The Third National Development Plan (NDPIII) aims at harnessing both government and private sector strengths, in a mixed economy approach, to grow Uganda’s real economy. This is going to be done through domestic production of goods and services of at least the necessities of livelihood; food, clothing, shelter, medicines, security, infrastructure, health, education and services.
NDPIII has five Strategic Objectives. In pursuit of the industrialisation agenda, the NDPIII’s objectives are based on the country’s comparative advantages that lie in its abundant natural resources and young population, the achievements registered so far from investments in productive infrastructure as well as the partnerships forged between the public and private sectors.
These objectives meet the purpose of accelerating economic growth, transforming people’s lives and strengthening the country’s regional and international competitiveness.
The five objectives are:
- Enhance value addition in key growth opportunities;
- (ii) Strengthen the private sector’s capacity to drive growth and create jobs;
- Consolidate and increase the stock and quality of productive infrastructure;
- Enhance the productivity and social wellbeing of the population; and
- Strengthen the role of the state in guiding and facilitating development.
President Museveni in his foreword states that NDPIII strategizes how Uganda will harness its abundant factors of production, through a knowledge-based economy of science, technology, and innovation, to improve the livelihood of its citizens.
The head of state also says that Export promotion and import replacement will be strategies to ensure production for domestic, regional and international markets.
“The role of both the public and private sectors will be strengthened in delivering services to the people and creating gainful jobs. Uganda is gifted with a youthful population, and my Government is partnering with the private sector to provide pathways to positively harnessing the dynamism and energies that young people have and creating opportunities to earn livelihoods and support nation-building.”
“NDPIII comes at a crucial time in our country’s history when the country, and indeed the world at large, is confronted with the COVID–19 pandemic and other disasters. Our resolve and determination to rise above this, and focus on our vision to building a modern, people-centered, independent, integrated, resilient and self-sustaining economy, is at the centre of this NDPIII,” notes President Museveni in the prelude.
Noting that now more than ever, Uganda Vision 2040, EAC Vision 2050 and Africa Agenda 2063 as well as the Sustainable Development Goals (SDGs) must be accelerated by taking full advantage of the opportunities that our beloved country has been availed with.
Towards this, the NDPIII aims at increasing household incomes and improving the quality of life of Ugandans through sustainable industrialization for inclusive growth, employment and sustainable wealth creation.
Another area of focus is sustainable industrialisation is being pursued to increase the country’s resilience, transform the lives of the people through better incomes and gainful jobs, and strengthen the country’s regional and international competitiveness.
Uganda is well-endowed with abundant natural resources, and a major thrust of the third National Development Plan is how to harness and sustainably use the country’s natural resources for socio-economic development for the benefit of current and future generations of Ugandans.
This National Planning Authority (NPA) document also spells states in the 4.5.14 section of its 48 pages that focuses on enhancing skills and vocational development.
“Government will prioritise skills and vocational development to address unemployment, especially among the youth. This will be informed by the skills projections in the national and sectoral human resource plans done through undertaking quick skills mapping with emerging or anticipated job opportunities in the economy,” reads an excerpt from the Third National Development Plan publication from paragraph 106.
Another focus point is to promote science, technology, engineering and innovation as well as ICT.
In a bid to achieve this, the Government will prioritize the strengthening of the legal framework around innovation to increase technology adaption and diffusion. In addition, the Government will strengthen the framework and mechanisms for guiding and coordinating research, innovation, and development of appropriate technology.
Efforts to institutionalize infrastructure maintenance are spelt out in section 4.5.8 which states that Infrastructure efficiency and its lifetime are limited due to several factors, one of which is the lack of a maintenance culture.
Under this strategy, the focus will be on prioritizing regularly scheduled maintenance of transport infrastructure to increase lifetime through, for instance, building the local construction industry’s capacity and establishing local hire pools. The youth will be encouraged to form hire pools and will be given special consideration in the award of contracts.
In this five-year development plan, the Government will continue to support and strengthen the private sector as the main engine for growth, job creation and increased household income. The Government will continue to address the challenges constraining private sector growth, including slow bureaucratic decision-making by the public service, corruption, case backlog in the judiciary, and inadequate access to patient capital.
The Government pledges to provide a suitable fiscal, monetary and regulatory environment for the private sector to invest.
As a way of harnessing the country’s tourism potential, despite the shocks and vulnerability, the Government will continue promoting tourism as a foreign exchange earner and employer, providing an opportunity for many Ugandans to earn a living at the various levels of the tourism value chain.
In export promotion, an export-oriented strategy is important as a means to increase Uganda’s foreign exchange earnings which will play a significant role in financing development projects and repaying external debts. Thus, an export-oriented strategy will seek to increase the value and volume of manufactured food products processed from agricultural commodities such as; textiles, cement, steel, soft drinks and processed minerals and oil.
Some key markets such as the Middle East and EAC, COMESA and AfCFTA will be given priority to boost the country’s income.
