Infrastructure is key to growth

What should Uganda do about infrastructural development and its sustainability? Uganda has recently embarked on a move to work on structural constraints that have kept its citizenry in abject poverty for years. This despite the several initiatives that government have adopted to counteract the challenges. This have seen various interventions in key sectors such as energy, transport and communication, among others.

Key among these projects include the Shs41.1 billion Nile cable-stayed bridge, the Karuma hydro power plant, the Entebbe Expressway, and the recently launched Kampala flyover to mention but a few. In its national Budget for the last three financial years, the government has placed emphasis on these sectors. In fact, the key development document, ie the Second National Development Plan (NDPII) and Uganda Vision 2040 clearly specify that in the short and medium-terms, these sectors are prioritised.

It should also be noted that the country aspires to reach middle-income status in 2020. According to the World Bank, a middle-income country is one with annual per capita income ranging between $1,025 and $12,615. However, Uganda’s per capita income is still at $604.04 as per the 2017 World Bank’s record.

Uganda’s target is, however, to attain lower middle-income status with an annual per capita income of $1,033, according to the NDPII. This means all Ugandans, including children, the elderly or any other non-working class citizen, on average should each be earning at least $1,033 (Shs3.5 million) annually and $86 (Shs290,000) monthly. This broader aspiration requires a well organised economy with almost all sectors massively working interdependently to leverage one another’s economic advantages through well-streamlined and planned linkages.

Given the fact that the majority of Ugandans engage in agriculture as the main economic activity, emphasis on transport infrastructure is key to connecting farmers to viable markets as well as reducing the cost of transport to connect farm produce to markets. Electricity or power supply, on the other hand, is key especially to transforming farm produce into valuable products that can command a significant market. In addition, its availability, especially at reduced costs, encourages the establishment of industries that can absorb the increasing number of unemployed and underemployed Ugandans, especially the youth, who complete their studies but don not a clearly define life path after education.

Good infrastructure, a skilled work force and an enabling business environment, are the ingredients for Uganda to benefit from opportunities such as East African integration and, ultimately, achieve high rates of growth. Infrastructure powers businesses, connects workers to their jobs, and creates opportunities for citizens. A healthy economy needs reliable infrastructure to strengthen the supply chain both domestically and across borders.

However, although infrastructure is key, caution needs to be taken regarding who finances it and the cost implications. Where loans/public debt are secured for infrastructure development, we should ensure that these investments yield significant returns.
Richard Ssempala,
[email protected]