Uganda s Implementation of the Istanbul Programme of Action. Mid-term Review Report

Transcription

1 Ministry of Finance Planning and Economic Development Uganda s Implementation of the Istanbul Programme of Action Mid-term Review Report Structural Transformation for Post-2015 Development Agenda

2 February 2016 UGANDA

3 UGANDA Foreword U ganda joined the rest of the Least Developed Countries (LDCs) to sign and ratify the Istanbul Programme of Action which was adopted by the Fourth United Nations (UN) Conference held between 9 th 13 th May 2011 in Istanbul, Turkey. This conference agreed to a resolution 65/280 that was later endorsed by the UN General Assembly on 17 th June The overall goal of the Istanbul Programme of Action (IPoA) is to overcome the structural challenges faced by LDCs in order to eradicate poverty, achieve internationally agreed development goals and enable eventual graduation from the LDC country category by Midway through the implementation of this Programme of Action, Uganda has already made significant progress in contributing to the attainment of this goal. The ratification of the IPoA came at a time when Uganda was transitioning from the Poverty Eradication Action Plan (PEAP) to a Comprehensive National Development Planning Framework that ushered in the Vision 2040 to be realized through the implementation of six National Development Plans (NDPs). The first NDP (2010/ /15) was launched prior to the ratification of the IPoA. Aware of this, the second NDP ( ) is being implemented to ensure alignment to this international dispensation. The Government of Uganda is grateful to the concerted efforts of our Development Partners, Private Sector, Civil Society, and all Ugandans for contributing to the successes already registered. Uganda has seen her population under the poverty line reduce from 24.5% in 2009/10 to 19.7% in 2012/13. During the same period, the poverty gap ratio shrunk from 6.8% to 5.2%. The proportion of Ugandans contributing to family workers total employment also rose from 74.4% to 78.9% over the same period. These improvements are at the backdrop of sustained real Gross Domestic Product (GDP) growth rate that has averaged 5.8% over the last 5 years. The implementation of the IPoA has also enabled Uganda to fast track the attainment of internationally agreed development goals notably the out-going Millennium Development Goals (MDGs ). This has enabled the country to assess its performance and ready herself to the successor Sustainable Development Goals (SDGs ). Uganda achieved six (6) of the MDG targets (under MDG 1, 6; and 8) namely: halving the proportion of the people below the poverty line, combating HIV/AIDS, malaria, and other diseases as well as developing a global partnership for development, respectively. I call upon all Ugandans and all our development partners to support the next phase of the implementation of this programme of action. Uganda still has structural challenges that the IPoA requires us to address mainly increasing our levels of productivity, reducing our trade imbalance through promotion of higher value exports and investing in our people s health and education to enable them maximize their human and economic potential. My special thanks go t0 the United Nations Development Program (UNDP) for facilitating this mid-term review process. Hon. Matia Kasaija Minister of Finance Planning and Economic Development i Implementation of The Istanbul Programme of Action

4 UGANDA Acronyms and Abbreviations AGOA AIDS BPoA CDP CICS COMESA DRC DSS EAC ECOSOC EMIS EVI EWS FAO FDI FY GDP GNI GoU HAI HIV HMIS IC IPoA LDCs MDGs MoES MoES MoFPED MoGLSD MW mwh N/A NDP ODA OHRLLS PEAP SAGE SDGs UBOS UDHS Africa Growth Opportunities Act Acquired Immune Deficiency Syndrome Brussels Programme of Action Committee for Development Policy Competitiveness and Investment Climate Strategy Common Market for East and Southern Africa The Democratic Republic of Congo Decision Support System East African Community Economic and Social Council of United Nations Education Management Information System Economic Vulnerability Index Early Warning System Food and Agriculture Organization Foreign Direct Investment Financial Year Gross Domestic Product Gross National Income Government of Uganda Human Assets Index Human Immunodeficiency Virus Health Management Information System Income Criterion Istanbul Programme of Action Least Developing Countries Millennium Development Goals Ministry of Education and Sports Ministry of Education and Sports Ministry of Finance Planning and Economic Development Ministry of Gender Labour and Social Development Megawatts Megawatts per Hour Not Applicable National Development Plan Official Development Assistance Office of the High Representative for Least Developing Countries and Small Island Developing States Poverty Eradication Action Plan Social Assistance Grants for Empowerment Sustainable Development Goals Uganda Bureau of Statistics Uganda Demographic Health Survey ii Implementation of The Istanbul Programme of Action

5 UGANDA UN UNDP UNICEF UPE USE United Nations United Nations Development Programme United Nations Children Emergency Fund Universal Primary Education Universal Secondary Education iii Implementation of The Istanbul Programme of Action

6 UGANDA Table of Contents Foreword... i Acronyms and Abbreviations... ii Chapter 1 Background to the Istanbul Programme of Action... 1 Chapter 2 Status of Uganda s Performance against the LDC Graduation Criteria... 3 Chapter 3 Alignment to National Planning Processes Chapter 4 Challenges and Opportunities for Uganda Chapter 5 Post 2015 Agenda: Uganda s Implementation Traction for Graduation by Annex 1: References... i i Implementation of The Istanbul Programme of Action