A case in point is the EAC which is a key market because of its proximity and the market access requirements (phytosanitary) are similar to Uganda’s hence user specifications require little or no modification. It is a prime market for building materials (cement, steel, tiles and plastics); fast-moving consumer goods (sugar, dairy products, cooking oil, soap, and kitchen ware); as well as cereals and grains. In addition, it provides preferential access to Uganda’s products through targeted negotiated trade agreements.
“Middle East is a stable and dependable market for the export of livestock and its products (beef, goat, dairy and poultry); as well as fruits and vegetables (pineapples, apple bananas, and avocadoes). The proximity of this market together with the market access requirements that are not as stringent as the European market makes it easier to secure and sustain. However, there is no negotiated bilateral trade agreement with this market, and Ugandan exporters have not been able to consistently supply the goods in required quantities at specified times,” notes NPA in this multi-page publication.
Another key market is China which is a crucial market because it is very big and growing.
China is suitable for the export of poultry, beef, dairy, fish and its products, hides and skins (wet blue), cow horns, processed coffee, semi-processed cotton, sesame, and cocoa.
There is increasing bilateral cooperation with China and it is Uganda’s biggest import market. Uganda’s limited exports to this market, therefore, contribute significantly to the country’s negative trade balance. China has offered Uganda unilateral duty-free and quota-free access for over 3,000 commodities which are, however, limited by Technical Barriers to Trade (TBT) e.g. quality standards and tariffs on processed goods.
Area-based commodity planning is also taking centre stage in this third national development plan.
“Using the experience of success obtained from Kalangala, Ankole, Kigezi and Toro in the commercial production of vegetable oil, dairy and tea (respectively); the Area-Based Commodity Planning approach will be utilised to replicate this success,” reads an extract from the half-decade plan that stretches from financial years 2020 to 2025.
Using this approach, districts are to be clustered into nine agroecological zones and will be supported to maximise value addition in the selected commodities.
A value chain has been developed for each selected commodity and used to critically analyse the bottlenecks constraining increased production/productivity and wealth creation.
Projects will then be developed to address the identified bottlenecks. In addition, Government will strengthen its presence and service delivery capacity at both the sub-county and parish levels. The sub-county will be the unit of development planning, with the parish as the unit at which farmers will be organized and supported to increase production/productivity, bulk and market agricultural produce and for data-collection.
“Parishes will be used as the centres for delivery of production, marketing and financial services to farmers. The parish chief will also be the focal person in coordinating supervision of agricultural extension, primary education and health service delivery,” the Planning Authority elaborates in detail.
Fast-tracking oil, gas and mineral-based industrialisation
This plan has prioritised the fast-tracking of interventions aimed at facilitating the production and processing of oil/gas as well as mining, beneficiation and manufacturing based on seven minerals, namely, iron ore, phosphates, copper, marble/limestone, gold, dimension stones, and sand/aggregates.
According to NPA, these have been chosen based on the fact that they exist in large enough quantities to enable commercial exploitation as well as their potential to impact the industrialization process.
Boosting Agro-based Industrialization
Agro-processing occupies a very important place in the agricultural value chain, creating backwards and forward linkages between the farm and the market.
The plan stipulates that to achieve the strategic objectives and deliver envisaged results, the Third National Development Plan adopts 21 development strategies some of which include Agro-industrialisation.
“The backward and forward linkages between the agricultural, industrial and service sectors through agro-industrialization will stabilize and increase demand for raw agricultural commodities, increase prices, and stimulate increased production/productivity through increased use of improved inputs, increased agricultural research and reduced postharvest losses.”
One of the programme-based approaches is to strengthen the alignment of plans, budgets, and implementation at the macro, sector and local government levels; the government will introduce the programme-based approach to planning. Within the context of this, a Plan, a programme is a group of related interventions/projects that are intended to achieve a common objective within a specified timeframe. The programme approach has been adopted for three main reasons:
- To focus implementation on delivery of common results. Achievement of results specified in these development frameworks does not neatly fall within any particular sector;
- To strengthen alignment and eliminate the ‘silo’ approach to service delivery and enhance synergies across sectors and other actors;
- To provide a framework for the already existing programme-based budgeting.
Page 41 of the plan spells out that; using this approach, national programmes have been designed to provide the framework for budgeting and implementation of activities that will deliver the specified results.
These programmes have been developed using the value chain approach to ensure all interventions targeting the bottlenecks at the different stages of the value chain as well as the relevant stakeholders are identified. In addition, this approach will improve the linkage between the national results framework as outlined in the Third National Development Plan and the annual plans/budgets (for sectors and MDAs) that provide the conduit for implementation.
Under this plan, the Government will play a more definitive role in addressing the challenges that are manifest due to the failure or absence of incentives to enable the market to operate efficiently. In other words, the state will play a developmental role to achieve Vision 2040 and not simply rely on market mechanisms, particularly where they are failing.