Investment Reforms key to Uganda’s Growth and Competitiveness
World Bank’s $100 million to support 1,000,000 people by increasing jobs, tourism and non-traditional exports
WASHINGTON, May 14, 2013 – The World Bank has approved $100 million for Uganda to improve its growth and competitiveness.
The International Development Association (IDA)* credit for Competitiveness and Enterprise Development Project (CEDP),
which was approved by the Bank’s Board of Executive Directors on May 9,
2013, will improve the competitiveness of enterprises in Uganda by
providing support for: (i) the implementation of business environment
reforms, including land administration reform; and (ii) the development
of priority productive and service sectors.
“Uganda has considerable potential to
achieve higher growth and create new jobs, but faces serious constraints
in access to land, licensing procedures and construction permits, which
significantly increase the cost of doing business,” says World Bank Country Manager for Uganda, Mr. Ahmadou Moustapha Ndiaye. “Through
this operation, the Bank will support reforms in priority sectors with
potential high rates of return to improve prospects for economic
transformation and structural change.”
The new project aims to reduce the burden of
businesses in dealing with registration and licensing procedures by
limiting the scope of application and streamlining the issuance
processes through the creation of a one-stop-shop for registration and
business licenses, which will also be accessible online.
Land administration reform has the potential
to transform Uganda’s economy by easing the presently cumbersome land
policies and weak land tenure security which frustrate investors. It
will also reduce inefficiencies in business registration and licensing
hence, facilitating flow of investments to high growth sectors,
including commercial agriculture.
Over the next five years, it will directly
benefit over one million people, create 75,000 new jobs in the tourism
sector and enable Uganda to increase the value of non-traditional
exports by 10 percent. It will also create initiatives for tourism
development and a matching grant facility for micro, small and medium
enterprises to procure business development services that will benefit
entrepreneurs in priority subsectors.
“Improving the legal, regulatory, and
supervisory environment will help to enhance the probability of long
term stability and growth of Uganda’s economy and ultimately make Uganda
more attractive to potential investors,” says Moses K. Kibirige, the Project’s Task Team Leader, “We
look forward to a speedy implementation of the new project that will
bring long-term economic and social benefits to the Ugandan people.”
The new initiative will scale up the gains
realized under the Second Private Sector Competitiveness Project, which
enabled the Ugandan authorities to digitize close to half a million land
titles and reduce the time taken to register transactions from 3 - 5
years to the current 3 – 21 days. A great deal more needs to be done
given that only 18 percent of Uganda’s land is registered, with
registration in rural areas as low as five percent, and land
administration is highly inefficient and susceptible to corruption.
Reducing investment risks for both investors
and local communities will create opportunities for MSMEs in
agriculture and private sector to access sustainable land market
development and open up significant opportunities for investment and job
creation. These enterprises are the major sources of employment in
Uganda but, majority of them face severe resource constraints, and
contribute modestly to economic growth and exports. Although wages are
low, productivity is even lower and, as a result, it is difficult for
firms to compete in regional and international markets.
About IDA
* The World Bank’s International Development
Association (IDA), established in 1960, helps the world’s poorest
countries by providing loans (called “credits”) and grants for projects
and programs that boost economic growth, reduce poverty, and improve
poor people’s lives. IDA is one of the largest sources of assistance for
the world’s 81 poorest countries, 39 of which are in Africa. Resources
from IDA bring positive change for 2.5 billion people living on less
than $2 a day. Since 1960, IDA has supported development work in 108
countries. Annual commitments have increased steadily and averaged about
$15 billion over the last three years, with about 50 percent of
commitments going to Africa.
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