7 UGANDA Executive Summary In 2011, Uganda became a signatory to the Istanbul Programme of Action (IPoA) a commitment alongside 47 other Least Developed countries (LDCs) as well as the rest of the world with a purpose to overcome the structural challenges faced by the least developed countries in order to eradicate poverty, achieve internationally agreed development goals and enable graduation from the LDC category by Under IPoA, LDCs are expected to make progress in areas that are critical for structural transformation and improvement in their productive capacities in areas such as in science, technology and innovation, and investment promotion. LDCs are required to make strategic investments in human development and trade promotion with a keen focus on increasing agricultural production and value of exports. All these would require alignment of their national planning processes to the IPoA. It is the aspiration of this process that these investments would propel LDCs to achieve graduation out of the LDC category by This graduation follows three sets of criteria as below listed: i. Income criterion (IC), based on a three-year average estimate of GNI per capita for the period The threshold is $1,035 for inclusion and above $1,242 for graduation based on where countries are by the 2015 triennial review. ii. Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of population undernourished; (b) health: mortality rate for children aged five years or under; (c) education: the gross secondary school enrolment ratio; and (d) adult literacy rate. iii. Economic Vulnerability Index (EVI) based on indicators of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries; (e) share of population in low elevated coastal zones; (f) instability of exports; (g) victims of natural disasters; and (h) instability of agricultural production. Basing on Income criterion, Uganda will most unlikely double the current rate of GNI per capita to reach the $1,242 (which is an equivalent of GDP per capita of $1,033) the threshold for graduation. Uganda does not use the GNI per capita for assessment of its economic development trends but a close proxy GDP per capita currently stands at $686 (with lower estimates of $583 due to the 15.5% loss in the devaluation of the shilling against the US Dollar over the last year and half). On the second criterion, Uganda will over the medium term increase investment in social sectors to improve its human development index. This investment will further extend adult literacy (now at 74%), reduce malnutrition (with 33% of children stunted and 12% of women undernourished), reduce disparity between girl and boy child enrolment in primary and secondary education; and address mortality among children under-5 with a focus on malaria prevention and fighting anemia and pneumonia which are the leading causes of infant and child mortality. On the third criterion, Uganda has prioritized 12 key commodities to reduce over-dependence on coffee, tea and tobacco (whose prices have reduced globally) as traditional export earners. Besides, the ratio of manufactured exports as a proportion of total exports rose from 6% in 2012 to 8.5% in If sustained, this will improve the country s balance of payments position in order to score higher on the EVI criterion. Emphasis is needed on further value-addition and conclusion of the Doha round table trade negotiations. Finally, for Uganda to graduate out of the LDC category, more focus has to be put on human capital development in order to improve the quality of our population. The current structure of the population presents both a dividend in terms of labor and market but this can only be realized if Uganda has a productive population with skills needed on ii Implementation of The Istanbul Programme of Action

8 UGANDA the job market, more investments in increasing productivity through entrepreneurship development and boosting firm level capabilities. Table 1: Assessment of Uganda s Performance at mid-term of IPoA and Graduation Likelihood Criterion Indicators Performance Overall Likelihood of against the Three step Graduation by IPoA criteria 2020 using the thresholds or assessment traffic lights scores methodology Income criterion GNI Per capita (by 2014) $663 ($1,242) $663 compared to ($1,242 Not likely threshold) Human Assets Under 5 Mortality Rate (NPHC 80 (66) Index 2014) 53.6 Population Malnourished (%) 25.7 (65.5) Compared (FAO 2013) to 66 Gross Secondary School 26.9 (18.7) threshold Less Likely enrolment ration (EMIS, for LDCs 2013/14) Literacy Rate (MoES 2015) 74 (64.3) Economic Population (UBOS 2014 census) 34.9 (34.9) Vulnerability Remoteness (%) World Bank 67.6 (72) Index 2015 Merchandise export concentration (UN Fact sheet 0.2 (11.3) 2015) Share of Agriculture (MoFPED 27.5 (44.9) 31.8 Compared 2014/15) to 32.0 Population in coastal areas N/A threshold Likely Instability of exports of goods 14.6 (31.9) for LDCs and services (UN Fact Sheet 2015) Victims of natural disasters (UN 0.87 (67.9) Fact Sheet 2015) Instability of agricultural production (UN Fact Sheet 2015) 2.8 (7.2) OVERALL ASSESSMENT Less Likely to Graduate by 2020 As Uganda moves on with the implementation of the post 2015 agenda, focus will be on sustaining investments in energy and infrastructure, appropriate focus on social sectors, and more strategic investments in agriculture, tourism and mining (including oil and gas). Government is aware of the need to pay more attention to the challenges of ensuring a higher-than-current level of absorptive capacity and building systematic capabilities to innovate and implement with greater level of productivity both in the public and private sectors. The country is poised to achieve higher ratings under the IPoA due to the current budgetary planning earmarking resources to primary growth sectors as identified in the first NDP and on account of better alignment of NDP II with the IPoA. These include gradual increment in allocation to the health and education sectors. Lastly, the focus in increasing labor productivity will be vital to Uganda s economic growth. Further spending on skills formation, innovation and firm productivity is imperative in the medium term. iii Implementation of The Istanbul Programme of Action

9 Chapter 1 Background to the Istanbul Programme of Action 1 Mid-term Review of Implementation of the Istanbul Programme of Action

