Uganda Green Growth Development Strategy 2017/18 – 2030/31

1.1 Background 11

1.2 Context of Green Growth and Development 12

1.3 Conceptual Framework for Green Growth 13

1.4 Objectives of the UGGDS 14

1.5 Methodology for Design and Flow of the UGGDS 15 2. The Challenge and Opportunity of Green Growth 16

2.1 The Challenge 16 2.2 The Opportunity to Adopt a Green Growth Approach to Development 17

2.3 Why Green Growth for Uganda? 17

2.3 Status of the Green Growth / Economy 19

2.3.1 Climate Change Actions 19 2.3.2 Biodiversity Conservation and Natural Resource Management 20

2.3.3 Sustainable Land Management 20

2.3.4 Sustainable Energy 22

2.3.5 Sustainable Transport Options 23

2.3.6 Cities and Urban Development 24

2.3.7 Agriculture 25 2.3.8 Status of Policy and Financing Instruments for Green Growth 26 2.4 Opportunities for Green Growth and Development in Uganda 34

2.4.1 Agriculture 34

2.4.2 Natural Capital Management 36

2.4.3 Planned Green Cities 39

2.4.4 Sustainable Transport 40

2.4.5 Energy for Sustainable Livelihoods and Development 41 2 TABLE OF CONTENTS 3. Green Growth Development Strategic Framework 44

3.1 UGGDS Strategic Direction 44

3.2 Green Growth and Development Strategies 46

3.3 The Results Framework 48 3.3.1 Baselines and assumptions and targets outcomes proposed. 48

3.3.2 Target Outcomes 51 4. Enabling Arrangements 57

4.1 Institutional Arrangements and Governance 57

4.2 Resource Mobilization 59

4.3 Macroeconomic conditions 60

4.4 Shift in government expenditure 60

4.5 More effective enforcement of legislation 60

4.6 Education and Training 61

4.7 Resource and Land Rights Regimes 61 4.8 Creating Enabling Conditions for Psychological and Behaviour Change 61 4.9 Facilitating Businesses to Integrate Sustainability and Equity Concerns 61 4.10 Generate Appropriate Data, Statistics and Policy Support Information. 62 5. Road Map For Implementation 63

5.1 Getting started 63

5.1.1 Mobilizing for Action (2017/18-2020/21) 63 5.1.2 Consolidated Best Practices for Green Growth Interventions (2017/18-2020/21) 63 5.1.3 Programme Design and Resource Mobilization Arrangements (2017/18-2020/21) 64

