Economic Policy Paper Series

Delivering Industrialisation

Economic transformation is necessary for sustained growth in output, decent jobs, incomes, and social development. The macroeconomic stability over the last three decades unlocked an episode of moderate to high GDP growth coupled with promising signs of early economic transformation, including export growth and diversification. However, progress against each economic transformation metric eventually stalled. Combined with rapid population growth, this has translated into large-scale underemployment, stagnating incomes for most citizens, and rising poverty. Faced with a rapidly growing, urbanising, and increasingly educated and connected youth population as well as growing discontent in cities, the political legitimacy of Uganda’s leadership will increasingly depend not only on peace and stability, but also on the promise of decent jobs and incomes.

In Brief

  • Economic transformation in Uganda has stalled and must be revived - the wellbeing of the population and the legitimacy of the leadership depend on it.
  • Industrial policy which has been at the heart of virtually all economic transformation success stories - is coming into favour with Uganda’s political elite.
  • Industrial policy cannot succeed without highly effective implementation mechanisms.
  • Effective industrial policy delivery requires significant political, financial, and technical resources.
  • The Government of Uganda faces serious scarcity on all three fronts.
  • This is manifested in current implementation weaknesses witnessed in the domain of industrialization.
  • But all countries start from a position of scarcity. The experience of several economic transformation success stories shows that it is possible to create self-perpetuating momentum and positive feedback loops by kick-starting the economic transformation process in small pockets.
  • Outside of the domain of industrialization, Uganda has a track record of creating pockets of efficiency to drive priority public sector progress.
  • Uganda’s industrial policy pocket of efficiency should take the form of a Delivery Unit. Other options – a super-ministry, a board or council, and sector development agencies – are either insufficient or premature.
  • Important lessons can be learned from the experience of Delivery Units around the world, especially in the past 20 years. Central to the success of Delivery Units are four Strategic Enablers (political authority, capacity, accountability, institutionalising delivery) and three Functions (prioritisation, planning and resourcing, and performance management.
  • In most cases, the Delivery Unit should empower and support Ministries, Departments and Agencies (MDAs) to deliver outcomes - communicating priorities, working with them to monitor progress, holding them accountable, helping them solve delivery problems, and ultimately letting MDAs take the credit for successes.
  • For a very small set of top priority economic areas, the Delivery Unit could take catalytic action – being the full owner of activities - including brokering investment deals, overseeing State-Owned Enterprises, managing the design and delivery of targeted public goods and services, and drafting regulations.
  • Setting up and funding the Delivery Unit are not easy tasks but there are many technical and financial resources available that can be tapped into
Contact Person

Anisha Alinda

Anisha Alinda Final Image

Project Officer - EU Project "SPACE" +256 (0)393 262 011/2

About this series

We examine economic issues in Uganda through a policy lens: Which way for Uganda's economic development? Which obstacles does the country face? And how can political players set the course for economic growth? This series crafts policy papers to inform and inspire debates around economic progress in Uganda. The Economic Policy Paper Series is published in cooperation with Centre for Development Alternatives. 

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Centre for Development Alternatives & Konrad-Adenauer-Stiftung e.V