National Perspective on How to Integrate Transport Infrastructure in Development Strategies UGANDA Mrs. Rosetti Nabbumba Nayenga Policy Analyst Poverty Monitoring and Analysis Unit Ministry of Finance, Planning and Economic Development Uganda

2 Uganda Policy issues in OECD paper highly relevant Low income: per capita income US$ 324 Landlocked 80% depend on agriculture in rural areas Poverty eradication is the central objective 3rd fastest population growth rate in world – pressure on infrastructure and services

3 Uganda’s population continues to grow rapidly…

4 The Economy Growth rate averaging 6% pa in 1990s; now slowing down to 5.6% p.a; Population below poverty line declined from 56% in 1992 to 34% in 2000; rose to 38% in Low revenue to GDP ratio at 12.6% Large aid inflows channeled mainly to the social sectors. Expansion in social service provision

5 Emerging policy concerns Structure reforms are complete – enhancing growth, reducing poverty further and achieving some of the MDGs will be more difficult. Social sectors alone cannot lead to poverty reduction. Increased investments are needed in the productive sectors that support agriculture and rural development and private sector development. Inadequate infrastructure – transport, energy, telecommunications - 3 rd priority constraint to private investment in Uganda.

6 Transport infrastructure Roads: most dominant transport mode 80% of national roads, 60% of district roads and 20% of urban roads have been rehabilitated. Community access roads in poor state Maintenance backlog – 18% of entire network in poor condition; 62% in warning condition.

7 Transport infrastructure Railways: Very old lines; only 260km of 1,350km is operational. Substantial investments needed. Joint Concession initiated. Water Transport: Under-developed sector. Poor enforcement of regulations.

8 Transport infrastructure Air transport: responsible for export of perishable products; tourism; delivery of relief Increase in cargo volumes in recent years Less competitive due to high cost of aviation fuel; limited storage facilities; inefficient airport handling, high indebtness and outdated regulations.

9 The challenge The demand to reform institutions and regulations and invest in all 4 modes of transport is enormous. The national resource envelop is not expanding. Uganda has just entered multiparty democracy – balancing political and economic aspirations is a challenge. The plus – transport infrastructure is a priority both under the political strategy as well as the poverty reduction strategy.

10 Integrating transport infrastructure into development strategy All public expenditures are guided by the PEAP/PRSP. Transport infrastructure concerns have been integrated into the PRSP in a phased manner depending on the economic objectives and desired outcomes of Uganda.

11 PEAP/PRSP 1997 Main obj: To reduce mass poverty in rural areas. –Rural roads prioritized - opening villages, improving prices and access to markets, social services, extension…. –10 year RSDP (1996/ /06 at US$1.5 billion). –Road Agency Formation Unit formed to strengthen road management capability.

12 PEAP/PSRP 2000 Main obj: Enhance growth, structural transformation, incomes and private sector development. –More infrastructure needed by private sector –Emphasis still on roads, but with some investments in water and rail transport. –RDSPII (2001/ /11 at US $ 2.3 billion) –Involvement of private sector in maintenance and financing air, water and railway transport infrastructure promoted.

13 PEAP/PRSP 2004 Main obj: increase rural incomes, enhance human development, more manufacturing and trade, export… –Emphasis is on all 4 modes of transport –Roads key to market integration; railway for moving bulky goods; air transport for perishable exports and water transport for linking communities to growth centres. –Promotion of public-private partnerships.

14 Key issues in moving forward Financing for road sector mainly from donors; other modes of transport under-financed. Public private partnerships not easily forthcoming due to low returns, poor regulatory environment and disincentives. Ways are being explored to step up public resources to transport infrastructure within the LTEF. Not easy because of recent political pronouncements – education, health, security.

15 Long-term Expenditure Framework (Provisional sector shares in Shs billions) Sector2003/042013/14 Security336 (10.4%)674 (9.2%) Roads and Works303 (9.4%)915 (12.4%) Agriculture97 (3.0%)326 (4.4%) Education575 (17.8%)1474 (20%) Health375 (11.6%)1169 (15.9%) Water89 (2.7%)327 (4.4%) Public Administrati382 (11.9%)273 (3.7%) Source: PEAP, 2004.

16 Moving forward 15 year multi-modal transport master plan for all 4 modes of transport. Restructuring of the institutional and regulatory framework to suit current needs and partnerships. Road Fund to be established to cater for road maintenance Harnessing resources from regional transport initiatives

17 Lessons 1.National planning and budgeting framework useful entry point for integrating investment needs for transport infrastructure. All development partners need to work within this framework, with Government leading. 2.Public private partnerships should be nurtured. But they work best where other infrastructures and services exist – energy, water, telcom. A holistic approach to infrastructure devt needed.

18 Lessons 3.Budget discipline essential 4.Rethinking transport infrastructure needs in urban areas 5.Community involvement – labor intensive works 6.More focus on quality issues – efficiency, reliability, usability – rather than infrastructure expansion

19 Lessons 7.Transport infrastructure should be handled with transport services 8.Promoting long-term planning in transport infrastructure development could help in addressing the sustainability concerns. 9.Politics matters 10.Regional projects critical for enhancing connectivity between African countries. …….. Thanks for listening to me ………