5.2 Implementing Strategies of UGGDS (2020/21-2030/31) 64 References 70 Annexes 76 Annex 1: GHG Emissions Reduction Potential Used in Results Framework 76 Annex 2: Agriculture 77 Annex 3: Indicative Costing of the Uganda Green Growth Development Strategy 79 THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 3 LIST OF TABLES Table 1: Target practices/technologies to be scaled up in target agro-ecological zones 21 Table 2: Energy balance for Uganda 22 Table 3: Sustainability Financing Opportunities 27 Table 4: Million UGX of imports, between 2011 and 2015 35 Table 5: Urban and rural populations and rates of annual changes 39 Table 6: Number of urban centres by type and urban population, 1991 - 2016 40 Table 7: NDP and Vision 2040 electricity targets 42 Table 8: Proposed nuclear generation plan 43 Table 9: A summary of target outcomes 52 Table 10: Results Framework - Planned Outcomes of the UGGDS 53 Table 11: Matrix of monitoring and evaluation framework 65 Table 12: Public investment costs required to implement the UGGDS 80 Table 13: Public investment costs for each of the Core Areas of the UGGDS 80 Table 14: List of interventions by the Core Areas of the UGGDS 81 Table 15: Estimated public investment costs for each intervention 83 Table 16: List of external project financing relevant to the UGGDS for FY2016/17 86 4 LIST OF FIGURES LIST OF FIGURES Figure 1: Conceptual frame work for Green Growth Development Strategy 14 Figure 2: Flow process of the Green Growth framework in Uganda 45 Figure 3: Proposed institutional framework for Uganda’s Green Growth Development Strategy 58 Figure 4: Implementation path for Uganda’s green growth development strategy 63 Figure 5: Maize yield gap percentage to yield realised with optimal water content 77 Figure 6: Rice yield gap percentage to yield realised with optimal water content 78 Figure 7: Millet yield gap percentage to yield realised with optimal water content 79 THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 5 ACRONYMS AfDB African Development Bank ASSP Agriculture Sector Strategic Plan BAU Business as Usual BIOFIN Biodiversity Finance Initiative CAADP Comprehensive African Agriculture Development Programme CCD Climate Change Department CDKN Climate and Development Knowledge Network CNDPF Comprehensive National Development Planning Framework DFID Development for International Development of the United Kingdom Government DRC Democratic Republic of Congo EMLI Environmental Management for Livelihoods Improvement – Bwaise Facility EPRC Economic Policy Research Centre ERA Electricity Regulatory Authority GETFIT Global Energy Transfer Food-in-Tariff GDeVP Grid Development Plan GGGI Global Green Growth Institute GKMA Greater Kampala Metropolitan Area GoU Government of Uganda GTZ German Technical Cooperate Agency ICT information communication and technology IFPRI International Food Policy Research Institute JLOS Justice Law and Order Sectors KCCA Kampala Capital City Authority MAAIF Ministry of Agriculture, Animal Industry and Fisheries MDAs Ministries, Departments and Agencies M&E Monitoring and Evaluation MEMD Ministry of Energy and Mineral Development MFPED Ministry of Finance Planning and Economic Development MLHUD Ministry of Lands, Housing and Urban Development MoGLSD Ministry of Gender, Labour and Social Development MoWT Ministry of Works and Transport MTIC Ministry of Trade, Industry and Cooperatives 6 ACRONYMS MTWA Ministry of Tourism, Wildlife and Antiquities MWE Ministry of Water and Environment NARO National Agricultural Research organization NBSAP National Biodiversity Stratgey Action Plan NCE New Climate Economy NDCs National Development Plan NDP Nationally Determined Contributions to climate change mitigation NEMA National Environment Management Authority NEPAD New Economic Partnership for African Development NFA National Forestry Authority NPA National Planning Authority OECD Organisation for Economic Cooperation and Development SEEA System of Environmental Economic Accounts SGR Standard Gauge Railway SLM Sustainalbe Land Management SNA System of National Accounts UBOS Uganda Bureau of Statistics UCPC Uganda Cleaner Production Centre UEDCL Uganda Electricity Distribution Company Limited UEGCL Uganda Electricity Generation Company Limited UETCL Uganda Electricity Transmission Company Limited UGDS Uganda Green Growth Development Strategy UIA Uganda Investment Authority UMA Uganda Manufacturers’ Association UNRA Uganda National Roads Authority UNDP United Nations Development Programme UNFCC United Nations Framework Convention on Climate Change USAID-EMOS United States Agency for International Development -Environment Management for oil/gas U-SIF-SLM Uganda Strategic Investment Framework for Sustainable Land Management UWA Uganda Wildlife Authority THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 7 EXECUTIVE SUMMARY The 2030 Transformative Agenda on Sustainable Development that is defined by 17 Sustainable Development Goals (SDGs) presents an opportunity for Uganda to renew its commitment to sustainable development principles. Sustainable development is a basic principle that runs through the Uganda Vision 2040, the second National Development Plan and the 1995 Constitution of the Republic of Uganda. As the country rallies behind transforming from a peasant to a modern and prosperous country by 2040, the Government is taking steps to ensure that this transformation is cognizant of green growth tenets stipulated by all the SDGs, the 2015 Paris Agreement on Climate Change and the 2063 Agenda of the African Union. This implies that the envisaged economic growth must not only be socially inclusive but also uphold the integrity of the environment and natural resources. Over the last two decades, Uganda has registered an impressive 7 percent annual economic growth rate contributing to a decline in income poverty from 56 percent in 1991 to 19 percent in 2015, a rise in life expectancy from 48.1 years to 63.3 years and an increase in electricity access from 5.6 percent to 20.4 percent over the same period. This impressive performance notwithstanding, challenges such as unemployment, income inequalities and regional imbalances, and environmental degradation persist. For this reason, Uganda will need to reconsider its growth model to deliver inclusive economic and social outcomes while protecting natural capital, addressing climate change, creating jobs and accelerating economic growth. The green growth model, also referred to as the vehicle for sustainable development, presents an approach that addresses these multi-dimensional development needs simultaneously. The 2030 Agenda on Sustainable Development provides the global context for green growth. While the broad principles of green growth run through the Uganda Vision 2040 and the second National Development Plan, they need to be unpacked into strategies and interventions that can be implemented to deliver the desired outcomes. The Uganda Green Growth Development Strategy has therefore been developed to operationalize the broad green growth tenets highlighted in Agenda 2030, the Uganda Vision 2040 and the NDPII (2015/16-2019/20) to support the country’s accelerated transition to middle-income status. 8 EXECUTIVE SUMMARY The Uganda Green Growth Development Strategy (UGGDS 2017/18 –2029/30) aims to ensure that the goals of the Uganda Vision 2040 and the NDPII 2015/16-2019/20 are attained in a sustainable manner. Although there is no global common definition of green growth, in Uganda’s context, green growth is defined as an inclusive low emissions economic growth process that emphasizes effective and efficient use of the country’s natural, human, and physical capital while ensuring that natural assets continue to provide for present and future generations. Empirical macroeconomic sector modeling indicates that full implementation of the UGGDS interventions (green growth scenario) will enhance national GDP by 10 percent beyond the business as usual (BAU) target, deliver an additional 4 million green jobs and reduce greenhouse gas emissions by 28 percent relative to the conventional growth pathway. The general objective of the UGGDS is to provide guidance on priorities, strategies and governance frameworks for implementing the green growth principles within the existing development frameworks towards the sustainable development of the country. Specifically, the UGGDS seeks to: i. Accelerate economic growth and raise per capita income through targeted investments in priority sectors with the highest green growth multiplier effects; ii. Achieve inclusive economic growth along with poverty reduction, improved human welfare and employment creation; iii. Ensure that the social and economic transition is achieved through a low carbon development pathway that safeguards the integrity of the environment and natural resources. The UGGDS has five focus areas whose selection was informed by empirical macroeconomic analytical studies that identified the areas with the highest green growth potential in terms of investments and contribution to the achievement of national development goals and targets. The focus areas are; i. Sustainable agriculture production through upgrading the value chain of strategic commodities and enterprises with a focus on irrigation and integrated soil fertility management. ii. Natural capital management and development which focuses on tourism development, sustainable forestry, wetlands and optimal water resources management; iii. Planned urbanization and development of green cities (comprehensive economic physical planning and sustainable procurement and interlinkage between the rural raw materials production base and industrial production in cities); iv. Sustainable transport with a concentration on multi-modal and mass transport systems for urban areas and development, utilization and interconnectivity of planned national and regional transport connectivity; and v. Energy for green growth with increased emphasis on renewable energy investment through biomass energy for electricity and improved technology for enhanced efficiency in using biomass for domestic and industrial uses, enhancing solar power potential for on-grid, exploitation of geothermal energy and reinforcement of environmental, health and economic safeguards for energy generation. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 9 Implementation of the UGGDS is expected to generate eight development outcomes by 2030 and these are: i. Income and livelihoods enhancement; ii. Decent green jobs; iii. Climate change mitigation and adaptation; iv. Environment and natural resources management; v. Food and nutrition security; vi. Resource use efficiency; vii. Social inclusiveness; and viii. Economic transformation at national and sub-national level. These outcomes were used as the criteria for appraising the various strategies and interventions in the UGGDS. The smooth implementation of the UGGDS to facilitate national transition to a green economy is based on the following conditions: i. Stable macroeconomic conditions, with the GDP growth rate ranging between 5 and 10 perent per annum sustained in the medium to long term; ii. Shifting government expenditure, especially public procurements, towards value chains that encourage sustainable consumption and production; iii. Effective enforcement of legislation; iv. Structural changes that impart new knowledge and skills to government, decision makers, professionals and workers, down to local levels; v. Improved resource and land rights to increase access to resources for producers and developers; vi. Enabling conditions for psychological and behaviour change; vii. Facilitating businesses to integrate sustainability and equity concerns. viii. A gradual decline in population growth rate from the current 3 per cent to the envisaged 2.4 percent by 2040. The UGGDS is to be implemented within the existing institutional framework, based on three pillars: i. National Green Growth Governance and Coordination Frameworks to provide regulatory oversight and support to ensure that the macroeconomic and sustainability drivers and policies will guide the activities of all actors, including the private sector. ii. Multisectoral Implementation (MDAs, District Local Governments (DGAs), urban authorities, civil society, and development partners) through integration in their planning and budgeting tools. iii. Microlevel implementation landscapes including cooperative groups. 10 EXECUTIVE SUMMARY The resource mobilization strategy for the UGGDS is informed by the following six funding sources: i. Public sector allocation and environmental fiscal reform and subsidy reforms; ii. Sustainable public procurement; iii. International funding: iv. Sustainable production and trade and inclusive green social enterprises; v. Green energy investments; and vi. Incentives and green innovations. The UGGDS will be implemented in two parts. An initial period from FY2017/18 to FY2020/21 (1 July-30 June) will be used for consolidating best practices for a green economy, capacity-building and awareness creation, programme and project design and resource mobilization. Full scale implementation is for the period between FY2020/21 and FY2030/31. The strategy will be integrated into the implementation of the 10-year National Development Plan 2020/21 to 2030/31, NDP III (2020/21-2024/25) and NDP IV (2025/26- 2030/31). A detailed action plan and costing that sequences and unpacks the UGGDS strategies into actions for implementation has been prepared and is an annex document for the UGGDS. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 11 1 INTRODUCTION

