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Uganda
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Situation and Cooperation
The economic and social situation in Uganda has improved since the early 1990s. The government has been particularly successful in reducing poverty and cutting the rate of HIV infection. Since 1987 the country, with the support of the international community, has been working on an extensive poverty reduction programme. The number of poor people as a percentage of the total population has been halved, from 56 per cent in 1992 to approximately 25 per cent today.
However, women, country dwellers and people living in the crisis-torn north of the country are still facing severe poverty. Almost a third of the population has no access to safe drinking water, and average life expectancy is only 53 years. Uganda ranks 161st of the 187 countries in UNDP's Human Development Index (HDI 2011).
Although Uganda has already made some important development progress, further efforts are needed if it is to achieve the Millennium Development Goals. Shortcomings can be seen in particular in terms of ecological sustainability (MDG 7), reducing child mortality (MDG 4) and improving maternal health (MDG 5). The progress made hitherto has been diluted by the unabated growth in the population, which stands at 3.6 per cent per year.
Development constraints include a poorly developed financial sector, especially in rural areas, a low level of education, widespread corruption and a lack of infrastructure, for instance in the field of primary health care. Natural resources are threatened by overexploitation, especially as a result of deforestation.
Economic outlook
Around 80 per cent of the population are employed in agriculture. Since they produce largely to meet their own needs, agriculture generates only 23 per cent of the country's gross domestic product. Whilst the agricultural sector remains the country's largest foreign exchange earner, revenues fluctuate widely with world market prices. The main export product has traditionally been coffee; the second most important is fish from Lake Victoria. The country also exports tea, cotton and tobacco.
While the importance of agriculture continues to decline, other sectors of the economy have grown strongly in recent years, including the construction industry, the energy sector and services sector. Big changes are expected as a result of the recently started oil production in the west of the country. Uganda will for the first time join the ranks of the oil-producing states. The revenues make the country less dependent on external support. At the same time, the example of Nigeria and other African countries shows there are significant risks, especially an increase in corruption, distribution battles and environmental destruction.
Economic growth is stable, averaging about five to seven per cent. The productivity of the overall economy is nevertheless low and diversification is not far advanced. The prosperity gap between the north and the (richer) south is still tangible. One permanent problem is the country's landlocked situation and its dependence on the poor transport infrastructure in the region. Crises in neighbouring countries, such as Kenya in 2008, are detrimental to Uganda’s economic and social development as well.
HIV/AIDS
The HIV infection rate, which at the beginning of the 1990s stood at over 18 per cent of the sexually active population, had been significantly reduced by the turn of the century thanks to an extensive prevention programme implemented by the government. Recently, however, the number of new infections has risen again. According to UNAIDS, some 1.2 million people, or seven per cent of people over 15 years, are infected. Sixty-four thousand people died of AIDS in 2009 alone.
Democratisation
For a long time, Uganda's political structure was characterised by single party rule. In 2005, over 90 per cent of voters followed President Yoweri Museveni's proposal and backed the introduction of a multiparty system. Uganda thus took an important step towards democratisation. The country is regarded as an anchor of stability in a generally unstable region.
At the beginning of 2011, Museveni was re-elected for the fourth time. The opposition and international observers did not challenge the election result fundamentally, and it was recognised that progress had been made in terms of the preparation and conduct of elections. Democratic equality of opportunity was lacking, however, on account of numerous irregularities, the lack of independence of the electoral commission and the dominant role of the ruling party, the National Resistance Movement (NRM). There were demonstrations before and after the elections against administrative and democratic abuses. They were dispersed by the police with undue force.
However, there are some positive developments as well. For instance, the Ugandan Human Rights Commission is energetically performing its role as a control and complaint-processing instance for human rights violations. Despite inadequate resources, the judicial machinery is notable for its independent and courageous judgements, thereby strengthening the principle of the separation of powers. In addition, special chambers have been established to prosecute cases of corruption and war crimes. Basic rights such as press freedom and freedom of assembly are very largely assured, and the opposition is increasingly able to play an active role and shape public opinion.
