The World Bank Uganda: Roads and Bridges in the Refugee Hosting Districts Project (P171339) Public Disclosure Authorized Public Disclosure Authorized Project Information Document (PID) Concept Stage | Date Prepared/Updated: 25-Sep-2019 | Report No: PIDC27608 Public Disclosure Authorized Public Disclosure Authorized Aug 15, 2019 Page 1 of 11 The World Bank Uganda: Roads and Bridges in the Refugee Hosting Districts Project (P171339) BASIC INFORMATION A. Basic Project Data OPS TABLE Country Project ID Parent Project ID (if any) Project Name Uganda P171339 Uganda: Roads and Bridges in the Refugee Hosting Districts Project (P171339) Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) AFRICA Apr 20, 2020 Jun 23, 2020 Transport Financing Instrument Borrower(s) Implementing Agency Investment Project Financing Ministry of Finance, Planning Uganda National Roads and Economic Development, Authority Government of Uganda Proposed Development Objective(s) The Project Development Objective is to enhance transport connectivity to improve supply of goods and access to social services in the refugee hosting districts of Uganda and capacity enhancement of Uganda National Roads Authority. PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 130.00 Total Financing 130.00 of which IBRD/IDA 120.00 Financing Gap 0.00 DETAILS-NewFinEnh1 World Bank Group Financing International Development Association (IDA) 120.00 IDA Grant 120.00 Non-World Bank Group Financing Counterpart Funding 10.00 Aug 15, 2019 Page 2 of 11 The World Bank Uganda: Roads and Bridges in the Refugee Hosting Districts Project (P171339) Borrower/Recipient 10.00 Environmental and Social Risk Classification Concept Review Decision High Track II-The review did authorize the preparation to continue Other Decision (as needed) B. Introduction and Context Country Context 1. The Ugandan economy is rapidly growing but not at the target levels envisaged under the National Development Plans (NDP) in line with Uganda’s Vision 2040. During the NDP I period (2010/11 – 2014/15), the economy grew at an average rate of 5.5 percent, which was below the target of 7.2 percent. For the NDP II period (2015/16 – 2019/20), as against the targeted annual growth rate of 6.3 percent, the economy has been growing at an average rate of 4.7 percent for the last five years. Uganda’s economy is made up of the Agriculture1 24.2 percent; Industry2 25.5 percent; and Services3 50.3 percent sectors4. 2. Uganda’s population is fast-growing, predominantly young and rural, with prevailing social and economic inequalities. Driven by a high fertility rate at 5.5 births per woman, Uganda’s population has doubled to 42.86 million over the last three decades and continues to grow by more than 3 percent per annum.5 This has negatively impacted the economic outcomes - in per capita terms, growth almost halved to about 1.7 percent in the past five years. The country’s population is largely young with more than 47 percent under the age of 156 and nearly 80 percent under the age of 30.7 The majority of Ugandans – 77 percent of the total population – live in rural areas and work in the agricultural sector, which accounts for 71 percent of total employment and around a quarter of the country’s Gross Domestic Product (GDP).8 3. With Uganda’s impressive growth slowing, a large percentage of households remain vulnerable to falling back into poverty. Between 1992 and 2005, the national poverty rate declined at an average pace of close to 2 percentage points per year, one of the fastest declines in Sub-Saharan Africa and the world. Poverty reduction continued until 2012, aided by peace in northern Uganda, more integrated regional economic markets, and 1 includes Fisheries, Animal Husbandry, Dairy, and Crop sub-sectors 2 includes Manufacturing, Construction, and Electricity Supply sub-sectors 3 Includes Wholesale and Retail trade, Telecommunications, Hotels and Restaurants, Transport and Communications and Tourism sub sectors 4 https://www.gou.go.ug/about-uganda/sector/economy 5 World Bank World Development Indicators (2017). 6 World Bank World Development Indicators (2017). 7 Diagnostic study n°5.1 to 5.3 to support the mid-term review of Uganda’s 2nd National Development Plan (NDP-2) and evaluation of NDP-1 in Uganda, March 2019. State of Uganda Population Report 2018. 8 World Bank World Development Indicators (2017). Aug 15, 2019 Page 3 of 11 The World Bank Uganda: Roads and Bridges in the Refugee Hosting Districts Project (P171339) favorable weather conditions. Since 2012, slower growth, especially in agriculture led to an increase in the poverty rate by about 1.7 percentage points to 21.4 percent in 2016/17. Exogenous shocks, such as weather, raise this vulnerability. 