1.1 Background The Government of Uganda has demonstrated a commitment towards the principles of green growth and sustainable development as indicated in various legal, policy and planning and institutional frameworks. The 1995 Uganda Constitution provides for sustainable development and public awareness about effective management of natural resources. The Uganda Vision 2040 aspires to transform Uganda from a peasant to modern and prosperous country by 2040 through strengthening fundamentals to harness existing opportunities. It further acknowledges that green growth is the approach desired for implementation of sustainable development and wealth creation. Similarly, the second National Development Plan 2015/16- 2019/20 (NDP II) seeks to strengthen Uganda’s competitiveness for sustainable wealth creation, employment and inclusive growth, and achieve lower middle income status by 2020 with a per capita income of US$ 1,039. The Uganda Green Growth Development Strategy (UGGDS) is one of the steps that must be taken to achieve the envisaged transformation in an inclusive and environmentally sustainable way. Uganda has achieved various milestones on social, economic and environmental targets. For example, between 1991 and 2015: Income poverty fell from 56 percent to 19 percent; The percentage of the national budget funded from domestic sources increased from 64.7 percent to 82 percent; Literacy levels rose from 54.0 percent to 72.2 percent; Life expectancy rose from 48.1 63.3 years; and Access to electricity grew from 5.6 percent to 20.4 percent. 12 INTRODUCTION These achievements notwithstanding, Uganda still faces development challenges such as high levels of unemployment, income and regional inequality, high costs of production mainly driven by human and technological inefficiencies, external shocks caused by a slowdown in global growth, impacts of climate change and deteriorating natural capital driven by falling forest and wetland coverage as a percentage of the total land area. For instance, forests and wetlands continue to disappear at alarming rate, mainly because of their direct consumption use value. Specifically, the forest cover as a percentage of the total land area has fallen from 24 percent in 1990 to 14 percent by 2015. Cognizant of the above challenges, Uganda seeks to pursue a green growth development path in line with national, regional and global commitments such as the Sustainable Development Goals and the 2015 Paris Agreement on Climate Change. The 2030 Transformative Agenda on Sustainable Development highlights the transition to a green economy as the vehicle for sustainable development with associated benefits such as poverty alleviation, sustained economic growth, social inclusion, climate change adaptation and mitigation, improving human welfare and creating opportunities for decent work for all, while maintaining the healthy functioning of the planet, also referred to as the earth’s ecosystems. The UGGDS has therefore been developed as a tool to reconcile the existing economic, social and environment conflicts and facilitate the achievement of economic, social and environment targets simultaneously. The UGGDS is expected to optimize the potential, maximize the benefits, and minimize the costs of the country’s economic growth pathway. It is noteworthy that the UGGDS is anchored in Uganda’s policy and development planning frameworks, notably the Uganda Vision 2040 and the second National Development Plan (NDPII) (2015/16 – 2019/20) as embodied in the Comprehensive National Development Framework.

1.2 Context of Green Growth and Development Globally, the 2030 Transformative Agenda on Sustainable Development is the guiding framework for green growth. The five principles of the 2030 Agenda—Planet, Prosperity, People, Peace and Partnership— are aligned with the three pillars (economic, social and environmental) of sustainable development. It should be noted that the 2030 Agenda was informed by the Rio+20 Outcome document on the “Future that we want” developed in 2012, which rallied all countries to pursue green growth as a means to sustainable development. This translated into the mainstreaming of sustainable development principles in Uganda’s development framework. While there is no internationally agreed definition of green growth, there are a number of principles that must define and govern the green growth approach to development. Key among these are: sustained economic growth; resource use efficiency; climate change response through adaptation and mitigation; creation of decent green jobs; and human wellbeing and social inclusiveness. Green growth/ economy definitions have been advanced by a number of global players as enumerated below: i. The OECD: defines Green Growth as “fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies.” ii. World Bank: Green growth is growth “that is efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural hazards and the role of environmental management and natural capital in preventing physical disasters.” THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 13 iii. African Development Bank (AfDB): Defines green growth as “the promotion and maximisation of opportunities for economic growth through building resilience, managing natural assets effieicntly and sustainably including enhancing agricultural productivity, and promoting sustainable infrastructure” iv. UNEP: Defines a green economy as a “system of economic activities related to the production, distribution and consumption of goods and services that result in improved human well-being over the long term, while not exposing future generations to significant environmental risks and ecological scarcities.” v. United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP): Green growth is “growth that emphasizes environmentally sustainable economic progress to foster low-carbon, socially inclusive development.” In light of Uganda’s development needs, green growth will be defined as an inclusive low emissions economic growth process that emphasizes effective and efficient use of the country’s natural, human, and physical capital while ensuring that natural assets continue to provide for present and future generations. The UGGDS seeks to unpack the broad principles of green growth espoused in the 2030 Agenda, Uganda Vision 2040 and the NDP II into key intervention areas that can be implemented. Additionally, the UGGDS is an opportunity to use the additional efficiency and resource maintenance capacity generated to accelerate the country’s economic growth towards the achievement of middle income status targets set in NDP II and the Uganda Vision 2040. The envisaged eight outcomes of the Uganda Green Growth Development Strategy will contribute directly to the implementation of the five principles of the 2030 Agenda on Sustainable Development. The eight outcomes entail; income and livelihood enhancement; decent green jobs; climate change adaptation and mitigation; environment and natural resources management; food and nutritional security; resource use efficiency; and social inclusiveness and economic transformation at national and local level.

