BRIEF ON THE SECOND NATIONAL DEVELOPMENT PLAN (2015/16-2019/20) 1.0.Introduction
Cabinet approved the Comprehensive National Development Planning Framework (CNDPF) in 2007 which provides for the development of a 30 Year Vision to be implemented through: Three 10-Year Plans; Six 5-Year National Development Plans (NDPs); Sector Investment Plans (SIPs);
Local Government Development Plans (LGDPs), and Annual Work Plans and Budgets.
Subsequently, Cabinet approved the Uganda Vision 2040 (2010/11-2039/40) which articulates long and medium term development goals and targets, strategies, and policy shift options required to transform the country into a “Competitive Upper Middle Income Country by 2040”.
The First NDP (2010/11-2014/15) has to, some extent, been successfully implemented as highlighted in the summary of achievements below.
2.0. The NDPI achievements and remaining gaps 2.1. Key NDPI Achievements
Poverty reduced from 24.5 percent in FY2009/10 to 19.7 percent in FY 2012/13.
Under five mortality reduced from 137/1000 live births in 2006 to 90/1000 live births in 2011.
Life expectancy at birth increased from 51.5 in 2009/10 to 54.5 years in 2011/12.
The transition rate from P7 to S1 increased from 47 percent in FY2006/07 to 73 percent in FY 2013/14 largely due to the introduction of USE.
Electricity installed generation increased from 595MW in 2010 to 825MW in 2012.
Percentage of the population accessing electricity from the national grid increased from 10 percent in 2009 to 14 percent in 2013.
Volume of national paved roads increased from 3,264 kilometers in 2011 to 3,500 kilometers in 2013.
Per Capita income increased from USD 665 in 2009/10 to USD 788 in 2013/14.
Sustained Macro-economic stability and increased growth.
Above all, there has been sustained peace and security across the entire country.
2.2. Remaining Gaps
There are still remain gaps that require redress during the implementation of NDP II. These include;
i) The slow pace of implementation of critical reforms, overlapping and conflicting institutional mandates as well as lax enforcement of existing laws and policies.
ii) Slow implementation of some of the core infrastructure projects that were meant to unlock the economy.
iii) Low labour productivity, bureaucracy.
iv) Limited access to finance, to facilitate private sector development.
v) The high cost of doing business due to high cost of energy, transportation and weaknesses in the financial services sector.
vi) Heavy reliance of local governments on Central Government funding with dwindling local revenues insufficient to support financing of local service delivery.
vii) Wide variations between regions in development outcomes and the quality of services, calling for special development considerations in certain regions.
3.0.NDPII Formulation Process
National Planning Authority (NPA) has ably collaborated, coordinated all key stakeholders and provided stewardship in production of the Plan. The preparation process was informed by the Uganda Vision 2040, the Post 2015 Sustainable Development Agenda, Africa Agenda 2063, findings and recommendations of the Mid-Term Review of NDPI and performance of NDPI and the preliminary National census results. The process was also highly consultative, generating views and technically engaging all Sectors, Ministries Departments and Agencies (MDAs), Parliament, Local Governments, Development Partners, Civil Society Organizations, the Private Sector, Religious and Cultural Leaders, the Media, and the general public in various fora.
4.0. Strategic Direction 4.1.Thrust
The thrust of the NDPII is to propel the country to middle income status in the next five years through prioritizing investment in five key growth drivers with the greatest multiplier effect as identified in the Uganda Vision 2040. This thrust builds on the achievements of NDPI which was largely based on strengthening the foundation of the economy to set the stage for future economic growth and social transformation.
4.2.The NDPII Theme
In line with the country’s Vision of “A Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 years”, the theme for the Second National Development Plan (2015/16 to 2019/20) is “Strengthening Uganda’s Competitiveness for Sustainable Wealth Creation, inclusive Growth and Employment.”
4.3.Goal
The goal of this Plan is to propel the country into middle income status by 2020. This will be realized through strengthening the country’s competitiveness for sustainable wealth creation, employment and inclusive growth. In this regard, Government shall pursue a private sector-led, export oriented, quasi-market and value addition development strategy coupled with emphasis on skills development. The Plan thus sets key objectives and targets to be attained during the 5 year period.