10 Chapter 1: Background to the Istanbul Programme of Action (IPoA) 1.1 Background to the Istanbul Programme of Action (IPoA) T he 2000 Millennium Declaration that ushered in the MDGs was a broad framework that stipulated roles of both developed and developing countries in fast tracking the achievement of targets under these goals. This would require national commitment and a Programme of Action against which countries would align their planning and budgetary processes. The Brussels Programme of Action ( ) was hence put in place basing on analytical work by the Office of the High Representative for Least Developing Countries and Small Island Developing States (OHRLLS) to achieve this purpose. The BPoA was a framework for partnership to ensure that countries met key seven (7) commitments: fostering a framework for peoplecentered policy; good governance; building human and institutional capabilities, ensuring that globalization works for LDCs by building productive capacities; enhancing the role of trade in development; reducing vulnerability and protecting the environment as well as mobilizing financial resources. After series of reviews of reports on the implementation of the BPoA in January 2010, OHRLLS under an Asia Pacific Review and an Africa Regional Review set up a process that culminated in the Istanbul Programme of Action IPoA ( ) which succeeded the BPoA. The IPoA builds on the BPoA but in addition has set up a three-tier graduation process where LDCs that met a defined criteria of performance would eventually graduate from the LDC status to medium income country status by It provides the needed pressure that is now exerted on LDCs to align their plans towards a path of structural transformation through meting key human and economic development targets. It also serves as a reward mechanism to good performing countries. 1.2 Overall Goal, Objectives and Principles of the IPoA The overall goal of the IPoA is to overcome the structural challenges faced by the least developed countries in order to eradicate poverty, achieve internationally agreed development goals and enable graduation from the LDC category by The specific objectives of the IPoA are tailored to support countries both developed and (at least half) of least developed to graduate from the LDC category by These objectives include the following: i. To achieve sustained, equitable and inclusive economic growth in least developed countries, to at least the level of 7 per cent per annum, by strengthening their productive capacity in all sectors through structural transformation and to overcoming their marginalization through their effective integration into the global economy, including through regional integration; ii. To build human capacities by fostering sustained, equitable and inclusive human and social development, gender equality and the empowerment of women; 1 Mid-term Review of Implementation of the Istanbul Programme of Action

11 iii. iv. To reduce the vulnerability to shocks of least developed countries to economic, natural and environmental shocks and disasters, as well as climate change, and enhance their ability to meet these and other challenges through strengthening their resilience; To ensure enhanced financial resources and their effective use for least developed countries development, including through domestic resource mobilization, ODA, external debt relief, foreign direct investment and remittances; and v. To enhance good governance at all levels, by strengthening democratic processes, institutions and the rule of law; increasing efficiency, coherence, transparency and participation; protecting and promoting human rights; and reducing corruption, and strengthen least developed country governments capacity to play an effective role in their economic and social development. Guiding Principles In addition to the above goal and objectives the IPoA spells key guiding principles that were based on building a sustainable development partnership where developed and developing countries worked together in a manner that fast tracks attainment of both the above objectives and the realization of the overall goal. These principles include: i. Ensuring country ownership and leadership; ii. An integrated approach that promotes policy coherence and consistency with international economic, financial and trading systems; iii. Promoting genuine partnership and solidarity with enhanced global support and mechanisms at all levels for the achievement of the IPoA goals and objectives; iv. Focusing on a Result orientation where monitoring and assessment of progress under the IPoA contribute to enhancing mutual accountability and effectiveness of development cooperation; v. Ensuring peace and security, development and human rights, as pillars of the United Nations system and the foundation for collective security and well-being; vi. Ensuring Equity at all levels is indispensable for the pursuit of long-term prosperity; vii. Supporting voice and representation through an international system that supports inclusive growth and effective participation for all and at all levels; viii. Balancing the role of the state and market considerations, where every Government commits to design policies and institutions with a view to achieving sustainable and inclusive economic growth that translates into full employment, decent work opportunities and sustainable development. 1.3 Themes and Priority Areas of Action There are eight (8) themes under this protocol that are priority areas of action. Overall, LDCs are expected to make progress in areas that are critical for structural transformation and the productive capacity such as in science, technology and innovation, and investment promotion. Secondly the LDCs are expected to align their national planning processes and ensure incorporation of the goals and prioritization of the IPoA, including strategies to achieve graduation out of the LDC category by or around LDCs would then implement key strategies put in place to meet the graduation criteria based on the eight priority areas of the IPoA. These include the following: i. Increasing the productive capacity in key sectors: infrastructure; energy; science, technology and innovation and private sector development; 2 Mid-term Review of Implementation of the Istanbul Programme of Action