1.3 Conceptual Framework for Green Growth Figure 1 illustrates the conceptual framework of the UGGDS, which is designed to guide and govern green growth investments in the country. This conceptual framework is based on resource exploitation through production, consumption and efficiency in distribution. The conventional/current development approach allocates minimal effort to resource maintenance during exploitation, production and consumption and the resulting inefficiencies. Consequently, there is significant slack in production, distribution and consumption that derails economic transformation. Minimal resource maintenance reduces the base of economic activity and builds up large future costs for restoring natural systems. The green growth conceptual framework suggests that redressing these gaps ensures use of the additional efficiencies and capacity to accelerate economic transformation. 14 INTRODUCTION Figure 1: Conceptual framework for Green Growth Development Strategy Resource Efficiency, total Maintenance factor productivity Resource Access Production Improved Consumption Distribution livelihoods, Efficiency re-investment inclusiveness into resources

1.4 Objectives of the UGGDS Main objective: To provide guidance and describe the governance framework on priorities and strategic interventions for implementation of the green economy, green growth and development in Uganda. Specific objectives: i. Accelerate economic growth and raise per capita income through targeted investments in the priority sectors with the highest green growth multiplier effects; ii. Achieve inclusive economic growth with poverty reduction, improved human welfare and employment creation; iii. Ensure that social and economic transition is achieved through a low carbon development pathway that safeguards the integrity of the environment and natural resources.

1.5 Methodology for Design and Flow of the UGGDS The UGGDS was developed through a consultative process led by a multi-sectoral National Task Force comprising state and non-state actors. The institutions that were members of this task force are enumerated on the acknowledgement page. The Task Force held retreats and workshops which were marked by extensive literature reviews, brainstorming sessions and analytical discussions on the green growth definition, goal setting, appraisal of options, considering implementation roadmap and monitoring and evaluation, among other activities. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 15 It also important to note that the design used existing knowledge and analysis on green growth in the country to develop and unpack the green growth tenets prioritized in the Uganda Vision 2040 and the NDP II. Other key studies that informed the strategy include analyses by: the New Climate Economy (NCE) and the Global Green Growth Institute (GGGI); the Ministry of Water and Environment (MoWE) and the Climate and Development Knowledge Network (CDKN); UNDP: and the National Environment Management Authority (NEMA). 16 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH 2 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH

2.1 The Challenge Uganda has achieved an impressive economic growth rate estimated at an annual average of 6.6 percent over the last decade (World Bank 2016). This growth has produced positive changes in the economic, social and environment development indicators as discussed in the preceding chapter. However, this impressive growth has not been inclusive, as demonstrated by the high levels of income inequalities and regional imbalances. The eastern and northern regions of the country continue to lag behind and remain stagnant in terms of income poverty and age dependency levels. Additionally, the growth has mainly been generated by the service sectors, such as banking and finance and telecommunications, which have a low job creation multiplier effect. Consequently, each unit of economic growth has not resulted in an equivalent increase in the employment rate, thereby contributing to the high levels of unemployment. From the environment perspective, natural resources such as forests and wetlands have shrunk, raising concerns about whether the economic growth was achieved at the expense of the environment and natural resources. National forest coverage as a percentage of total land surface area declined from 24 percent in 1990 to 14 percent in 2015 while national wetlands coverage as a percentage of the total land area declined from 15.6 percent in 1994 to 8 percent in 2014. The impacts of climate change have also plagued Uganda in the form of intense and more frequent prolonged droughts, torrential and poorly distributed rainfall and a rise in temperatures, as demonstrated by a significant reduction in the volume of glaciers on Mountain Rwenzori. Containing these impacts calls for a novel development approach that can sustain the economic growth while improving the social and environment development targets. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 17

2.2 The Opportunity to Adopt a Green Growth Approach to Development The challenge discussed in the preceding section presents an opportunity to adopt a growth approach that simultaneously achieves economic and social development while conserving the sustainability and integrity of the environment and natural resources. The archetypal tradeoff between economic development and environmental sustainability is resolved by the green growth development model which simultaneously achieves both. The existing legal, policy and planning framework will underpin the adoption of a green growth development model over the Uganda Vision 2040 period. This lays the ground for developing a strategy on how to operationalize the green growth principles highlighted in the various legal, policy and planning frameworks. For instance, the second NDP II elaborates macro green growth statements. The NDP II theme is strengthening Uganda’s competitiveness for sustainable wealth creation, employment and inclusive growth. The UGGDS presents an impetus to unpack these broad green growth strategies into actionable areas for implementation.

