Harnessing the Demographic Dividend Accelerating socioeconomic transformation in Uganda Presented by John Ssekamatte-Ssebuliba, PhD National Planning Authority

Outline Background to demographic dividend initiative in Uganda Objectives and process for conducting the Uganda demographic dividend study Key findings of the demographic dividend study Implications and policy options Next Steps

Uganda Vision 2040 “A transformed Ugandan society from a peasant to a modern and prosperous country within 30 years” with a per capita GDP of US9,500 by 2040. Vision 2040 recognizes Uganda’s rapid population growth, young age structure and consequent high child dependency burden among the threats to the achievement of socioeconomic development Vision 2040 pronounced “harnessing the demographic dividend” as one of the strategies for benefiting from the country’s abundant and youthful population

Background Uganda is a signatory to the September 2014 “Addis Ababa Declaration on Population and Development in Africa Beyond 2014” Endorsed the regional report “Harnessing the Demographic Dividend: The future we want for Africa”. To domesticate the Addis Ababa declaration and as part of the process of developing the 2nd National Development Plan, NPA and its partners commissioned the demographic dividend study to inform its strategic thinking and actions

Can Uganda emulate the economic miracle achieved by the Asian Tigers?

Can Uganda emulate the Malaysian development path? Indicator 1960 2010 Malaysia Uganda Per Capita GNP 299 62 8,754 506 Total Fertility Rate 6.0 7.1 2.0 6.2 Under five mortality (deaths/1000 births) 85 220 9 151 Net Secondary School Enrolment Rate (%) 35 10 96 23 Gross Tertiary Enrolment Rate (%) 4 0.54 37

Uganda Is Ripe To Initiate And Fast-track Its Demographic Dividend Journey Steady economic growth over the past decade (6.4%) Discovery of oil and other minerals development of economic infrastructure and increased foreign direct investment (FDI) Steady progress in reducing child mortality and increasing demand for family planning and smaller families Growing regional economic integration and emergence of non-traditional development partners National focus on addressing pervasive development bottlenecks from a long-term perspective Increased political stability and democratic culture

Study Objectives To review demographic and economic opportunities and challenges and assess their implications for attainment of Uganda Vision 2040 Assess prospects of harnessing the demographic dividend and its potential role towards attainment of Uganda Vision 2040 Demonstrate policy options for optimizing chances of earning the demographic dividend in Uganda

Study Approach Led by the National Planning Authority Consultative and inclusive Process Steering Committee comprising 10 institutions oversaw the project Broader stakeholder body comprising 40 institutions gave reality check and feedback Technical team of 7 experts conducted the analyses and wrote technical report Project was carried out between March and June 2014

Methodology Review of past and current economic and demographic opportunities and challenges Modeling of potential impact of the demographic dividend on socioeconomic development using the Future Group’s DemDiv modeling tool Done through a workshop involving all technical team members Determine key policy options for harnessing the demographic dividend

Modeling Policy Scenarios Key Characteristics Business as Usual Slow progress in economic reforms and demographic transition to continue Economic Emphasis Maximize Uganda’s global economic competitiveness to the levels envisaged in V2040 benchmark countries but no particular attention on population issues Economic Emphasis and Moderate FP and Education Maximize global economic competitiveness and improve investments in education and moderate investments to reduce fertility to the V2040 fertility target of 4 children per woman Combined Economic and FP/Education emphasis Simultaneous prioritization of economic reforms and family planning & education to the current levels of the V2040 benchmark countries on both

Business as Usual Scenario Status quo characterised by slow progress in economic reforms, human capital development and reduction in fertility to 2040. Targets for Economic and education indicators are higher than baseline indicators by 30% of the progress needed to attain the current average indicators for V2040 Benchmark countries Malaysia, South Korea, South Africa, and Mauritius FP to grow at an average 0.53 percentage points per year (achieved over the past decade)

Economic Emphasis Scenario Maximizes Uganda’s global economic competitiveness and productive efficiency, and governance as outlined in V2040. Target economic indicators for 2040 are average economic indicators for the four V2040 benchmark countries Education and family planning indicators held at the same level as the Business as usual scenario in order to examine the net effect of prioritizing economic reforms

Economic Emphasis & Moderate FP/Education Scenario The V2040 model that maximizes economic reforms to the Economic Emphasis scenario Targets for Education indicators are higher than baseline indicators by 50% of the progress needed to attain the average for V2040 benchmark countries. Contraceptive prevalence rate to increase to 45%, representing an average annual increase of 0.84 percentage points Education and Family Planning levels to produce the V2040 Total Fertility Rate target of 4 children per women

Combined Economic and Family Planning/Education Emphasis Scenario Simultaneous prioritization of economic reforms, education, health, family planning, and governance Economic and education indicators set at the same level as the average for the V2040 benchmark countries FP use to increase to 67.1% by 2040, (representing a 50% increase in the FP progress achieved between 2006 and 2011) Total fertility to reach 2.0 by 2040 (average for Asian Tigers)