12 ii. Supporting agriculture, food security and rural development; Is there a reason why this priority is not elaborated iii. Enhancing trade; with an emphasis on integrating trade and trade capacity building policies into national development strategies; improving productivity and competitiveness, diversification of production bases and export products and markets to non-traditional destinations as well as increasing the transparency of institutions to better facilitate trade and improve standards; iv. Focusing on key commodities through establishing and strengthening (as appropriate) the national commodity management strategies and sector specific policies and measures to enhance productivity as well as vertical diversification and ensure value addition and value retention; v. Investing in human and social development with a focus on education and training; population and primary health; youth development; shelter; water and sanitation; gender equality and empowerment of women; social protection; vi. Putting in place a mechanism to address multiple crises and other emerging challenges: economic shocks; climate change and environmental sustainability; disaster risk reduction; vii. Mobilizing financial resources for development and capacity-building: domestic resource mobilization; official development assistance; external debt; foreign direct viii. investment and remittances; and Ensuring good governance at all levels including fostering a just, transparent and a well-functioning government accountable to the people and one that promotes access to an independent judicial system; and ensures an environment conducive to social economic development. Finally, Uganda was to ensure that under the post-2015 Development Agenda and other global processes effort is done to link the IPoA and Uganda s overarching development strategy, with a view to determining how this linkage will lead to inclusive development, and ultimately graduation by The IPoA Inclusion and Graduation Criteria Inclusion Criteria The specific processes under the inclusion criteria include the following: i. Acceptance to be Categorized: Interested governments formally participate in this process of categorization and the UN Secretariat of Department of Economic and Social Affairs (DESA) then notifies the country of the eligibility finding. ii. The Committee for Development Policy (CDP) which is a subsidiary body of the United Nations Economic and Social Council then reviews the status of each LDC for the purpose of monitoring their progress and eventual graduation and submits inclusion recommendation to the Economic and Social Council of United Nations (ECOSOC). iii. ECOSOC endorses the recommendation by the CDP iv. The Country then notifies the UN Secretary General on its acceptance v. The General Assembly takes note of this formal submission and notes the ECOSOC recommendation and vi. Inclusion then takes immediate effect 3 Mid-term Review of Implementation of the Istanbul Programme of Action

13 1.4.2 Graduation Criteria Graduation from LDC status is reached based on a three-fold assessment criteria: i. Gross National Income based on a three-year average estimate of GNI per capita for the period using the World Bank Atlas method (under $1,035 for inclusion, above $1,242 for graduation as applied in the 2015 triennial review). ii. Human Assets Index (HAI) based on indicators of: (a) nutrition: percentage of population undernourished; (b) health: mortality rate for children aged five years or under; (c) education: gross secondary school enrolment ratio; and (d) adult literacy rate. iii. Economic Vulnerability Index (EVI) based on indicators of: (a) population size; (b) remoteness; (c) merchandise export concentration; (d) share of agriculture, forestry and fisheries; (e) share of population in low elevated coastal zones; (f) instability of exports; (g) victims of natural disasters; and (h) instability of agricultural production. 1.5 Rationale for the Mid-Term Review Undertaking a mid-term review of the IPoA is part of the fulfilments of the implementation of this international commitment. The mid-term review provides information of how far Uganda has progressed since 2010 when the IPoA came into effect and the likelihood of graduation out of the LDC category by This presents aspects where improvement and therefore more is required against the three-tier graduation criteria as a guide to planning and budgeting framework both at the sector levels and more broadly under the NDP process. The mid-term review also presents challenges as well as opportunities that Uganda can leverage to enhance its performance under each of the eight (8) priority areas of the IPoA. This report also makes recommendations for Uganda s post 2015 agenda to fast-track the attainment of results to meet the graduation criteria out of the LDC category by Why Graduation out of the LDC Category is important for Uganda Uganda s Vision 2040 envisages that Uganda would have graduated from low income to a medium income country by 2017 to reach a GDP per capita of US dollars 9,500 by 2040 (Vision 2040 paragraph 10). As ambitious this it, it remains the target. Participating in processes like the IPoA presents Uganda an opportunity to focus public investments where it needs to improve. Already this review has shown that more needs to be done to improve on aspects like nutrition, child mortality and export diversification and value addition. Graduation out of the LDC category would complete the first phase of transitioning from the focus on poverty reduction to development which is the critical to realizing vision FACT NOTE: Botswana, Cape Verde, Maldives and Samoa graduated out of the LDC Category under IPoA in Under the 2018 review, Bhutan, Sao Tome and Principle, Solomon Islands, Timor-Leste and Nepal are on course to graduate 2 Mid-term Review of Implementation of the Istanbul Programme of Action

14 Chapter 2 Status of Uganda s Performance against the LDC Graduation Criteria 3 Mid-term Review of Implementation of the Istanbul Programme of Action

15 Chapter 2: Status of Uganda s Performance 2.1 Uganda Today Structure of Uganda s Population With a population of 34.2 million people and one that has risen by 44% since 2002, Uganda is one of the fastest growing countries in the world with an annual population growth rate of 3% per annum. It also has the youngest population in the world with 57% of the population below 18 years (UBOS, 2012/13 estimates). Most of Uganda s population (60%-70%) is primarily engaged in agriculture and nearly 80% of it resides in the rural areas. However, agriculture is a declining source of income with only 26% of population relying on it as their sole source of income. Private non-agricultural wage employment is growing at 12% per annum and is highly concentrated in urban areas. Being food secure and trading within the region, Uganda remained resilient to the global economic slow-down of Uganda continues to be an active player in the East African Community (EAC) and the Common Market for East and Southern Africa (COMESA) and other regional trade blocks. Uganda s Economic Performance Uganda has maintained strong economic performance over the last two decades averaging 5.8% per annum above sub-saharan Africa average. However, foreign exchange volatility presents a serious challenge to Uganda s macroeconomic stability. This is coupled with economic challenges in the developed world that has prolonged the weak demand for Uganda s exports; low prices for coffee and tea her main exports and the depreciation of Uganda shilling particularly in the last two years. The table below is a synopsis of key facts and figures on Uganda s development trends. Table 2: Uganda Facts and figures Indicator Baseline Current Status Population 24.2million (2002) 34.6 million (2014) GDP Growth Rate 5.9% (2011/12) 5.4% (2015/16) Population below poverty line 24.5% (2009/10) 19.7% (2012/13) Life expectancy at birth (years) 51.5 (2009/10) 63.3 (2014) Maternal Mortality Ratio 438 per 100,000 (2011) 360 per 100,000 (2013) Infant Mortality Ratio 76 per 1,000 (2006) 53 per 1,000 (2014) Literacy Rate 76% (2010) 74 (2015) HIV/AIDS prevalence 6.3% (2004/05) 7.1% (2011/12) Current account balance % GDP (2011) -7.5 (2014) Inflation 30.5% (2011) 4.3% (2015) ODA to GDP Ratio 11.3% (2003/04) 2.7% (2013/14) Internet Use 1.1% (2004) 21.6% (2011) Cellular Subscribers 4.5% (2004) 51.9% (2011) Source: MDG Report 2015, UBOS Database Uganda s inflation has been managed by a combination of monetary and fiscal policies and measures to address spikes in headline inflation and a strong dollar. In light of these difficult times, the banking sector has had to do with high interest rates which has cut back on lending and 4 Mid-term Review of Implementation of the Istanbul Programme of Action