2.3 Why Green Growth for Uganda? The major driver for the pursuit of green growth and the development of the Uganda Green Growth Development Strategy is to ensure that the goals and targets of the Uganda Vision 2040 and the NDPII are achieved in a sustainable manner. The UGGDS will provide policy options that enhance and exploit synergies between economic growth, environmental sustainability and social equity. As well as addressing persistent development challenges that seem insurmountable by means of the conventional development model, empirical evidence suggests that accelerated achievement of medium term and long term targets hinges on the transition to green growth. Key among the NDP II and the Uganda Vision 2040 targets are: I. Accelerating annual economic growth from 5.2 percent (2012/13) to average 6.3 percent per annum by 2019/20 and 7.8 percent by 2040; II. Increasing per capita income from US$ 743 in 2012/13 to US$1,039 by 2020 and US$9,500 by 2040; III. Increase forestry coverage from 15 percent in 2010 to 24 percent by 2040; IV. Reduce population growth rate from 3.2 percent in 2010 to 2.4 percent by 2040; and V. Increase income distribution (GINI Coefficient) from 0.43 in 2010 to 0.32 by 2040. Over the NDP II period, wealth creation for the economic transformation is expected to result from economic activity in: agriculture; tourism; mineral oil and gas; environment and natural resources; trade; industry and cooperatives; and infrastructure, among others. These sectors have enormous green growth potential. A 2016 empirical macroeconomic study of the potential impact of green growth conducted by the Government of Uganda in partnership with the New Climate Economy (NCE) and the Global Green Growth Institute (GGGI) revealed that a green growth strategy is a viable development strategy for Uganda. The study identified agriculture, energy, industry and the urban sector as having the greatest green growth potential with resource productivity, infrastructure investment and innovation being the main potential drivers of growth in these areas. The economic benefits of implementing the transition to green growth scenario over the Uganda Vision 2040 period include boosting GDP by 10 percent above the Business as Usual (BAU) scenario, delivering an additional four million green jobs (clean energy transition, city level infrastructure investments, solar powered irrigation and agroforestry) and reducing future greenhouse gas emissions by 28 percent, equivalent to 30.4 million tons of emissions above the 18 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH national NDC target of 22 percent. This will however come at an additional cost in the short term with long term benefits in the medium and long term. As earlier noted, growth over the years has not been equally distributed and marred by income inequalities and regional imbalances. One of the principles that govern green growth is social inclusiveness and the transition will address the growing inequality and imbalances. The inclusive aspect of the NDP II, entails reducing poverty levels from 19.7 percent in 2012/13 to 14.2 percent in 2019/20 and less than 5 percent by 2040 (GoU 2015), and increasing the share of the national labour force employed from 75.4 percent to 79 percent and 94 percent from 2012/13 to 2019/20 and 2040, respectively (GoU 2015), by means of regional equalization grants among others. Uganda aspires to achieve the aforementioned economic and social targets while maintaining the integrity and functionality of its environment, ecosystems and natural resources. It is evident that various environment indicators are on the decline, despite the existence of a supportive policy and institutional framework. Forest cover declined from from 4.9 million ha in 1990 to 1.83 million ha in 2015, a reduction of 3.05 million ha in just 25 years . Wetland resources, particularly in the urban and peri-urban areas have declined considerably from 15.6 per cent of land cover in 1994 to about 8 percent of land cover by 2010 (UNDP and NEMA 2017). The attainment of development priorities at the expense of the environment not only undermines the sustainability of such growth and achievements but also harms the most vulnerable groups who depend on the environment and are at a high risk of being excluded from the development process. This exclusion, coupled with the impacts of climate change, end up compounding poverty and exacerbating the existing economic and environmental scarcities faced by such groups. Another motivation for the transition to green growth is the impacts of climate change, whose severity is increasing. Climate change impacts, such as poorly distributed torrential rains and intense frequent droughts have harmed infrastructure systems, human health, and agriculture and compounded existing poverty. Green growth provides a tool box of options that address conventional development while also building national resilience against climate change through adaptation and mitigation. The projected damage associated with climate change inaction for agriculture, water, total infrastructure2 and energy (2010-2050) is estimated to cost between US$273 and US$437 billion, equivalent to US$7-US$11 billion per annum (MWE 2015). Green growth provides for the incorporation of the environment and natural resources into the national accounts to ensure that prices and economic growth metrics reflect the corresponding effect of production processes on the environment. Declining natural capital poses a great threat to sectors such as tourism, forestry and agriculture to mention but a few. Although there some uncertainty about the exact figues, nature based tourism was recognized as having accounted for about 9 percent of GDP in 2012/13. A 2010 study of the forestry sector indicated that forestry may have contributed the equivalent of 8.7 percent of Uganda’s GDP in 2010 (MWE 2016). Adoption of green growth will end the computation of national accounts in a manner that excludes the impact of economic activity on the environment and natural resources. In relation to the above, the study on the “Contribution of Water Resources Development and Environmental Management to Uganda’s Economy” (Industrial Economics, Incorporated 2016) indicated that water and environment sector investments are capable of yielding significant economy-wide impacts by 2040. The 2 Total infrastructure combines both transport infrastructure and human settlements. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 19 beneficial effects of these investments result in a 3.5 percent to 3.9 percent difference in GDP between the Business as Usual (BAU) and High Investment scenarios, equivalent to an income improvement of US$120 per capita, above the BAU scenario. The investments required would be approximately US$4.3 billion for water development, and US$4 billion for environmental management for the high scenario over the full 26-year period.

2.3 Status of the Green Growth / Economy The development of the UGGDS gives direction and contributes to the implementation of the green growth principles. Although the UGGDS is perceived as one of the initial steps of transitioning to green growth and implementing the 2030 Agenda on Sustainable Development, there have been ongoing green growth related initiatives. As already noted, green growth has been mainstreamed into the Uganda Vision 2040 and the NDP II 2015/16-2019/20, both of which informed the strategic direction of the UGGDS. As such, the UGGDS will build on the existing legal, policy, planning and institutional frameworks to advance the green growth transition. Globally, the 2030 Transformative Agenda on Sustainable Development and the Paris Agreement on Climate change provide the umbrella for the green growth transition. Uganda is implementing the Switch Africa Green project directly, coordinated by the National Environment Management Authority and financially supported by various development partners. The project seeks to ensure resource use efficiency in small and medium enterprises by adopting sustainable consumption and production principles. Emphasis is on re-use, recycle and reduction of production inputs. Secondly, there is a programme that seeks to create green jobs for youths in Uganda. The UGGDS will be the guiding document for all green growth initiatives in the country. The following sections provide a review of the status of green growth in various areas of the economy.

