by increasing private sector invest- mated 2.6 mn Ugandans will fall back into pov-
ment in various sectors. erty in the short term because of the crisis,” said
A new report says Uganda can grow its econ- CPSD.
omy, create jobs and strengthen trade position by The economy contracted by 2.1 % in 2020
increasing private sector investment in agribusi- and its fiscal deficit surged to 7.6 %, signifi-
ness, energy and housing sectors while advanc- cantly reducing the room for growth-enhancing
ing business climate reforms. expenditures in the years ahead.
Country Private Sector Diagnostic (CPSD) CPSD found energy, housing, and agribusi-
jointly produced by International Finance Cor- ness (namely fisheries, dairy, and maize) sectors
poration (IFC) and the World Bank, applauds are among those offering strong potential to
Uganda for liberalising parts of the economy, address job creation and competitiveness chal-
also examines where increased private sector lenges amid high population growth and urban-
investment, expertise and reform could further ization. To realise growth, Uganda will need to
support growth. continue advancing reforms and attracting pri-
“Uganda has a track record of pro-business vate investment.
and market-enabling policies, having helped to “IFC’s goal is to help strengthen Uganda’s
spur growth rates averaging six to seven % since competitiveness, economy, and job creation by
the 1990s,” said CPSD. supporting increased private sector investment
This period of growth began with an aggres- in key growth areas,” said IFC Country Manager
sive privatisation program in the 1990s, which for Uganda Amena Arif.
reduced the number of state-owned enterprises Other challenges slowing growth in Uganda
(SOEs) in Uganda’s economy to one of smallest relate to infrastructure, human capital, institu-
portfolios in the region. It resulted in private tional capacity, and the land system. The CPSD
markets relatively unencumbered from distort- found the constraints limit private sector invest-
ing state competition. ment, especially in housing.
Uganda has leveraged intraregional trade Housing construction is important for
to its advantage. In recent years, Uganda has post-COVID-19 economic and social recovery
been exporting more in terms of gross domestic because of ability to create jobs. Availability of
product (19.5 % in 2018) than the average East reliable electricity from production and distribu-
African country. Uganda also exports a more tion perspective, will contribute to competitive-
diversified basket of products than many other ness. It presents investment opportunities for the
low-income countries. private sector in renewable energy.
Uganda is a member state of the East Afri- “A competitive and dynamic private sector is
can Community (EAC) bloc. Other partners essential for Uganda to create sufficient jobs for
are Burundi, Kenya, Rwanda, South Sudan and a young and rapidly growing labor force. We will
Tanzania leverage the World Bank Group’s comparative
But since 2015, Uganda’s growth model advantage to bolster the country’s private sector
started to show signs of weakness, with growth and implement meaningful reforms,” said World
rates decelerating even before the outbreak of the Bank Country Manager for Uganda Mukami
corona virus (COVID-19) pandemic. Kariuki.™

Week 10 10•March•2022 www. NEWSBASE .com P7