4. Due to its generous refugee policies, Uganda hosts Africa’s largest refugee population and by the end of the year 2018, there were 1,370,922 refugees and asylum-seekers in Uganda out of which 70% were from South Sudan9. About 90% of South Sudan refugees are registered in the West Nile Sub-Region in Northern Uganda10. Their number increased very rapidly in 2016 – 2017 triggered by an armed conflict occurred in Juba, the capital of South Sudan, in July 2016. Women and children constituted 84 percent of the refugee population11. Most of the countries in the Great Lakes region have fallen prey over the last two decades, to the political instability, lengthy wars and recurring conflicts. This has resulted in numerous displacements of the populations and the destruction of social, economic and industrial infrastructure. For several decades, Uganda has been generously hosting refugees and asylum seekers from 13 countries, many conflict-affected, in its neighborhood, including the Democratic Republic of Congo (DRC), Somalia, South Sudan, Rwanda, Eritrea and Burundi. Many refugees, especially in the northern districts, are in protracted displacement. The increased refugee inflows also put enormous pressure on factors of production such as land and essential services such as water, sanitation, health, and education creating additional burdens on social infrastructures which are not enough even for the local Ugandan population. Many refugees and hosts have limited access to productive and decent employment, income-generating opportunities and lack human capital. Many are not engaged in any specific economic activity and levels of income are very low with 53.3% of refugee households earning less that UGX 500,00012 annually. Social impacts are circumscribed by the underlying poverty and vulnerabilities exacerbated by weak basic social services delivery, poor infrastructure, and limited market opportunities in the refugee hosting settlement areas that impacts refugees and host communities alike.13 5. There is significant inequality between regions and the sustained conflict in the north held the region back by several years, resulting in slower rise in incomes and high poverty levels. The sustained conflict in the north inclusive of the West Nile region, which put the region back by several years, could also have contributed to increased inequality and a slower rise in the incomes of the poor. The proportion of the poor living in Northern Uganda increased from 60 percent to 84 percent, between 2006 and 2013. By FY17/18, per capita income for the northern region had been estimated at around $21014, less than a third of the national per capita levels of $ 799, while the poverty level was 33 percent15. Sectoral and Institutional Context 6. Transport sector contributes to about 3 percent of country’s GDP and road transport is the dominant mode of transport carrying about 95 percent of freight traffic and 99 percent of passenger traffic but only 3.3 percent of the road network is paved and has few redundancies16. Uganda’s road network of 151,000 kilometers consists of primary network of 20,856 km of National Roads and a secondary network of about 130,000 km of District, 9 UNHCR, Uganda Refugee Response – Monthly Snapshot, March 2018. 10 OPM, Refugee Information Management System (RIMS), 8 February 2018. 11 http://reporting.unhcr.org/uganda 12 One US$ is equivalent to UGX 3,600 approximately 13 https://www.worldbank.org/en/topic/fragilityconflictviolence/brief/ugandas-progressive-approach-refugee-management 14 USAID, Estimating District GDP in Uganda, Nov 2017 15 Poverty Maps of Uganda, Uganda Bureau of Statistics 16 Redundancies are alternate routes Aug 15, 2019 Page 4 of 11 The World Bank Uganda: Roads and Bridges in the Refugee Hosting Districts Project (P171339) Urban, Community and Access Roads. 52 percent of the network are gravel-surfaced roads, which do not provide all-weather connectivity and are difficult to maintain, and 45 percent of the network are earthen roads. Only about 100-400 km of gravel surfaced National Roads are being upgraded every year to bituminous paved roads. Some of the National Roads do not have bridges to cross various rivers and streams across the length and breadth of the country and traffic movement on these highways is dependent on the ferry crossings which act as ‘bridges’ across the water bodies with no redundancies. 7. The traffic volume on the network has been growing at a rate of about 6 percent per year. 80 percent of the total traffic is carried by the National Roads, which constitute only 13.8 percent of the total road network. In the year 2010, the National Roads network increased by about 10,000 km to become 20,856 km and has remained the same since then. 8. The gravel roads that provide critical connectivity to the areas in the refugee hosting districts are unable cope with the growing traffic. The northern region, which is hosting a maximum number of refugees, has the second lowest density of bituminous paved roads in the country. Refugees from the countries of South Sudan and DRC constitute 91.6 percent of the refugees in Uganda and these are mostly concentrated in the West Nile area owing to its proximity to the Uganda’s border with South Sudan and DRC in the northern region.