2.3.1 Climate Change Actions Climate change adaptation and mitigation is a salient component of green growth and Uganda has demonstrated remarkable commitment in its national climate change response. As the Uganda Vision 2040 stipulates, the climate change strategy is to prioritize national resilience through adaptation and mitigation. Uganda is a signatory to the UNFCCC and has mainstreamed climate change in its development framework for effective response. Uganda has a Climate Change Department which coordinates the national climate change response. Some of the current climate change response initiatives that are related to green growth include: creation of an updated inventory of greenhouse gas emissions by sector; preparation of various Nationally Appropriate Mitigation Actions (NAMAs); the community tree planting project which entails distribution of free tree seedlings; development of a national REDD+ strategy; an environmental tax on old vehicles with large emission; addressing the fiduciary requirements to make Uganda qualify for climate finance from the various climate finance windows; distribution of efficient charcoal saving cook stoves; and undertaking studies that quantify the economic cost of the climate change response compared the with the cost of inaction. Progress in low emissions development and climate change mitigation has demonstrated the critical leverage for sectors such as: energy (particularly wood fuel usage, biomass for energy and hydropower generation): cities and urban areas (specifically in waste management, transport and housing development); agriculture through climate smart agriculture, conversion agriculture and regulating emissions in the agricultural value 20 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH chain: and and industry through energy efficiency and other low emissions activity (GoU 2015). The co- benefits of a low emission development programme have spurred participation, and increased development impact through sustainable production and consumption, and generation of revenue streams.

2.3.2 Biodiversity Conservation and Natural Resource Management Green growth entails accelerated economic and social development while maintaining the integrity and functionality of ecosystems and biodiversity. The country’s overall framework for biodiversity conservation is the National Biodiversity Strategy Action Plan (NBSAP). The seven strategic areas of the NBSAP are: i. Strengthening stakeholders’ coordination and frameworks for biodiversity management. This strategic area covers policy, regulations and legislative reforms, institutional and coordination action on the part of actors including MDAs, District Local Governments civil society and development partners. ii. Facilitate and enhance capacity for research, monitoring, information management and exchange on biodiversity. iii. Put in pace measures to reduce and manage negative impacts on biodiversity. This role involves direct environmental and natural resource (biodiversity) management. iv. Sustainable use and equitable sharing of the costs and benefits of biodiversity. The leading examples on sustainable use and sharing are the revenue sharing from gate collections between the Uganda Wildlife Authority (UWA) and parishes (communities) surrounding the national parks. This collaborative resource management arrangement involves designing memorandums of understanding and capacity- building and community liaison to maintain the stewardship role. v. Enhancing awareness and education in biodiversity issues among the various stakeholders. vi. Harnessing modern biodiversity technology for socioeconomic development with adequate safety measures for human health and the environment. At the core of modern biotechnology research are innovations for increased agricultural production covering crops like stock and fisheries, investments in tree technologies and medicinal research. The country has a National Biotechnology and Biosafety Bill (2016) on the floor of parliament, which aims to clarify the position on biotechnology biosafety. vii. Promoting innovative sustainable funding mechanisms to mobilize resources for implement of the NBSAP. Uganda has a biodiversity management funding gap estimated at US$455 million/year. A draft Biodiversity Finance Plan has been developed to provide a strategic direction for the NBSAP, with support from the Biodiversity Finance Initiative (BIOFIN).

2.3.3 Sustainable Land Management Land is a key strategic asset for Uganda. It constitutes over half of the value of the asset basket of poor Ugandans. However, current farming practices threaten soil fertility. Annual losses of nitrogen potassium and phosphorous are estimated at 85, 75 and 10kg/ha/year. In 2007, the Government commissioned the Strategic Investment Framework for Sustainable Land Management (U-SIF SLM) with direct support from various development partners. The targets of the U-SIF SLM include (Table 1): (i) development of land sustainability maps and land use plans for at least 75 percent of the THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 21 country; (ii) updating the soils information/mapping for at least 75 percent of the country; (iii) development and operationalization of watershed management plans in at least 15 sites; (iv) rehabilitation/restoration of degraded agricultural landscapes in at least 20 districts; (v) increaseing tree cover on agricultural landscapes through promotion of agro-forestry and afforestation with at least 60 tree nurseries; (vi) strengthening and training 150 cooperative produce and marketing groups in the development of SLM-friendly value chains; (vii) supporting the development of local communities in at least 10 districts to acquire and use efficient charcoal making kilns and assisting 20 schools to acquire energy efficient cook stoves (UNDP 2014). Table 1: Target practices/technologies to be scaled up in target agro-ecological zones Targets in the 4 priority zones Practice Demonstrations Established Established with voluntarily incentives through advice Integrated Nutrient Management (INM) 1,000 ha 10,000 ha 2,500 ha Contour bunds 1,000 km 10,000 km 2,500 km Grass contours/bunds 1,000 km 10,000 km 2,500 km Intercropping 2,000 ha 20,000 ha 5,000 ha Mulching 2,000 ha 20,000 ha 5,000 ha Conservation Agriculture 1,000 ha 20,000 ha 5,000 ha Agroforestry 1,000 ha 20,000 ha 5,000 ha Woodlots 1,000 ha 20,000 ha 5,000 ha Terracing (targets SW & Eastern 100 ha 1,000 ha 250 ha highlands) Rehabilitation/reclamation of 200 ha/zone degraded watersheds: 4 sites strategic interventions Shallow wells 50 units 500 units 125 units Household rainwater harvesting 100 units 1,000 units 250 units Institutional rainwater harvesting 50 units 500 units 125 units Run-off/water harvesting from roads, 2,000 ha 20,000 ha 5,000 ha paths Large surface run-off harvesting 100 units (350m3 with 200 units 50 units reservoir (cattle corridor) HDPE dam liners valley tanks or check downs) Household energy saving stoves 5,000 units 20,000 units 5,000 units Institutional energy saving stoves 100 units 1,000 units 250 units Efficient kilns for charcoal production 100 units 500 units 50 unit (cattle corridor) Source: UNDP 2014 22 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH The institutional management of U-SIF SLM is held by MAAIF, in cooperation with the Ministry of Lands Housing and Urban Development (MLHUD), Ministry of Water and Environment (MWE), Ministry of Energy and Mineral Development (MEMD) and the Ministry of Trade, Industry and Cooperatives ( MTIC) who jointly developed the strategic investment framework. The SIF-SLM targets four land degradation hotspots/agro-ecological zones across the country. The agro-ecological zones are: (i) South Western and Eastern Highlands, (ii) Lake Victoria Crescent Region, (iii) the cattle corridor, (iv) Eastern and Northern Uganda. The U-SIF SLM will cost US$245.3 million and is financed through general budget support at national and subnational level, private investments by farmers, forest owners and users/and bilateral multi-lateral development partner support (UNDP 2014). Although agricultural stakeholders are aware of the challenge of unsustainable land management, several factors have been identified that constrain action. The major constraints to adoption of improved technologies and accelerated agricultural commercialization in Uganda include: (i) high transport and energy costs; (ii) limited awareness of farming as a business; (iii) weak linkages of small farmers with value chain actors and rural financial institutions. (World Bank 2010).