4.4.NDPII Objectives
In order to realize the above goal, four objectives will be pursued and these are;
i) Increase sustainable production, productivity and value addition in key growth opportunities.
ii) Increase the stock and quality of strategic infrastructure to accelerate the country’s competitiveness.
iii) Enhance human capital development; and
iv) Strengthen mechanisms for quality, effective and efficient service delivery 4.5. KEY DEVELOPMENT RESULTS
For the next five years, in order to achieve the objectives of the Plan, Government will focus on attaining the following results;
i) Increasing per capita income from USD788 to USD1,039 and Increasing GDP growth rate from 5.2 to 6.3 percent
ii) Reducing the poverty rate from 19.7 per cent to 14.2 per cent, and reducing inequality co- efficient from 0.443 to 0.452;
iii) Reducing the number of young people not in education, employment or training by at least 20 per cent;
iv) Increasing manufactured exports as a percentage of total exports from 5.8 percent to 19 percent
v) Increasing the percent of the population with access to electricity to 30 percent from 14 percent and the consumption of electricity (Kwh Per capita) to 578 from 80.
vi) Increasing the quantity of total national paved road network (Km) to 6000 from 3500.
vii) Raising the Life Expectancy at birth to 60 years from 54
viii) Increasing the average years of schooling from 4.7years to 11years.
i) Reducing the Infant Mortality Rate per 1,000 live births from 54 to 44, and the Maternal Mortality Ratio per 100,000 live births from 438 to 320/100,000;
ii) Reducing fertility from 6.2 to 4.5 children per woman;
iii) Increasing primary to secondary school transition rate from 73 percent to 80 percent and Net Secondary Completion from 36 percent to 50 percent.
iv) Increasing the contribution of tourism to GDP from 9 percent in 2012/13 to 15 percent in 2019/20.
4.6. NDPII STRATEGIES
In order to realize the above macro and sectoral results, strategies that will be pursued by Government during the implementation of the NDPII include;
i) Fiscal expansion for frontloading infrastructure investment through concessional and semi- concessional financing.
ii) Industrialization targeting agro-processing, light manufacturing, and large scale industries.
iii) Fast tracking skills development in partnership with the private sector specifically targeting mineral, oil and gas, and infrastructure.
iv) Export oriented growth through diversifying the export basket and market, while adding value to traditional export commodities.
v) A Quasi-Market Approach through creating strategic Public-Private Partnerships (PPPs) for investment in infrastructure, human capital, minerals, oil and gas, tourism and agriculture..
vi) Harnessing the Demographic Dividend through implementing policies and programmes aimed at accelerating a rapid decline in fertility while ensuring surplus labour force.
vii) Planned urbanization through strengthening physical planning and infrastructure.
viii) Strengthening Governance through improving the functionality of local governments, increasing efficiency in service delivery and fighting corruption.
4.7. NDPII PRIORITY AREAS AND STRATEGIC INTERVENTIONS
The plan has prioritized the following growth areas namely: Agriculture; Tourism; Minerals, Oil and Gas; Infrastructure; and Human Capital Development.
a) Agriculture
In agriculture, emphasis will be placed on investing in 12 enterprises (Cotton, Coffee, Tea, Maize, Rice, Cassava, Beans, Fish, Beef, Milk, Citrus and Bananas), along the value chains.
Focus will be on: Strengthening agricultural research; implementing the single spine extension system; technology adaptation at the farm level; increasing access to and effective use of critical farm inputs; promoting sustainable land use and soil management; increasing
access to agricultural finance with specific options for women farmers; and strengthening agricultural institutions for effective coordination and service delivery.
b) Tourism
The tourism sector has demonstrated high potential for generating revenue and employment at a low cost, implying a high return on investment. This plan focuses on improvement, diversification and exploitation of tourism products. Emphasis has been placed on: i) aggressive marketing; ii) investment in tourism facilitating infrastructure (energy, water, and ICT); iii) appropriate skills development and improvement in related services; iv) increasing the quantity and quality of accommodation facilities; v) intensifying the provision of security and protection of tourists and tourist attraction sites; vi) capacity building, tourism management and; viii) conservation of tourism sites and wildlife.
c) Mineral, Oil and Gas Development
The availability of 27 types of minerals in significantly commercially viable reserves provides opportunity to build a strong mining industry that will be a source of revenue and employment, while supporting the economic lifeline industries. The key minerals earmarked for exploitation and value addition include; Iron ore, Limestone/Marble, Copper/Cobalt, Phosphates, Dimension stones and Uranium. In addition, the exploitation of an estimated resource of 6.5 billion barrels of oil with a recoverable potential of 1.4 billion barrels is prioritized.
