Economic Development and Industrial Policy in Uganda

Findings reveal that Uganda has a weak National Industrial Policy (NIP). Although uncoordinated and non-coherent in terms of implementation, Uganda’s development strategy is well-developed as profiled in the National Development Plans (NDP I and NDP II) aimed at achieving the Uganda Vision 2040. In terms of achievements, about 30% of the NIP has been implemented, largely in policy formulation for sugar, textiles, iron ore and grains.

Results further reveal that the five lead constraints undermining manufacturing in Uganda are: limited finances; infrastructure bottlenecks, particularly low energy for production and bad roads; inadequate skills commensurate to the manufacturing needs; competition from low cost producer countries; and poor quality products. On policy implementation, the five prime challenges in Uganda are: corruption; poor management; non-coherence in policy implementation; inadequate funding; and political interference. It is recommended that Uganda urgently reviews both content and implementation of the industrial policy and consequently comes up with an industrialisation strategy. Industrial clustering; infrastructure development; harnessing technology, innovation, productivity; raising incentives for manufacturing; skills development; and access to finance could transform Uganda into a middle income economy.