16 contracted many aspects that would ideally expand the productive sectors. Uganda continues to rely on her development partners for grants and concessional loans to finance key public investments especially in energy, roads and rail infrastructure. The level of reliance is however declining with the share of national budget financed from domestic sources rising from 48% in 2002/3 to 82% in 2014/15. Nonetheless, Uganda has maintained sustainable debt levels with liquidity and solvency indicators well below standard thresholds of 55%. This presents Uganda an opportunity to adopt an expansionary fiscal policy for ambitious investments as elaborated in her Vision Status of Uganda s Performance T he thrust of Uganda s participation in the IPoA process is to graduate from LDC to lower Medium Income Country status in line with the Vision This section presents an assessment of the status of Uganda s performance against the UN s graduation criteria: Income; the Human Assets Index and the Economic Vulnerability Index criteria The Income criterion Uganda s GDP grew (at current market prices) from US$12.5 billion in 2010/11 to an estimated US$21.2 in 2014/15 (MoFPED, 2015). However, the overall GDP growth rate reduced from a high of 9.7% in 2010/11 to 4.5% in 2013/14 as shown in Fig 1 below. Uganda s economic growth record over the last decade has also been comparable to that of its regional peers, especially the East African member states. Figure 1: Overall GDP Performance Source: Uganda Today Bulletin 2014 Official per capita income figures for Uganda are presently derived based on Gross Domestic Product (GDP) as opposed to Gross National Index (GNI) as required under the IPoA assessment. The difference is that while GDP per capita measures national output or expenditure per year per national; GNI per capita measure this same level of output by only residents of that country (plus any product taxes, and net receipts of primary income from abroad). 5 Mid-term Review of Implementation of the Istanbul Programme of Action

17 Uganda s GDP per capita in FY 2013/14 was US$686 compared to a GNI per capita of $643. GDP per capital in FY 2014/15 is however likely to reduce on account of the large depreciation of shilling against the United States dollar (21.5%) that Uganda registered in FY 2014/15. The IPoA income criterion takes the average of a country s GNI per capita over the latest threeyear period based on the World Bank Atlas method (under $1,035 for inclusion, above $1,242 for graduation as applied in the 2015 triennial review). According to the estimate of the UN under IPoA criteria, Uganda s GNI average of the latest three years stands at US $635 about half of the threshold for graduation (US$1,242) Table 3: GNI Per Capita Trends in Uganda UGANDA IPoA Graduation Threshold GNI per capita $610 $630 $630 $670 $635 $1,242 Source: World Bank Atlas January Human Assets Index (HAI) The second graduation criterion is based on five human development outcome indicators: nutrition where reporting is made against the percentage of population undernourished; health with a focus on mortality rate for children aged five years and education focusing on the gross secondary school enrolment ratio and adult literacy rate as all shown in the fig.2 below. Fig:2 Human Assets Index criterion and assessment indicators A Nutrition Malnutrition remains a challenge for Uganda. According to UNICEF statistics, 33% of Ugandan children aged under 5 years (2.3 million children) are undernourished. This share stands at 12% among women. Anemia prevalence stands at 49% among children under 5% and 23% of women 6 Mid-term Review of Implementation of the Istanbul Programme of Action

18 of reproductive age. According to the World Bank Atlas referenced for this valuation, the proportion of Ugandans that are undernourished stands at 25.7% and the target is to reduce this substantially by However, Uganda has made gains in addressing the challenge of malnutrition within the context of its Food and Nutrition Policy of 2003 and its implementation strategy (2005). In 2011, Uganda launched the Uganda Nutrition Action Plan whose purpose was to scale up multi-sectoral efforts and to establish a strong nutrition foundation for Uganda s development. As part of this process, Uganda is now elaborating a new policy and strategy on nutrition for the period B: Under 5 Child Mortality Rate Uganda has achieved significant progress in reducing under-5 child mortality rate with death per 1,000 children reducing by 40% in half a decade, between 1995/6 to 2011/12 from 152 per 1,000 to 90 per 1,000 in 2011 (UDHS, 2011) as shown by Fig.3. Latest census results put this figure at 80 per 1,000, signifying an improvement but not big enough meet its MDG target of 54 deaths per 1,000 children. There are three main causes of child mortality in Uganda: malaria which is the leading cause of infant deaths and all Ugandans in general; pneumonia and anemia are the other causes accounting for 12.4% and 12.2 % respectively of child deaths (MDG report, 2015) Source: UDHS 2011 Fig 3: Trends in reducing child mortality Under 5 mortality rate per 1,000 livebirths 152 C: Education Uganda started by implementing a Universal Primary Education programme followed by Universal Secondary Education to lift the profile of literacy in Uganda. The government had realized that ensuring attendance in secondary education will require support to primary level education. Since UPE got underway in 1997, enrolment has risen three fold from 2.7million children in primary school to 8.5million in 2014, and gender gap has been eliminated. Secondary school enrolment has correspondingly risen from 814,087 in 2007 to 1,362,739 in 2014 narrowing the gender gap from 72.7% in 2006 to 88.3% in 2014 as shown in Table 4 below / / / / Mid-term Review of Implementation of the Istanbul Programme of Action

