Industrialisation for Job Creation and Shared Prosperity

Introduction

The Budget for Fiscal Year 2017/18 is themed: “Industrialisation for Job Creation and Shared Prosperity” in line with that of the East African Community. This theme corresponds with that of the second National Development Plan (NDPII): “Strengthening Uganda’s Competitiveness for Sustainable Wealth Creation, Employment and Inclusive Growth”. It is also consistent with the theme of Africa’s Agenda 2063 which is about a prosperous Africa based on inclusive growth and sustainable development.

Fiscal Year 2017/18 is the third implementation year of NDP II and the second budget year of the current NRM Government. Key milestones have so far been achieved in implementation of NDP II core projects and complementary legal reforms. A number of NDP II core projects are on course for timely completion including Karuma and Isimba Hydro Power Projects which are due in FY 2017/2018. Implementation of all the 23 Presidential Guidelines and Directives issued in July 2016 has notably progressed.

Uganda’s mid-year population for FY 2016/17 is estimated at 36.9 million people. The 2016 Uganda Demographic and Health Survey (UDHS) shades new light on the quality of this population. Overall it confirms that there is continuity in the positive trend of Uganda’s development outcomes established by the results of the 2014 National Housing and Population Census. Significant progress has been registered in many demographic and health outcomes. The average number of children born by a Ugandan woman in her life time (fertility rate) declined from 6.2 in 2011 to 5.4 in 2016. Infant mortality also further declined from 54 to 43 deaths per 1,000 live births over the same period while under-five mortality reduced from 90 to 64 deaths per 1,000 live births. There has also been a sustained reduction in maternal deaths with the Maternal Mortality Ratio further declining from 438 deaths per 100,000 births in 2011 to 336 in 2016. This translates to just over 3 maternal deaths for every 1,000 births. These results add to the much needed evidence base for guiding a wide range of policies and investments in human development.

Uganda’s performance on socioeconomic development between 2013 and 2017 will be confirmed by the results of the on-going 2016/17 Uganda National Household Survey (UNHS) whose results are expected within 2017. These national survey datasets coupled with recent administrative data from sectors will go a long way in reinforcing performance measurement and management under the auspices of the National Standard Indicator framework and the newly adopted Programme Based Budgeting approach.

Uganda’s development efforts in FY 2017/18 will face challenges emanating from the continued uncertainty surrounding the recovery in global economic growth, weak commodity prices and geopolitical events in some of the key trading partners. Such developments could continue to have negative effects on the country’s export earnings, FDI flows and remittances.

In FY 2016/17, Government completed the Charter for Fiscal Responsibility, which provides a strategy for operating a fiscal policy that is consistent with sustainable fiscal balances over the medium term and the maintenance of prudent and sustainable levels of public debt. It specifies measurable fiscal objectives for the medium term. The Charter will be key in propelling the country to attain the East Africa Monetary Union (EAMU) convergence criteria in 2021.

At the regional level, the EAC has expanded to a six Partner State bloc following the admission of South Sudan. The Republic of South Sudan deposited the instrument of ratification on the Accession to the Treaty for the Establishment of the East African Community to the Secretary General of the East African Community (EAC) at the EAC Headquarters in Arusha, Tanzania. EAC Partner States produced the second EAC Common Market Scorecard in 2016 (CMS 2016). The scorecard indicated that the EAC is yet to fully implement the Common Market Protocol.

On the global scene, the Trade Facilitation Agreement (TFA) which was opened for ratification by WTO member countries in November 2014 entered into force in February 2017. The total number of ratifications reached 112 countries. These countries met the legal threshold of two-thirds of the WTO membership required for the TFA that was concluded under the Bali Ministerial Conference to come into force. It is estimated that full implementation of the TFA could reduce trade costs by an average of 14.3 percent and boost global trade by up to $1 trillion per year, and the biggest gains are expected in the poorest countries such as Uganda as they usually have a higher level of trade costs.

Other major global undertakings included agreements around climate and the environment. Parties to the United Nations Framework Convention on Climate Change, in the 12th Session of the Conference of the Parties, held in Marrakesh, Morocco discussed and agreed that the climate is warming at an alarming and unprecedented rate. The Parties called upon all stakeholders to tackle the issue with urgency so as to benefit and support the 2030 Agenda for Sustainable Development, and the associated Sustainable Development Goals (SDGs). Parties underscored the need to support efforts towards enhancing their adaptive capacity, strengthening resilience and reducing vulnerability. The Parties were also called upon to strengthen and support efforts towards eradicating poverty, ensure food security and to take stringent action in dealing with climate change challenges in agriculture.