2.3.4 Sustainable Energy Existing green growth energy initiatives include the government commitment to increase the generation of electricity from renewable sources and distribution of efficient cooking stoves. Uganda also boasts a solar plant which contributes 10 MW to the national grid with the potential to triple this production to 30 MW. The plant is situated in Soroti and was launched in January 2017. The energy balance for Uganda is heavily dominated by biomass. Biomass contributes nearly 90 percent of the country’s total consumable energy (MEMD 2015). The dominant forms of biomass are firewood and charcoal which are the primary sources of cooking fuel. Other sources of primary energy are petroleum products and electricity (Table 2). Table 2: Energy balance for Uganda 2014 Source of energy Contribution % Biomass (fuel wood) 78.6 Biomass (charcoal) 5.6 Biomass (residues) 4.7 Petroleum products 9.7 Electricity 1.4 Total 100 Source:MEMD 2015. Electricity is mainly generated from hydropower. Additional contributions are from bagasse co-generation and thermal diesel (MEMD 2015). Uganda’s per capita electricity consumption at 80kWh/year, is far below its peers Kenya at 155kWh/year, and Ghana at 300 kWh/year or the Republic of Korea at 8,502kWh/year (MEMD 2015). Electricity will be critical for Uganda to obtain the growth trajectory and socioeconomic transformation it needs through better access to education, health care, improved quality of life, and personal security among others (MEMD 2015). THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 23 Uganda’s per capita electricity consumption is to grow from 80kWh/capita to 578kWh/capita by 2020 and 3688kWh/ capita by 2040. This will require increasing solar power production for the on-grid to 5000 MW by 2030 and generating geothermal power of 450MW by 2030 (GoU 2003). Additionally, current capacity utilization for hydropower plants is low, estimated at 60 percent to 70 percent accompanied by high grid power loss (ERA 2015). The country’s electricity demand is growing at an annual average rate of 9 percent. It has 850MW of installed capacity, of which approximately 645MW is hydro and 101.5MW is thermal generating capacity (USAID 2016). The Government is building additional large hydropower facilities, including the Karuma Hydropower plant of 600MW and Isimba Fall Hydropower plant of 183MW. In December 2016, the Government announced that a 10MW solar power plant had started generating electricity for the national grid (ERA 2016b). When the generating capacity for sugarcane factories was added the installed capacity was close to 1,000MW. Plans for construction of the 840MW Ayago hydro plant are also under way, as well as several mini hydro structures.

2.3.5 Sustainable Transport Options The transport sector in Uganda is divided into sub-sectors; road, railway, water and air (MoWT 2016). Road transport is the dominant mode, accounting for over 90 percent of cargo freight and passenger movement. The road network falls into four categories: national, district, urban and community access roads. By June 2016, 20 percent of road network was paved and 80 percent was unpaved. National roads are managed by the Uganda National Roads Authority (UNRA). The authority also operates 10 ferries located at strategic points that link national roads across major water bodies. District roads total 35,556 km and are the mandated responsibility of District Local Governments (DLGs). Urban roads on the other hand, total about 12,000 km and are managed by urban authorities within whose boundaries they fall, excluding links maintained by UNRA. Community access roads have a current length estimated at 78,000 km and are the responsibility of sub-county local governments. It is estimated that the country has between 700,000 and 1,200,000 vehicles an annual growth rate estimated at 15 percent with motorcycles, the fastest growing category. The railway transport network in Uganda extends for 1,260km. The Uganda rail track is a meter gauge. The government is in the process of constructing a Standard Gauge Railway (SGR) to improve cargo transportation from the coast in Mombasa (and Dar Es Salaam) and in-country goods transport. Air transport is dominated by the operations at Entebbe International Airport (EBB). The Government has designated five additional airports as potential entry/exit (international) airports, namely Arua, Gulu, Pakube, Kidepo and Kasese. An addition eight airfields—Soroti, Kisoro, Jinja, Lira, Tororo, Masindi, Mbarara and Moroto—are expected to receive chartered flights. The rest of the upcountry airports are either privately owned or managed by local authorities. Water transport is modestly developed in Uganda. Nonetheless, most of the main water bodies in the country (Lake Victoria, the River Nile, Lake Albert, Kazinga channel etc.) are navigable and are used by motorized and non-motorized vessels. Railway ferries in Jinja and Port Bell on Lake Victoria connect with railway networks in Mwanza (Tanzania) and Kisumu (Kenya). Large vessels in Lake Victoria operated by the Government and/ or under concession, and by private entities include MV Kaawa, MV Kalangala, MV Pearl, MV Amani, MV Sese, and Kalangala Infrastructure Services (KIS). Numerous small craft operating on inland water ways have very poor safety standards and are a continuous source of concern for government and travellers (MoWT 2016). 24 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Uganda’s Standard Gauge Railway (SGR) is part of the Regional SGR Protocol that obliges the four countries party to Northern Corridor Integration Projects (NCIP) to develop a seamless railway transport system, the Government of Uganda is undertaking its obligations to fulfil its commitments. The SGR Project Management Unit established by Cabinet Minute 107 is developing a modern and efficient railway transport system to address both the freight and passenger transportation needs of the country. Currently, road trucks carry at least 97 percent of the international freight, resulting in high costs doing business and making Uganda an economically uncompetitive country. By introducing reliable, safe, affordable and efficient railway transport systems, the SGR will occasion a drastic freight transportation model shift from road to rail. This modal shift will reduce the economy’s cost of freight transportation from the seaport of Mombasa by 69 percent from the current average of US16 cents/ton/km to an average of US5 cents per ton/km. This will save the economy over US$2 billion annually in transport costs. Importantly, it will reduce the freight transportation time over land from Mombasa to Kampala from the current average of 10-14 days to just one day. The Project is developing two types of railway systems: I. The main SGR line – for both freight and passengers. The main SGR routes comprise; the Eastern route from Malaba to Kampala, The Northern route from Tororo via Gulu to Packwach -Vurra (at the DR Congo border) and a line going northwards from Gulu to Nimule (at the South Sudan border) as well as the Western & South Western Route from Kampala via Kasese to Mpondwe at the DR Congo border and from Kampala via Mbarara and Bihanga to Mirama Hills (at the Rwanda border). II. The SGR-LRT (Light Rail Mass Transit): A town service rail system for only passengers to cater for commuters within the city and the Greater Kampala Metropolitan Area (GKMA) – especially in high traffic areas. The first phase of LRT routes cover 40KM route length, radiating from the current Kampala Railway Station and cover Kampala to Namanve, Kampala to Kajjansi, Kampala to Kawempe (Ttula), and Kampala to Kyengera. This will reduce the current travel time in these high traffic areas. The two railway systems will drastically improve the transport situation in the country, and reduce the transportation costs and transit time currently spent on the roads by over 70 percent (GoU 2016).