Therefore, investment for the next five years will thus focus on: i) Development of geological surveys; ii) investment in more survey and exploration; iii) faster acquisition of land; iv) construction of 3 Pipelines to transport crude oil to Lamu and Mombasa; refined products to Kampala, Eldoret and Kigali, and Liquid Purified Gas (LPG) to Kampala and Gulu; v) Construction of oil and gas refinery; and vi) increased prospecting and processing of the selected minerals.
d) Infrastructure
Investment in transport infrastructure will include: the Standard-Gauge Railway; and upgrading of strategic national roads from 3,795km to 6,000km. In line with this Plan’s prioritization framework, strategic roads to support exploitation of minerals, oil and gas, tourism and decongestion of traffic in the city areas will be targeted. In addition, efforts will be geared towards increasing the volume of passenger and cargo traffic by marine traffic.
As regards to energy infrastructure, investment will be focused in exploitation of the abundant renewable energy sources including hydropower, geothermal, and nuclear so as to increase power generation capacity from 825MW in 2012 to 2,500MW by 2020. Government will focus on the following projects in the next five years: i) Construct Karuma Hydro Power dam (600MW); ii) Construct Isimba Hydro Power dam (183MW); and iii) construct other small hydro power plants as well as power extension transmission networks.
In the ICT area, priority is on extension of the National Backbone Infrastructure (NBI), construction of ICT incubation hubs/ centres and ICT parks. Government will also invest in water for
production to boost commercial agriculture and industrial activities. In ICT, the focus will be on extension of the National Backbone Infrastructure (NBI).
e) Human Capital Development
The human capital development priority area will focus on increasing the stock of a skilled and healthy workforce towards the production of human capital to accelerate the realization of the demographic dividend. Strategic interventions under each sector are highlighted below.
i) Health: emphasis will be on: mass management of malaria (mass malaria treatment for prevention); National Health Insurance scheme; universal access to family planning services;
health infrastructure development; reducing maternal, neonatal and child morbidity and mortality; scaling up HIV prevention and treatment; and developing a centre of excellence in cancer treatment and related services.
ii) Education: Strengthening Early Childhood Development (ECD) with special emphasis on early aptitude and talent identification; Increasing retention at primary and secondary levels, especially for girls, as well as increasing primary-to-secondary transition; increasing investment in school inspection; reviewing and upgrading the education curricula.
iii) Skills Development: To enhance the human capital focus will be on massive gender responsive skills training programmes targeting the rapid build-up of skills within this already available labour force that has acquired general education and those that have dropped out of school at primary, secondary and tertiary levels. The education curricula in the formal education system and the vocational training institutions will be redesigned to suit the current and future skills demands while making it more creative and innovative oriented.
iv) Social Development Sector: under this sector, emphasis will be on the following: i) Implementing a national programme for women economic empowerment; ii) strengthening Labour Market Information System (LMIS) and Employment Services; iii) promoting creative industries; iv) establishing and operationalize productivity centres at national and regional levels; and v) developing and implementing a programme to inculcate positive values and mindsets; to mention but a few.
f) Other sectors: All the other sectors will be expected to contribute to the implementation of the prioritised growth areas and they include; Water and Sanitation; Environment and Natural Resources; Trade, Industry and Cooperatives; Lands, Housing, and Urban Development; Economic and Financial Services; Information and Communication Technology; Justice, Law and Order Sector; Legislature and Accountability; Public Administration; Public Sector Management; Defence and Security. Other key areas addressed by the plan include; Sub-National Development; Greater Kampala Metropolitan Area; and Regional Equalization Programmes (in regions with higher poverty rates and poor socio-economic indicators).