Key Modeling Results

Projected growth in per capita GDP by policy scenario

Econ Emphasis & Moderate FP The Combined scenario presents the best case for Uganda to achieve V2040 goals Indicator Baseline Business as Usual Economic Emphasis Econ Emphasis & Moderate FP Combined Econ & FP Total Population (millions) 33 93 85 71 Total fertility Rate 6.2 4.8 4.0 2.2 Population <15 (%) 52 45 44 35 Dependency Ratio 1.1 0.9 0. 91 0.8 0.6 Per capita GDP (USD) 506 896 5,602 6,697 8,821

Policy Options For Harnessing The Demographic Dividend In Uganda

Accelerating fertility decline Reinforce political will and FP2020 commitments to in crease prioritization and investments in FP Enhance capacity of FP programmes to address all barriers of demand, access and use of FP among married and unmarried couples, and underserved populations (reduce high unmet need for FP) Strong facility and community based FP services Delay onset of child bearing by promoting school progression and access to FP by adolescents Reinforce interventions to reduce child mortality including immunizations, IMCI, nutrition, ITNs

Improving the health status of the population and labour force Increase budgetary allocations investments in health Address health workforce crisis and ensure commodity security and efficient health infrastructure Address cultural factors inhibiting demand and use of services Reinforce public-private partnerships in health care delivery Reinforce capacity to address pervasive diseases like HIV/AIDS and emerging ones like non-communicable diseases Support development of health information systems and use of data/evidence in decision-making

Fast-track education reforms to have skilled and innovative labour force Increase budgetary allocations to education to improve infrastructure, teaching materials, and hiring of teachers Strategic shift to universal secondary and higher education Address underlying causes of deteriorating quality of education at all three levels (primary, secondary and tertiary). Reform education curricula and teaching methods to focus on innovation, skills development, science and technology, and entrepreneurship. Address the huge geographical inequities in education coverage and gender differences at tertiary level.

Employment and Job Creation Issues Uganda has had sustained economic growth over the past decade but poverty levels have declined modestly Most people are under-employed, particularly women and youth Fastest growing sectors have low job multiplier effects and most jobs have been created in the low value informal sector High skill mismatch between what the market requires and what the education system produces Having a larger, healthier, and better-educated workforce will only bear economic fruit if the extra workers can find jobs While Uganda’s economy has grown significantly over recent years and will continue to do so into the future, this has not translated into better jobs The vast majority of Uganda’s labor force remains employed in subsistence agriculture and informal sector. The non-agricultural informal sector alone had 14.1 percent (2.1 million) To take advantage of the DD, Uganda will need to create good jobs at a fast rate to absorb the growing labor force.

Enhancing economic productivity and job creation Promote investment in industries that have strong job multiplier effects – build industrialization from the agricultural base through value-addition industries. Invest in development of economic infrastructure including energy, transportation, and communication Improve urban planning and provision of basic social services and stable livelihoods for the urban poor and enhance urban planning and development to attract foreign direct investment (FDI), which is key for job creation Attract more private investment into labor-intensive traded goods industries [tax regimes could provide positive incentives for employment-intensive enterprises] We need to mobilise political support for budgetary reform in the agriculture sector The traded goods sector is usually the source of much more rapid productivity growth than the non-traded goods sector and the growth of the traded goods sector is not constrained by the small size of the domestic market. road infrastructure to connect areas of production and areas of consumption

Enhance governance and accountability Reform macroeconomic policies and financial institutions to promote private savings and investment and attract FDI Effect industrial policies, strategies and interventions to promote growth of indigenous firms and entrepreneurship Adopt zero tolerance for corruption and institute strong accountability institutions to ensure that the law is enforced and those responsible for corruption held to account Strengthen governance and national security to optimize investor confidence Improve efficiency and accountability in delivery of public services by improving local technical capacity ineffective priority setting, resource allocation, program design, implementation and monitoring.

“YES, Uganda can harness a sizable demographic dividend that would be valuable in achieving the socioeconomic transformation envisaged in V2040 IF all development sectors join hands to walk the talk in investing in and implementing interventions in V2040 & this study”

Next Steps Produce advocacy materials from the technical report and other demographic dividend studies Engage Sectors for Sector Development Plans Conduct strategic advocacy, including during the 2014 FP Conference Ensure all sectoral teams working on the and national Development Plan are exposed to the DD evidence and they apply it in their planning Conduct further analyses to determine specific policy actions and update current analysis as new data, analytical tools and issues emerge

Acknowledgements National Planning Authority (NPA) United Nations Population Fund (UNFPA) Population Secretariat Uganda Bureau of Statistics (UBOS) Partners in Population and Development - Africa Regional Office African Institute for Development Policy (AFIDEP) USAID Health Policy Project, Futures Group School of Public Health, Makerere University Economic Policy Research Centre, Makerere University

For God and my Country