Conflicts
Northern Uganda has seen two decades of bloody conflict between the Ugandan government and the Lord's Resistance Army (LRA). On account, inter alia, of the banning and rigorous pursuit of the LRA by the Government of Uganda, fighting has now shifted to the neighbouring Democratic Republic of the Congo, the Central African Republic and South Sudan. As calm returned to northern Uganda, former inhabitants who had fled the LRA started returning in droves. The majority of people have now returned to their homes.
The international development partners are helping the Government of Uganda to implement the Peace, Reconstruction and Development Plan (PRDP), which initially runs from mid-2009 to mid-2012. So far some 400 boreholes have been drilled to obtain water, more than 500 classrooms built and 1,000 kilometres of new roads built, among other achievements. Germany is also making an important contribution by advising the Office of the Prime Minister on the coordination of the reconstruction effort.
Development potential
Uganda is highly regarded in the international community. In 2009 and 2010, the country had a seat on the UN Security Council where it took a stance on peace, security and development issues constructively and in a spirit commitment. Uganda is involved in several international peacekeeping missions, including in Côte d'Ivoire, Liberia, Sudan and Timor-Leste. A major and domestically controversial challenge is the country's engagement in Somalia, where Uganda commands the African Union peacekeeping mission (AMISOM) and provides the largest contingent of troops. The direct consequences of the deployment now go beyond the losses in the armed forces: in July 2010, almost 80 people were killed in bomb attacks in the capital Kampala. The attack is attributed to the Somali Islamist terrorist group Al Shabaab.
Pan African and East African integration are cornerstones of Uganda's foreign policy. Relations with the neighbouring Democratic Republic of the Congo and Rwanda, which for a long time were plagued by armed conflict and mutual mistrust, have improved significantly. For example, Uganda supported the accession, on 1 July 2007, of Rwanda and Burundi to the East African Community (EAC). Uganda is considered to be a driving force behind the expansion of the EAC beyond a common market to a monetary, and subsequently political, union. Relations with the new state of South Sudan are also close and partnership-based.
In April 2004, Uganda, Kenya and Tanzania signed an agreement creating a customs union within the East African Community. An implementation timetable was agreed in early 2006. It is hoped that the common market will increase the sale of Ugandan products. However, this requires further diversification of the country's economy. Exports could be boosted for example by improving the marketing of products such as honey, vanilla and cut flowers. The prospects for the services sector (telecommunications, banking, tourism) are good, as well as for the construction industry, which benefits from infrastructure projects. Oil production will further strengthen the economic position of Uganda as a regional power.
It is hoped that the systematic continuation of Uganda's poverty reduction policy will improve the general conditions for sustainable growth. Measures such as the abolition of primary school fees have already significantly improved the level of education. Ugandan civil society is actively involved in the democratisation process, and has great potential for self-help.
Priority areas of German development cooperation
Development cooperation between Uganda and Germany resumed in 1986. At the government negotiations in May 2010, 120 million euros was pledged for the period 2010 to 2012, 100 million euros for Financial Cooperation and 20 million euros for Technical Cooperation.
The focus of Ugandan-German development cooperation is in line with Uganda's Poverty Eradication Action Plan (PEAP) and is integral to the 2003 Uganda Joint Assistance Strategy (UJAS). One important goal of the UJAS is to enhance the effectiveness and efficiency of cooperation and boost Ugandan ownership by consistently setting priorities and ensuring work-sharing between donors.
The following priority areas of cooperation have been agreed between Germany and Uganda:
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Water supply and sanitation
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Financial sector development
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Renewable energies and energy efficiency.
In addition, the Federal Government provides general budget support. In close collaboration with the Government of Uganda, bilateral donors, the World Bank and EU Commission, supporting measures, for example to tackle corruption and improve the tax system, are also implemented. German experts are also advising the Office of the Prime Minister in the coordination and implementation of the Peace, Reconstruction and Development Plan (PRDP) for northern Uganda. In order to formalise and systematise human rights protection in Uganda, German development cooperation is assisting government agencies in the prosecution of human rights abuses and strengthening the dialogue with civil society, for example through the training of journalists.