5.0 NDPII CORE PROJECTS
To accelerate the realization of NDPII targets, Government will pay special attention to the implementation of a number of core public sector projects. The projects will be implemented taking into account the country’s debt sustainability, the absorptive and implementation capacity of the economy, and the commercial viability of projects. These will include;
Agriculture: Including;
1. Agriculture Cluster Development Project (ACDP)
2. Markets & Agriculture Trade Improvement Project (MATIP II) 3. Storage Infrastructure
5. Phosphate Industry in Tororo
Tourism Development
1. Tourism Marketing and Product Development Project (Namugongo, Kagulu Hills and Source of the Nile)
Minerals, Oil and Gas: Including;
1. Hoima Oil Refinery
2. Oil-related infrastructure projects (pipeline) 3. Albertine region airport
4. Albertine region roads
5. Development of Iron Ore and Steel Industry Infrastructure Development:
a) Energy: Including;
1. Karuma, Isimba & Ayago hydro power plants;
2 Industrial substations;
3. Grid Extension in North-East, Central, Lira and Buvuma Islands;
4. Masaka-Mbarara Transmission Line;
5. Kabale-Mirama Transmission Line;
b) Transport: Including;
1. Standard Gauge Railway;
2. The Entebbe Airport Rehabilitation;
3. Kampala-Jinja highway;
4. Kampala Southern by-pass;
5. Upgrading of Kapchorwa-Suam Road;
6. Kampala-Mpigi Expressway;
7. Rwekunye-Apac-Lira-Kitgum-Musingo Road;
Human Capital Development:
a) Health: Including;
1. Renovation of 25 Selected General Hospitals 2. Mass Treatment of Malaria for Prevention
b) Education and Sports: Including;
1. Comprehensive Skills Development Programme c) Social Development: Including;
1. Youth Livelihood Programme (YLP)
Economic Management and Accountability: Including;
1. Revitalisation of UDC and Recapitalisation of UDB ICT:
1. ICT National Backbone Project
6.0 MACRO-ECONOMIC AND FINANCING FRAMEWORK
The macroeconomic strategy for the NDPII is underpinned by the objective of maintaining macro-economic stability and the need to raise resources to address the infrastructure deficit. It outlines the sources of growth as well as the monetary and fiscal strategies needed to make the country competitive in the region and globally. The key elements of the Macro-economic Framework are presented below:
i) Growth will be driven by public and private investment and export growth, at an average growth rate of about 6.3 percent.
ii) Infrastructure spending will be the major driver for the fiscal deficit peaking at 7 percent of GDP by 2016/17 and 2017/18 and later consolidating to 4.2 percent in 2019/20 to prepare for the East African Community convergence criteria;
iii) There will be increased efforts in domestic revenue mobilization, particularly focusing on raising corporation tax revenues, widening the VAT coverage and improving efficiency of tax collection.
iv) Expenditures are expected to peak to about 22 percent of GDP in 2017/18 owing to infrastructure expenditure in the critical years of the NDPII.
v) External concessional and semi-concessional financing will remain the key sources for borrowing over the medium-term.
vi) Under the current macroeconomic framework, Uganda’s Public and Publicly Guaranteed (PPG) debt, which includes external and domestic debt, is sustainable as projected in both the medium term and long-term.
6.1 Financing
The Plan will be financed by both public and private resources, with about 57.8 percent being Government and 42.2 percent being private contributions. The overall cost of the NDPII is estimated at approximately UGX 196.7trillion, of which UGX 113.7 trillion is Government funding and UGX 83.0trillion is private sector contribution. Of the UGX 196.7trillion, UGX
22.1trillion is wage, UGX 32 trillion is non-wage and UGX 133.9 trillion is development. Public financing sources will include: Domestic revenues, External financing namely; budget support, concessional loans, semi-concessional borrowing, non-concessional borrowing and domestic financing. The non-public sources of financing will include; Public Private Partnerships (PPP), direct private sector investments and CSO contributions. However non-concessional financing will target projects with capacity to pay back.
7.0 IMPLEMENTATION STRATEGY
To address implementation bottlenecks, existing institutional implementation arrangements will be strengthened and reforms made. Some of the proposed reforms include;
i) A Delivery Unit will be established in Office of the Prime Minister (OPM) with a fully functional technical team to fast track implementation of the core projects, Presidential initiatives and key sector results (Big Results).
ii) All Accounting Officers at national and local government level will sign performance contracts in line with NDPII results and targets.
iii) The NPA will issue a Certificate of Compliance of MDA plans and budgets to NDPII before they are approved by Parliament.
iv) A national service programme will be established and institutionalised for building patriotism, inculcating national values and changing mind-sets towards improved service delivery.
v) As frontline service delivery units, LGs will be required to produce and implement development plans that are aligned to NDPII and SDP priorities. LGs will be allocated additional resources to implement programmes.
Ministry of Finance, Planning and Economic Development P.O. Box 8147
Kampala
March, 2015
