By John Kusolo**
Kampala, Uganda – September 3, 2024: The Ministry of Finance, Planning and Economic Development, in collaboration with the International Growth Centre (IGC), successfully hosted the 8th High-Level Economic Growth Forum at the Serena Hotel in Kampala from August 29th to 30th, 2024. Themed “Seizing Opportunities for Structural Transformation to Increase Productivity and Resilience,” the forum brought together senior government officials, development partners, academia, civil society, and the private sector to chart a course for Uganda’s economic future amidst global uncertainties.
The discussions at the forum were heavily centered around Uganda’s ambitious ten-fold growth strategy, which aims to address structural challenges and leverage emerging opportunities for sustained economic growth. Participants examined how Uganda can navigate the complexities of reduced capital flows, rising global interest rates, protectionism, geopolitical tensions, and climate change to achieve long-term growth.
*Key Strategic Areas Discussed*
*Growth Strategy for Structural Transformation* : The forum highlighted the importance of a comprehensive growth strategy that targets structural transformation, focusing on key sectors that can drive economic growth and resilience.
Industrial Policy: The discussion emphasized promoting agro-industry, manufacturing, mining, and exports as critical areas for Uganda's industrial development. These sectors are seen as vital to achieving the country’s economic diversification and value addition goals.
*Climate Change:* A significant part of the dialogue revolved around turning the challenges posed by climate change into opportunities for growth. Participants agreed on the need for robust climate adaptation strategies to ensure economic sustainability.
*Overcoming Financing Constraints* : Both public and private savings were identified as crucial to overcoming Uganda's financing constraints. The forum underscored the importance of enhancing financial access and mobilizing domestic resources.
*Urbanization:* Transforming subsistence farming into urban growth was recognized as a key element in driving economic expansion. Urbanization strategies will focus on harnessing the potential of cities as engines of growth.
*High Productivity Services* : The development of high-productivity services, particularly in tourism and business services, was discussed as a pathway to achieving higher economic output and creating jobs.
*Government’s Commitment to Inclusive Growth*
Representing Finance Minister Matia Kasaija, Minister of State for General Duties, Henry Musasizi, reiterated the Ugandan government’s commitment to driving inclusive growth. He emphasized the role of government programs such as the Parish Development Model (PDM) in ensuring that all regions and sectors of Uganda benefit from economic development. The focus, he noted, should be on sectors where Uganda holds a comparative advantage, such as agro-processing, mineral development, and tourism.
*Economic Resilience Amidst Global Challenges*
Permanent Secretary and Secretary to the Treasury (PSST) Ramathan Ggoobi lauded Uganda’s economic resilience despite global financial challenges and supply chain disruptions. He highlighted the impressive 6.0% growth rate achieved in FY 2023/24, which surpasses both the Sub-Saharan Africa average of 3.8% and the global average of 3.2%. This strong growth, Ggoobi noted, is a testament to Uganda’s investment in infrastructure development, human capital, and deliberate government programs aimed at agricultural and agro-industrialization.
*Strategic Growth Plans for 2040*
Looking ahead, Ggoobi outlined the Finance Ministry’s ambitious strategy to grow Uganda’s economy from USD 50 billion to USD 500 billion by 2040. *This strategy targets four key sectors:* agro-industrialization, tourism, mineral development (including oil and gas), and science, technology, and innovation (STI). The plan aims to double GDP every five years, raise per capita GDP from USD 1,146 to USD 7,000 by FY 2039/40, and increase savings from 20% to 40% of GDP by 2040. Additionally, Uganda plans to raise the share of exports in GDP from 12% to 50% and boost annual Foreign Direct Investment (FDI) inflows from USD 2.9 billion in 2022 to USD 50 billion by 2040.
*Importance of Exports and Trade*
IGC Country Director, Richard Newfarmer, emphasized the critical role of exports and trade in driving productivity growth. He noted that Uganda’s exports would need to grow by double digits annually to meet these aspirational goals. Success in this area, he added, will depend on the performance of the global economy and Uganda’s policies.
*Forum Recommendations*
The forum concluded with several key recommendations:
*Specialized Wage Work:* Greater attention should be given to specialized wage work, moving away from subsistence production, and creating an enabling environment for small-scale producers.
*Parish Development Model:* The model should be leveraged to deepen credit extension to unbanked individuals, especially in the agricultural sector where the majority are employed.
*Investing in Skills Development* : Uganda’s growing youth population offers an opportunity to harness the demographic dividend by continuing investments in education, health, and skills development.
*Building Productive Capacity:* Efforts should focus on building productive capacity to take advantage of the single market for the African continent.
Enhancing Digital Infrastructure: Investments in fields such as ICT should be targeted to improve digital infrastructure and expand broadband access.
*Tourism Development:* Enhancing Uganda’s brand as a tourist destination through online presence, ICT, and marketing at national, regional, and international levels.
*Climate Finance* : Establishing and fast-tracking policy measures to attract climate finance, including carbon financing, debt-for-nature and climate swaps, climate risk insurance, green bonds, and SDG bonds.
*Public Investment Productivity* : There is a need to enhance and boost the productivity of public investment through effective implementation of reforms to the Public Investment Management System (PIMS).
The forum’s outcomes are expected to feed into the national budget strategy for FY 2025/26, providing a roadmap for Uganda’s economic transformation in the years ahead. As Uganda continues to navigate the complexities of the global economic landscape, the ten-fold growth strategy will be central to achieving inclusive and sustainable long-term growth.
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