19 Outcome Indicator Table 4: Performance of the sector mid-way through NDP 1 NDP Baseline 2008/09 Actual 2010/11 Actual 2011/12 Actual 2012/13 Actual 2013/14 Actual 2014/15 Net enrolment rate primary (%) Net enrolment rate secondary (%) Net completion in secondary (%) N/A Pupil - teacher ratio in primary Pupil classroom ratio in primary Student teacher ratio in secondary 18 / Student classroom ratio in 45 / secondary BTVET enrolment ( 000) 9,344 11,124 23,498 42,674 39,712 According to the UN statistics, gross secondary enrolment ration stands at 26.9%. The other aspect under assessment is adult literacy. Uganda has one of the highest adult literacy in Africa standing at 73.2% (UN Database 2015). All together the computation of this criterion puts Uganda s DHI index at 53.6, a reasonable distance from the 75.2 graduation threshold by Economic Vulnerability Index (EVI) The third set of criteria under this assessment is the economic vulnerability index. This index is based on the following indicators: population size; remoteness; merchandise export concentration; share of agriculture, forestry and fisheries; share of population in low elevated coastal zones; instability of exports of goods and services; victims of natural disasters; and instability of agricultural production. This criterion is split further into two indices: exposure index that denotes the extent to which countries are exposed to shocks that make them susceptible to economic vulnerability and shock index that looks at trade shocks and the likelihood of occurrence of natural disasters as shown in the Fig.4 8 Mid-term Review of Implementation of the Istanbul Programme of Action

20 Fig. 4: Constitution of the Economic Vulnerability Index A EXPOSURE INDEX A 1 Structure of Uganda s Population Uganda under took a census in August 2014 that put Uganda s population at 34.9 million this differs from the UN figure of 37.5 that had been projected. This census showed a slow-down in Uganda s fertility rate at 6.2 (down from 6.9 in 1995) and an annual population growth rate of 3% per annum lower than 3.2% that had been projected. The question for Uganda is whether this population presents a demographic dividend or is increasing the dependency. Uganda already has one of the youngest populations in the world with 57% of the population below the age of 18. Uganda s labor factor productivity is very low (second lowest in EAC) 1. Despite having a fast growing middle class that has increased by sevenfold in the last two decades (from 1.8 million in 1992/93 to 12.6million in 2012/13), 63% of Ugandans remain either poor or vulnerable to poverty 2. Job growth also lagged behind population growth. The World Bank s latest Enterprise Survey data for Uganda (January 2013 to July 2014) shows that between 2010 and 2012, formal business establishments in Uganda added jobs at an annual rate of 2 percent, which was one-third of the average 6 percent for low income countries, and one quarter of the annual growth rate a decade ago (2004 and 2006). A2 Remoteness The rationale of this indicator is the linkage of population location and distance to key amenities that support a higher quality of life including safe water and sanitation, electricity, education and health care. Most of Uganda s population is remote. Only 18.4 % of Uganda s population resides in the urban areas compared to the African average of 22%. The majority of urban areas other than the capital Kampala have an average of 25,000. Improving of Uganda s telephone network 1 Source: EAC Secretariat Labour Productivity Study Commissioned in Kenya came on top with Burundi last 2 MFPED (2014) Uganda Status of Poverty Report 9 Mid-term Review of Implementation of the Istanbul Programme of Action

21 Sectoral Growth has gone a long way in improving the connectivity between persons and businesses which as an imperative for reducing remoteness. Uganda has one of the highest phone per capita indices in the world now standing at 52%. Out of 34.9 million there are 15.7million telephone lines mostly on mobile. The expansion of the road network has increased the connection between the main urban centers. Uganda needs to improve her paved road network from the baseline of 3,795km to 6,000 by 2020 (NDPII target). Uganda is on track to meet the UN s remoteness threshold of 72% and now stands at 67.6%. A3 Share of Agriculture to GDP Uganda s computation of the share of Agriculture to GDP includes hunting, fisheries and forestry resources. Annual growth of agricultural GDP has been slow, with a 2.3 annual increase in 2014/15. Coffee, tea and cotton as well as fish continue to be Uganda s leading exports. Fish has particularly increased as a contributor to overall agriculture contribution growing by 40% in the 2014/15 financial year alone as the demand for fish has increased both in Uganda and abroad. Stronger performance of the services and industry sectors have contributed to Uganda s strong economic performance compensating for the decline in the contribution from agriculture which has fallen due to low prices at the global market and weak demand due to weak economic performance in the developed countries. Strides in manufacturing ensured that industry overtook services and agriculture as the leading contributor of economic growth for the first time in 2014/15 as shown in Fig. 5 below. 14.0% Fig. 5 Contribution of agriculture industry to real GDP growth 12.0% 10.0% 8.0% 9.7% 6.0% 4.0% 2.0% 2.9% 1.1% 4.4% 3.3% 1.8% 1.5% 4.5% 4.4% 5.0% 0.0% 2010/ / / / /15 Agriculture, Forestry and Fisheries Industry' Services Annual Real GDP growth Source: MFPED 2014/15 Background to the Budget Overall agriculture s contribution to GDP rose from 24.7% in 2010/11 to 26.5% in 2011/12 but only to reduce again to 24.05% in 2014/15. During the same period, the contribution of the services sector increased from 47.7% and marginally to 47.8%. A4 Merchandise Export Concentration The criterion of merchandize export concentration aims at ensuring that inasmuch as countries continue to focus on export products in which they have a competitive advantage, they also 10 Mid-term Review of Implementation of the Istanbul Programme of Action

