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Enhanced Productivity for Job Creation BACKGROUND TO THE BUDGET Fiscal Year 2016/17 Ministry of Finance, Planning and Economic Development BACKGROUND TO THE BUDGET FISCAL YEAR 2016/17 ENHANCED PRODUCTIVITY FOR JOB CREATION JUNE 2016 Enhanced Productivity for Job Creation i BACKGROUND TO THE BUDGET Fiscal Year 2016/17 ii Enhanced Productivity for Job Creation BACKGROUND TO THE BUDGET Fiscal Year 2016/17 BACKGROUND TO THE BUDGET FISCAL YEAR 2016/17 Enhanced Productivity for Job Creation June 2016 Enhanced Productivity for Job Creation iii BACKGROUND TO THE BUDGET Fiscal Year 2016/17 TABLE OF CONTENTS List of Tables: .................................................................................................................... viii List of Figures:....................... .............................................................................................. x List of Acronyms and Abbreviations: .................................................................................. xi Chapter 1: INTRODUCTION ............................................................................................... 1 Chapter 2: GLOBAL AND REGIONAL DEVELOPMENTS AND PROSPECTS ........... 3 2.1 Global Economic Developments and Prospects .................................................................................. 3 2.1.1 Global Economic Growth ............................................................................................................. 3 2.1.2 World Commodity Prices and Inflation ........................................................................................ 4 2.1.3 International Trade ....................................................................................................................... 5 2.1.4 International Finance for Development ........................................................................................ 5 2.2 Regional Economic Developments and Prospects ............................................................................... 6 2.2.1 Sub Saharan Africa ....................................................................................................................... 6 2.2.2 The East African Community ........................................................................................................ 7 Chapter 3: DEVELOPMENT COOPERATION ................................................................. 9 3.0 Regional Cooperation .......................................................................................................................... 9 3.1 Trade and Investment ........................................................................................................................... 9 3.1.1 Customs Union ............................................................................................................................ 10 3.1.2 The EAC Common Market .......................................................................................................... 12 3.1.3 EAC Monetary Union.................................................................................................................. 14 3.2 Infrastructural Development and Competitiveness ............................................................................ 14 3.3 International Cooperation .................................................................................................................. 17 3.3.1 The Global 2030 Agenda for Sustainable Development ............................................................. 17 3.3.2 International Trade Agreements ................................................................................................. 19 Chapter 4: PERFORMANCE OF THE ECONOMY ......................................................... 23 4.1 Real Sector Developments ................................................................................................................. 23 4.1.1 Economic Growth Performance .................................................................................................. 23 4.2 Monetary and Financial Sector Developments .................................................................................. 26 iv Enhanced Productivity for Job Creation BACKGROUND TO THE BUDGET Fiscal Year 2016/17 4.2.1 Monetary Policy Framework ..................................................................................................... 26 4.2.2 Financial Sector Developments ................................................................................................. 32 4.3 Fiscal Sector Developments .............................................................................................................. 37 4.3.1 Overall Fiscal Performance in FY 2015/16 ............................................................................... 39 4.3.2 Performance of the Resource Envelope in FY 2015/16 ............................................................. 41 4.3.2 Financing Strategy ..................................................................................................................... 45 4.3.3 Public Debt Management ........................................................................................................... 49 4.3.4 Government Expenditure Performance...................................................................................... 52 4.4 External Sector Developments .......................................................................................................... 53 4.4.1 Overall Balance of Payments ..................................................................................................... 53 4.4.2 Current Account ......................................................................................................................... 55 4.4.3 Capital Account ......................................................................................................................... 58 4.4.4 Financial Account ...................................................................................................................... 58 Chapter 5: NATIONAL DEVELOPMENT ...................................................................... 59 5.1 National Development Outcomes ..................................................................................................... 59 5.1.1 Standards of Living .................................................................................................................. 59 5.1.2 Human Capital Development ..................................................................................................... 60 5.1.3 Jobs and Incomes ....................................................................................................................... 60 5.1.4 Public Administration and Service Delivery .............................................................................. 61 5.2 NDPII Core Projects: Implementation Progress ............................................................................... 62 5.3 Private Sector Development .............................................................................................................. 72 5.3.1 Private Sector Performance ....................................................................................................... 73 5.4 Business Environment and Competitiveness in Uganda ................................................................... 75 5.4.1 Private Sector Competitiveness ................................................................................................. 75 5.4.2 Private Sector Development Outlook ......................................................................................... 77 Enhanced Productivity for Job Creation v BACKGROUND TO THE BUDGET Fiscal Year 2016/17 Chapter 6: PUBLIC SERVICE DELIVERY: SECTOR PERFORMANCE AND PRIORITIES FOR FY 2016/17 AND THE MEDIUM-TERM ...................................... 79 6.0 Introduction ........................................................................................................................................ 79 6.1 Public Governance ............................................................................................................................. 79 Security ............................................................................................................................................... 80 Legislature .......................................................................................................................................... 80 Justice, Law and Order....................................................................................................................... 82 Public Administration ........................................................................................................................... 84 Public Sector Management ................................................................................................................. 84 Accountability ...................................................................................................................................... 86 6.2 Infrastructure Development .............................................................................................................. 88 Transport Sector ................................................................................................................................ 89 Energy Sector ..................................................................................................................................... 102 Information and Communication Technology ..................................................................................
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