Urban water supply and sanitation
Improving urban water supply and sanitation has for many years been a priority area of the German engagement in Uganda, and this support is gradually paying off. In the last two decades the proportion of city-dwellers with access to safe drinking water has increased from 78 to 91 per cent. Further investments are necessary, however, because so far are only 38 per cent of people in urban areas are connected to a well functioning sewage system. Access to water and sanitation systems is, however, crucially important if the health status of the population is to be improved, broad-based economic growth achieved and poverty reduced in the long term.
This unsatisfactory state of affairs is principally attributable to a dilapidated infrastructure, the low solvency of poorer sections of the population, rapid demographic growth especially in peri-urban areas, shortcomings in utility management and a lack of political pressure. The German contribution focuses on advising the Government of Uganda and on renewing obsolescent plant and expanding the distribution network in selected towns and cities in line with demand. The national water utility is receiving support to help it improve the services its delivers and to allow it to operate more efficiently. Decentralised operators and local authorities are being helped to connect up more households to the water supply and sanitation systems.
Financial sector development
Small and medium-sized enterprises are a key factor in the economic development of Uganda. However, they rarely have access to loans or other financial services, especially in rural areas. Ugandan-German development cooperation is improving the general conditions for such enterprises by providing advice to the financial sector and cooperating closely with the Bank of Uganda. In addition to the introduction of non-cash electronic financial transactions, support was provided for the establishment of a national credit information system, which will make possible improved risk management in the lending sector. Data for more than 400,000 persons have been entered into the system since 2008. The provision of advice and training in the area of banking supervision and with regard to the development of the capital market has already helped improve the situation of the banking sector and of customers and consumers.
Small and micro-entrepreneurs are the main beneficiaries of cooperation in the field of microfinance. The German commitment is a crucial contribution towards enabling more people in future to gain access to financial services. The savings volume of microfinance institutions has increased by around 75 per cent in five years. With German support, the legal and institutional fundamentals will be put in place to expand further the availability of microcredit for private households, and small and microenterprises, especially in rural areas. Other important areas include improving basic financial education and consumer protection, in order to encourage economic self-determination. In this way, German involvement is contributing directly to Uganda’s poverty eradication strategy.
Renewable energies and energy efficiency
Uganda suffers from a permanent energy crisis because the existing power stations cannot produce enough electricity to meet demand. Only about 10 per cent of the population has access to electricity – in some regions considerably less. Economic development is being severely held back by the supply shortages. More than 90 per cent of households in Uganda obtain energy for cooking and heating from burning biomass (wood, charcoal, straw), with adverse effects for the environment and human health.
Germany is helping Uganda to develop renewable energies on a sustainable basis, supporting actions designed to raise energy efficiency and with electrification in rural areas. The projects of German development cooperation are already providing 700,000 people with electricity. Moreover, thanks to German support, 650,000 households and countless public establishments are using energy-efficient stoves. The huge saving in firewood - over 700,000 tons - not only helps to protect the environment, it also reduces the incidence of respiratory diseases due to harmful fumes.
In the north of the country, where the infrastructure has been destroyed by years of fighting, small, decentralised hydropower stations are being promoted. Financial support is also being provided for the power station on the Bujagali Falls on the Nile. Under Technical Cooperation, Germany is helping the Ministry of Energy to put in place an enabling environment and step up the use of renewable energies in industry, transport and other sectors. Support is also being provided to associations, companies and NGOs in the use and dissemination of sustainable energy solutions.
Information
Publications
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Water Sector Strategy
Strategies 152
(PDF 872 KB, accessible) -
In partnership for a strong Africa: Cooperation in the field of sustainable economic development
Topics 167
(PDF 2.4 MB, accessible) -
Promoting Health – Fighting HIV/AIDS
Topics 178
(PDF 815 KB, accessible) -
In partnership for a strong Africa: Cooperation in the area of good governance
Topics 165
(PDF 2.5 MB, accessible) -
Sustainable Energy for Development
Strategies 154
(PDF 549 KB, accessible) -
In partnership for a strong Africa: Cooperation in the water sector
Topics 166
(PDF 3.4 MB, accessible)
