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Uganda Country Strategy Paper 2017-2021

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Uganda Country Strategy Paper 2017-2021 AFRICAN DEVELOPMENT BANK GROUP UGANDA COUNTRY STRATEGY PAPER 2017-2021 RDGE/COUG June 2017 TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................................................. iii I. INTRODUCTION ............................................................................................................................. 1 II. THE COUNTRY CONTEXT ......................................................................................................... 1 2.1 Political Context ......................................................................................................................................... 1 2.2 Economic Context ...................................................................................................................................... 2 2.3 Social development and Cross-cutting Issues……………………………………………………………….. .............................................. 5 III. STRATEGIC OPTIONS, PORTFOLIO PERFORMANCE AND LESSONS ........................ 7 3.1 Country Strategic Framework .................................................................................................................. 7 3.2 Aid Coordination and Harmonization ...................................................................................................... 8 3.3 Country Challenges & Weaknesses and Opportunities and Strengths ................................................. 8 3.5 Key Findings of the CSP 2011-16 Country Portfolio Performance Review (CPPR) .......................... 11 3.6 Main Findings of the CSP 2011-2016 Completion Report .................................................................... 11 3.7 Lessons Learned from the CSP2011-2016 Completion Report and CPPR 2015/16 ........................... 12 IV. BANK GROUP STRATEGY 2017-21 ........................................................................................ 13 4.1 Rationale and Strategic Selectivity ......................................................................................................... 13 4.2 CSP Objectives and Strategic Pillars ...................................................................................................... 13 4.3 Bank Group Indicative Lending Program ............................................................................................. 17 4.4 Non-Lending Activities ............................................................................................................................ 17 4.5 Financing the CSP .................................................................................................................................... 18 4.6 CSP Monitoring and Evaluation ............................................................................................................. 18 4.7 Country Dialogue ..................................................................................................................................... 18 4.8 Risk and Mitigation Measures ................................................................................................................ 19 V. CONCLUSION AND RECOMMENDATIONS ......................................................................... 18 ANNEXES .............................................................................................................................................. I ANNEX1: INDICATIVE LENDING PROGRAM (2017-21) ........................................................................ I ANNEX 2: UGANDA ANALYTICAL WORK PROGRAM ...................................................................... II ANNEX 3 RESULTS-BASED FRAMEWORK FOR THE 2017-21 CSP PERIOD ................................ V ANNEX 4: LIST OF KEY STAKEHOLDERS MET DURING THE CSP PREPARATION MISSION ...................................................................................................................................... XI ANNEX 5: COUNTRY’S COMPARATIVE SOCIO-ECONOMIC INDICATORS ............................ XIV ANNEX 6: UGANDA- DEVELOPMENT PARTNER TECHNICAL WORKING GROUPS ............ XVI ANNEX 7: DONOR COORDINATION MATRIX FOR UGANDA .................................................... XVII ANNEX 8: BANK’S ONGOING PORTFOLIO IN UGANDA [As of 31 November 2016] ............... XVIII ANNEX 9: STATUS OF IMPLEMENTATION OF THE 2015 COUNTRY PORTFOLIO IMPROVEMENT PLAN (CPIP) ............................................................................................. XIX ANNEX 10: COUNTRY PORTFOLIO PERFORMANCE REVIEW ................................................ XXII ANNEX11: SUMMARY TABLE OF MDG INDICATORS ................................................................ XXIII ANNEX 12: UGANDA-CLIMATE RESILIENT AND GREEN DEVELOPMENT PROFILE ...... XXIV ANNEX 13: GOVERNANCE, BUSINESS ENVIRONMENT AND COMPETITIVENESS ............ XXVI ANNEX 14:CSP 2017-2021: ALIGNMENT TO UGANDA’S DEVELOPMENT PRIORITIES ..... XXIX ANNEX15: COUNTRY FIDUCIARY RISK ASSESSMENT-CFRA ................................................... XXX ANNEX16: DETAILED ECONOMIC AND SOCIAL CONTEXTS ANALYSIS……………… ................................................................................ …………...XLVIII ANNEX17: RATIONALE & SELECTIVITY CRITERIA FOR NEWCSP STRATEGIC PILLARS & PROGRAMS……………………………………………………………… ........ ………………………...LVII ANNEX18: CONTRIBUTION OF CSP PILLARS AND PROGRAMS TO THE HIGH-5s…… .…LVIII ANNEX 19: REFERENCES....................................................................................................................... LIX END NOTES .................................................................................................................................................. LX CURRENCY EQUIVALENTS UA 1.00 = USD 1.35 UA 1.00 = UGX 4,876.18 USD 1.00 = UGX 3,601.60 WEIGHTS AND MEASURES 1 metric tonne 2204 pounds (lbs) 1 kilogramme (kg) 2.200 lbs 1 metre (m) 3.28 feet (ft.) 1 millimetre (mm) 0.03937 inch (”) 1 kilometre (km) 0.62 mile 1 hectare (ha) 2.471 acres FISCAL YEAR July 1 – June 30 i ACRONYMS AND ABBREVIATIONS AfDB African Development Bank CN Concept Note COMESA Common Market for Eastern and Southern Africa CPIA Country Policy and Institutional Assessment CPPR Country Portfolio Performance Review CSO Civil Society Organizations CSP Country Strategy Paper DFID Department for International Development DP Development Partner DRC Democratic Republic of Congo DSA Debt Sustainability Analysis EAC East African Community EARC Eastern Regional Resource Centre FY Fiscal Year GDP Gross Domestic Product GoU Government of Uganda HDI Human Development Index HLAM High Level Government Management Reform Action Matrix HEST Higher Education, Science and Technology MDG Millennium Development Goal MDRI Multilateral Debt Relief Initiative MOFPED Ministry of Finance, Planning and Economic Development MTR Mid-Term Review NDP National Development Plan PICU Infrastructure, Cities and Urban Development PESD Power Systems Development RDRI Regional Integration Coordination Office BDEV Independent Development Evaluation PISD Private Sector Development AHAI Agriculture & Agro Industry ECGF Governance & Public Financial Management Coordination Office AHWS Water Development & Sanitation PEFA Public Expenditure and Financial Accountably PFM Public Financial Management PPP Public Private Partnership PRDP Peace, Recovery and Development Program for Northern Uganda PSFU Private Sector Foundation PSI Policy Support Instrument of the IMF RBF Results-Based Framework RMC Regional Member Countries RRC Regional Resource Centre SARC Southern Regional Resource Centre TICPI Transparency International’s Corruption Perceptions Index UGFO Uganda Field Office URA Uganda Revenue Authority ii EXECUTIVE SUMMARY 1. Uganda’s economic growth has recently slowed down from the high rates recorded in the immediate post-conflict period. The average annual real GDP growth rate fell from 6.7% during the 1987-2010 period to 5.7% over the 2011-16 period. In spite of this economic slowdown, the country has managed to reduce its poverty levels from 56.4% in 1993 to 19.7% in 2013i. However, the country still faces a number of development challenges. The main challenges are rising income inequalities across gender, age groups, and regions and various structural problems, including low levels of industrialization and declining total factor productivity. The main causes of these challenges are inadequate human capital and lack of quality infrastructure, particularly, in the priority agriculture, minerals, oil and gas, industrial manufacturing, and tertiary services sectors, and weak public institutional capacity. 2. Although the Government has recently increased its investment expenditure to develop the country’s infrastructure and human capital base, more investments are still required to unlock the country’s economic transformation potential. This transformation is vital for further reducing the country’s high poverty levels and promoting inclusive green growth through sustainable employment creation and business development for underserved youths, women and rural areas. The recently launched NDPII (2015/16-2019/20) aims to redress the country’s infrastructure and human capital deficiencies so as to contribute towards realizing the GoU Vision 2040 economic transformation agenda. 3. The new CSP 2017-21 aims to support the NDPII development agenda. Consultations with GoU and key stakeholders further re-affirmed the relevance and alignment of the Bank’s planned interventions with the GoU’s development objectives and priorities as stated in the NDP II. Building
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