22 diversify and enter new markets to maximize their export potential. The fact that Uganda s has maintained coffee, tobacco and tea as her key products on the global market for the last five decades has made it vulnerable to external market shocks and demand swings. Consequently, Uganda s net exports declined from 10.9% in 2012/13 to 8.4% in 2013/14. The rating of merchandise export concentration for Uganda under the UN rate is 0.2 compared to the 11.3 threshold making this the single lowest scoring for Uganda on the IPoA ratings. In response, Uganda is aiming to diversity its export platform with a renewed focus on key flagship products outlined in the NDP II and these include 12 flagship agricultural enterprises: coffee; cotton; tea; maize; rice, cassava, beans; fish; beef; milk; citrus and bananas. Improved performance in manufacturing and prudent investments in the mining (including oil and gas) will ensure Uganda improves in the coming years. A5. Share of population in low elated costal zones This criterion does not apply to Uganda B: SHOCK INDEX A6 Instability of exports of goods and services By 2012, Uganda s export value reached $2.8 billion of which formal exports accounted for $2.4 billion was from the formal sector. Since 2010, export value has risen by 11.8% (NDPII) Food exports (especially to DR Congo, South Sudan and Rwanda has posted a strong performance compensating for lower export performance in tea, coffee and tobacco. Uganda has been negatively affected by the instability of her export of goods and services due to volatility of the foreign exchange regime; reduced demand in America, Europe and Asia associated from the economic downturn as well as a general price falls especially for coffee and tea. However, COMESA countries continue to be the export destination for most of the export volumes accounting for 56.5% of total exports since In 2014/15 the deficit on trade account increased by 4.1% from US $2.25million to in 2014 to US$2.34 by March 2015 as a result of lower export earnings and marginal increase in import expenditure (MoFPED, 2015). However, Uganda s export base especially in Tobacco, fish, oil re-exports and coffee continue to hold steady despite the low prices and demand globally. Under the UN rating, the index for Uganda is 2.8 way below the 7.8 threshold for graduation. This is a pointer that Uganda will have to diversify her export, improve her trade balance in ways that spread the risk and reduce the instabilities in her export sector. A7 Victims of natural disasters Uganda has very few instances of natural disasters with landslides in highly terrains in far eastern Uganda on the Elgon ranges and the far west on the Rwenzori ranges presenting risks from time to time. Uganda is elaborating a disaster preparedness policy and has a state ministry in the Office of the Prime Minister coordinating responses with ministries and development partners to address challenges of victims of disasters but to also strengthen Uganda s disaster Early Warning Systems (EWS). The Entebbe based Decision Support System of the Nile Basin Initiative and the Government own Meteorological center are key providing data to this EWS. A8 Instability of Agricultural production According to UBOS 2014 statistical abstract, the total area planted of food crops increased to 5,745,000 Ha (0.3 percent) in Only 70% of Uganda s arable land is under cultivation. More 11 Mid-term Review of Implementation of the Istanbul Programme of Action

23 land has however been opened up with peace returning to northern Uganda after 20 years of conflict. The rate of growth of the has oscillated between 3.2% and 2.3% since 2009/10 with a contribution 25% to GDP in 2013/14 as shown in Fig. 6 below Fig 6: Illustration of growth rate of agriculture (left) and contribution overall to GDP (right) 3.2 Agriculture Services Industry Other 2.9 7% % 21% % 2009/ / / / / /15 Source: Consultant analysis data from Agriculture Sector Performance Review (2014) In 2014, tea production increased by 3.4 percent in 2013 and tobacco production increased by 60.6 percent in Maize has continued to be a key food crop for Uganda and in many ways a cash crop as well but poor rains ensured only 0.5% increment in production between 2013 and Failed rains were also responsible for drop in production of banana (by 2.8%) and beans which usually do well increased production by only 0.8%. Coffee bounced back after the rise in coffee prices in 2013 as the global demand increased with end of the global financial downturn. The quantity of Coffee procured in 2013 increased by 11.5 percent. The strongest performance has been for fish whose catch from Lake Victoria increased from Mt in 2012 to 193 Mt in Uganda has also registered rapid growth in the dairy and poultry products. Overall, the instability of agricultural production is caused by three main challenges: a) Dependency on rain-fed agriculture which causes drops in production during droughts b) Pest and diseases mainly coffee wilt and banana wilt diseases among others c) Declining soil fertility and very low uptake of the right combinations of both organic and inorganic fertilizers. Uganda uptake of fertilizer is only 1kg/ha per year below the 500kg/ha recommended for Ugandan soils 12 Mid-term Review of Implementation of the Istanbul Programme of Action

