Uganda economic update : ninth edition - infrastructure finance deficit : can public-private-partnerships fill the gap?

As a result of a number of internal and external shocks, Uganda’s economy is currently growing at the lowest rate recorded over the past two decades. During the first half of FY 2016-17, the economy grew at the annualized rate of 2.6 percent, considerably lower than the long-term average rate recorded over the past two decades, which stands at around seven percent. The decline over the past five years is related partly to the increasingly volatile external environment and partly to domestic policyresponses to shocks and strains related to the ongoing impact of the drought on agriculture, the civil strife in South Sudan, and the upheavals in the banking system. Therefore, current policy is focused on the management of these impacts so that they do not exacerbate macroeconomic instability and on measures to stimulate the economy to increase growth. The Government remains strongly committed to an investment push to accelerate and sustain high levels of economic growth and to facilitate socio- economic transformation. The Government’s investment push is intended to address binding constraints on growth, with the most significant of these constraints being Uganda’s huge infrastructure deficit. The first part of the Ninth Uganda Economic Update presents an assessment of the current state of the economy, while the second part addresses a specific theme related to Uganda’s development challenges and the manner in which these may be addressed. This focusses on how the management of PPPs can support Uganda’s investment push by facilitating access to private sector financing, by managing the risks intrinsic in these arrangements, and by maximizing the economic and social value of these partnerships. This can only be achieved if the Government is committed to building the appropriate set of frameworks to create a conducive environment for private investments and to adopting robust project identification, screening, procurement and contract managementprocesses.