Ugandan infrastructure management 'holding back growth'

9 June 2016

Uganda needs to improve its public investment management to ensure delivery of key infrastructure projects and reap the full returns for the economy, according to a report.

The World Bank’s latest Uganda Economic Update, a bi-annual assessment of the state of the country’s economy, recognised the major public investments Uganda is making to boost growth.

However, it said Uganda needed to improve its public infrastructure management capacity, including the ability to assess and deliver projects on time and within budget, to accelerate the benefits and increase returns from these investments.

Uganda’s capital investment has increased significantly in recent years. It rose from an average of 4.3% of GDP between 2002-03 and 2007-08, to 7.6% in the period 2008-09 to 2014-15, said the report.

Developments such as new hydropower dams on the River Nile and improved transport infrastructure are expected to accelerate economic growth and reduce poverty.

However, it said the planned investments have not fully materialised which, when combined with a weak economic environment and lower oil and commodity prices on the international markets, is resulting in slow growth of the economy.

The report recommended institutional strengthening to avoid duplicating projects and more rigorous appraisal of projects. It also suggested shared standards and guidelines for institutions and ministries, as well as ensuring a sound legal and regulatory framework to support public investment management.

Uganda’s economy is growing at 4.5-5% in the current financial year, which is lower than the 5.4% expected in the bank’s previous update. It is also lower than other East African countries, such as Rwanda and Tanzania, which are growing at 7%, and Kenya (6%).

“By managing public investments better, government would spur economic growth, improve welfare and give Uganda’s taxpayers more value for money,” said Christina Malmberg-Calvo, World Bank country manager for Uganda.

“It is therefore important to invest in the country’s ability to invest by transforming the public investment program into a system that better increases the value derived from public investments.” 

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