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Agro-Industries and Clean Energy (AGRICEN) Country Scoping Study – Uganda"

Compiled by

AFREPREN/FWD


Introduction

Uganda has one of the youngest and most rapidly growing population in the world. Half the population is younger than 15. According to the 2014 National Consensus, only 7.4% of the population resides in urban areas. Three-quarters of the population depend primarily on the agricultural sector, which contributes to about 25% of the total value of the gross domestic product (GDP) (World Bank 2016). Agriculture contributes nearly 50% of the total foreign earnings from the export of commodities such as coffee, tea, maize and fish. However, agriculture is also still characterized by low productivity, mainly due to poor inputs, underdeveloped value chains, and low public and private investment in the sector.

Since the late 1980s, the Government has led a sustained period of growth. From 2001 to 2016, the average annual growth was 4.5%, a decline compared to the 7% achieved during the 1990s. During the 1990s, follwing the end of the political and instability and civil war, growth was driven by post war recovery and reconstruction as well as comprehensive macroeconomic and structural reform (Ssewanyana, undated). According to the World Bank the slowdown is attributed to adverse weather that impacted agricultural productivity, a growing youth population and increasing unemployment, private sector credit constraints, and poor execution of public projects (World Bank, 2017). The industrial sector is dominated by small and medium scale manufacturers involved in the production of processed foods, beverages, wood and wood products, leather goods, textiles and garment apparels. In the mid 2000s, Uganda discovered economically viable oil and gas reserves in the Albertine Graben. Once production starts, the oil sector is expected to become the largest contributor to the government revenue and key to transforming Uganda into a middle-income country by 2030.

Uganda is a presidential republic, and the political system is a democratic parliamentary. The country is divided into districts that are grouped into four administrative regions – Northern, Eastern, Central and Western. Currently there are 121 districts. Each district is further divided into counties, sub-counties, parishes and villages. Since the 1980s, when the National Resistance Movement (NRM) led by President Yoweri Museveni came to power, the number of districts, has increased from 33 to 81 in 2008, and 121 in 2016. The justification for this gradual increase has been to promote effective service delivery and increase political participation among citizens. Some note that this proliferation of new districts has to do with central Government inability to resist local demands for creation of more districts (Rubongoya, 2007), while others observe it is a political strategy and means of dispensing patronage (Oloka-Onyango 2007) where direct benefits to a few local politicians reinforces central government’s political influence.

Following years of civil war that was characterized by elites’ failure to reach agreement over the basic institutional arrangements for the organization of power, the NRM came to power in 1986 (Hickey, 2013). Under the NRM and with President Museveni at the center three types of coalitions shaped the governance structure – a nepotistic inner core, a wider circle of co- opted elites, and a network of grassroots supporters (Tripp, 2010). Since the 1990s, five elections were held in Uganda and the NRM has won them all. Rent-seeking is said to be widespread, stretching from the central government to local authorities, permeating the public service, businesses and politics. The biggest source of rents are government contracts for the supply of goods and services. The administration government has built and strengthened its alliance with the business community during the liberalisaiton of the economy that saw the privatisation of state-owned enterprises.

The economic reform of the 1990s, which resulted the privatisation of public enterprises, saw the transfer of assets to individuals with connections in high places (Mwenda and Tangri, 2005; Tripp, 2010). The process, which is described as collusive rather than productive, also saw the forging of alliances between politicians and members of the business community in pursuit of individual interests (Mwenda and Tangri, 2005). Since then, some of these close state–business relationships have been instrumental to funding political campaigns and activities, including grassroots mobilisation (Mwenda and Tangri, 2005). Subsequently, highly personalised politics combined with increasingly competitive elections where the winner must out-bid rivals through exchange of favours has been weakening institutions ability to govern in Uganda. At the local level, populist approach to rent-sharing and constituency building is also said to have further hollowed out institutions of any real decision-making powers. Overall, the growing influence of entrenched interest groups combined with some governance aspects1 and weakening of institutions has a debilitating effect on the autonomy of public officials to implement and enforce policies or regulations (Gore, 2017).

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