UGANDA

UGANDA
Attachment I. Memorandum of Economic and Financial Policies
INTRODUCTION
1. This Memorandum of Economic and Financial Policies complements the agreed policies
under the 2013, 2014, 2015 and May 2016 Memoranda of Economic and Financial Policies under
Uganda’s Policy Support Instrument (PSI). It presents an update on the economic performance in
FY2015/16 and preliminary outturns for the first quarter of FY2016/17. Looking ahead, the
memorandum describes the macroeconomic policies and structural reforms the Government of
Uganda will pursue over the remainder of FY2016/17. The memorandum proposes extension of
quantitative targets, structural benchmarks, and other reform commitments through to end-
June 2017.
RECENT DEVELOPMENTS
2. Following the February 18, 2016 Presidential and Parliamentary elections, President
Museveni was sworn in, and the new Parliament and Cabinet took office in June.
The government’s overarching objective is to achieve middle income status by 2020. To this end,
over the medium term, we will continue to focus on the following priorities:
i) Increasing production and productivity in the primary growth sectors of the
economy, including agriculture, tourism, oil, gas and minerals;
ii) Supporting private sector development for sustainable employment and economic
growth;
iii) Enhancing infrastructure development to provide affordable power and lower
transportation costs for value addition and enhanced market access;
iv)
Enhancing economic management and domestic resource mobilization;
v) Improving public service delivery; and
vi)
Improving efficiency in government operations.
3. Growth was 4.8 percent in FY2015/16, slightly below the 5 percent achieved in the
previous fiscal year. The growth recorded was held back by the difficult global environment
(including the slowdown in China and Brexit) and complex geo-political conditions (impact of the
situation in South Sudan); lower commodity prices; a deceleration in the execution of public
infrastructure investments; a decline in private sector credit; and election and post-election
related uncertainty. The key sectors that contributed to growth include services (especially the
information and communication services), agriculture, and construction, while manufacturing
experienced a notable slowdown.
4. Construction of the key infrastructure projects, including the Karuma and Isimba hydropower
projects and the Kampala-Entebbe Express Highway, is already underway. However, there
were some supervision challenges with the Karuma construction during the year which resulted in
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