24 Table 5: Summary Table of Uganda s Assessment Criterion Indicators Performance Overall against the Three step IPoA criteria thresholds or assessment scores Income criterion Human Assets Index GNI Per capita (GNI UN computation 2014) Note that Uganda uses the GDP as a measurement criterion Under 5 Mortality Rate (NHPC 2014) Population Malnourished (%) (FAO 2013) Gross Secondary School enrolment ration (EMIS, 2013/14) Literacy Rate (MoES 2015) 74 (64.3) Economic Vulnerability Index Population (UBOS 2014 census) Remoteness (%) World Bank (34.9) 67.6 (72) Merchandise export 0.2 (11.3) concentration (UN Fact sheet 2015) Share of Agriculture (MoFPED 27.5 (44.9) 2014/15) Population in coastal areas N/A Instability of exports of goods 14.6 (31.9) and services (UN Fact Sheet 2015) Victims of natural disasters (UN 0.87 (67.9) Fact Sheet 2015) Instability of agricultural 2.8 (7.2) production (UN Fact Sheet 2015) OVERALL ASSESSMENT $663 ($1,242) $663 compared to ($1,242 threshold) 80 (66) (65.5) Compared to (18.7) threshold for LDCs 31.8 Compared to 32.0 threshold for LDCs Likelihood of Graduation by 2020 using the traffic lights methodology Not likely Less Likely Likely Less Likely to Graduate by Mid-term Review of Implementation of the Istanbul Programme of Action

25 Chapter 3 Alignment to National Planning Processes 14 Mid-term Review of Implementation of the Istanbul Programme of Action

26 Chapter 3: Alignment of National Planning Processes to the IPoA Agenda 3.1 Uganda s Planning Dispensation U ganda adopted a Comprehensive National Development Framework after implementation of the Poverty Eradication Action Plan (PEAP) in 2009/10. This framework set up the Uganda Vision 2040 to be implemented in a sequence of national development plans and a national aspiration to ensure a transition from poverty reduction to development and prosperity. Uganda had already been a signatory to the Millennium Declaration of 2000 and the MDGs became a focus for the second PEAP ( ). Development partners (especially those providing budget support) called for the alignment of national planning to the MDGs and more resources were allocated to social sectors. Poverty reduced from a high of 56.4% in 1992/93 to 24.5% at the beginning of NDP I and a lot was done to ensure that Uganda achieved other MDG goals and targets but also reference was made to the Brussels Programme of Action that preceded the IPoA The IPoA started at the same time as the NDP I in 2010 and as a consequence alignment was not possible. However, as the IPoA got implemented, there was awareness (beginning from the midterm review of the NDP I) that alignment was critical to attainment of vision The vision had a much higher ambition to ensure that Uganda attains a medium income country status by Under the NDP II, the alignment, to IPoA has increased and all the five priority areas under this plan are linked to the eight priority areas of the IPoA as shown below. IPoA (Eight Priority Areas) 1. Increasing productive capacity 2. Supporting agriculture 3. Enhancing trade 4. Focusing on key commodities 5. Investing in Human and social development 6. Multiple crises 7. Mobilizing financial resources 8. Ensuring Good governance NDP II (Uganda prioritized five areas where Uganda has the highest multiplier effect) 1. Agriculture 2. Tourism 3. Minerals, oil and gas 4. Infrastructure development; and 5. Human capital development. (NDP II has a two sub-chapters on sources of financing sources and Governance) The alignment is further illustrated by the extent to which national targets under NDP II are in tandem with the IPoA priority areas as shown by Table 6 below. 15 Mid-term Review of Implementation of the Istanbul Programme of Action

27 Targets Priority Area 1: Increase productive Capacity Targets Value addition Table 6: Illustration of Uganda s development agenda and the alignment towards implementation of the IPoA Indicator (proxy indicators that relate 2010 /11 Now Target for Commentary to Uganda context in some cases) (baseline) (2015/16) 2020 under NDP II Government focusing on value addition especially in agro processing and providing incentives for foreign investors in this effort. The construction of an oil refinery is a core investment over the medium term. Access to telecommunication services Mobile Phone coverage 9.5m lines 15.7m lines 22m lines Projection by consultant for 2020 Primary Energy Supply per capita Electricity per capita 80kWh 90 kwh 578 kwh Rural electrification a key public investment in the medium term Renewable Energy Hydro Power dams being prioritized to transit from thermal power sources Enhancement of energy production and Total installed capacity 595MW 850MW 2,500 MW Karuma Isimba and distribution (2013/14) Agago dams to come on grid by 2025 Road Transport Paved Roads (km) 3,000 3,795 6,000 km Restructuring at Uganda s Road Authority to improve performance Rail Transport Freight Cargo by Rail (thousands of tons) Air Transport International air passenger traffic through Entebbe Priority Area 2: Supporting Agriculture Food Security and Rural Development Targets Indicator Eradication of Hunger Share of population below poverty line 12 (2012/13) 1.34 million (2012/13) million tons Standard Gauge Rail commissioned to run through to Kigali and Juba 1.47 million 2.16 million Revamping of Entebbe Airport ongoing Uganda has largely remained food secure save for food stricken areas in Karamoja 16 Mid-term Review of Implementation of the Istanbul Programme of Action