2.3.6 Cities and Urban Development An assessment of the requirements for promotion of green urban development in Kampala City (World Bank 2015) found that inadequate and ineffective planning has been a key obstacle to providing the management required to protect the city’s environmental assets. For decades, the city has lacked an effective physical development plan to guide growth and development. Historically, there has been sectoral planning in silos, each with separate goals, targets and planning horizons. New procedures are underway to establish a more integrated urban planning approach. This will be essential to implementing more sustainable solutions. The stakeholder engagement process can be developed to bring a broad array of considerations into the planning process. Little protection for the city’s environmental assets has been afforded under the current regulatory regime. Environmental regulations have created the enabling framework for protecting the wetlands, but essential actions such as survey and delineation of wetland areas have not been implemented due to the political, social and economic implications of restricting land use. Cities and municipalities are the principal actors dealing with waste management in the country. Regulations for discharge of effluent, particularly to control industrial discharge, have not been widely enforced, and the enforcement capacity of institutions charged with environmental management is generally limited. The land THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 25 management system requires significant financial outlays for public acquisition of land for infrastructure and service facilities, which constrains delivery of sanitation, solid waste and drainage services. The current system limits the supply of developable land, driving informal development to marginal areas and to environmentally sensitive areas. It distorts the spatial structure of the city and complicates and delays urban planning and development (World Bank 2015). Kampala city, the country’s major city, is a rapidly growing city. As the built environment continues to expand, it leads to loss of natural resource and ecosystems. Key steps for the future include: i. Development of a profile of natural assets at the metropolitan scale and a broad strategy to address pressures on these assets; ii. Identification of specific opportunities for Green Urban Development interventions supported by thorough planning to take these opportunities forwards; iii. Institutional actions to regulate, enforce and protect assets in line with what is already in current policy and law and the development of more sophisticated measures to address ecosystem loss (World Bank, 2015).

2.3.7 Agriculture Agriculture accounts for about a quarter of Uganda’s GDP and a great proportion of exports. Nevertheless, the sector is marred by low levels of production and productivity, mainly driven by poor agronomic practices and the impacts of climate change. There has been a consistent increase in allocation of resources to the agriculture sector from UGX378.88 billion in the 2012/13 approved budget (out of the national budget of UGX10.90 trillion) to UGX484.68 billion (out of the national budget of UGX 17.95 trillion). However, this represented a decline in the percentage allocation to MAAIF from 3.4 percent to 2.7 percent in 2012/13 and 2015/16 respectively (NEPAD, 2015). Over the NDP II 2015/16-2019/20 period, the Government aims to increase agricultural exports to US$4 billion by 2020 from the US$1.3 billion in 2015 and reduce the number of the labour force involved in subsistence production from 6 million in 2012/13 (the majority of whom are women) to 3 million in 2019/20. In this regard, MAAIF’s key focus areas include: increasing production and productivity; addressing challenges in the selected thematic technical areas including critical farm inputs mechanization and water for agricultural production; improving agricultural markets and value addition in the 12 prioritized commodities: and and institutional strengthening for agricultural development. The Agriculture Sector Strategic Plan (ASSP) is the five-year strategy for the period 2015/16 to 2019/20. It defines the priorities and interventions to be implemented over the five-year period, in response to the national agricultural development priorities presented by MAAIF in the Agriculture Sector Issues Paper approved by the cabinet and subsequently incorporated into NDP II (NEPAD, 2015). Over the five-year implementation period, activity will focus on four priority areas: (a) increasing production and productivity; (b) addressing challenges in the selected thematic technical areas including critical farm inputs mechanization and water for agricultural production; (c)improving agricultural markets and value addition in the prioritized commodities; and, (d) institutional strengthening for agricultural development. The strategic agricultural commodities for the ASSP are: bananas; beans; rice; tea; coffee; cassava; fruits and vegetables; fish; cocoa; meat (beef, cattle, goats, poultry, and pork); Irish potatos; and oil palm and oil seed crops. 26 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH

2.3.8 Status of Policy and Financing Instruments for Green Growth Table 3 below highlights some of the major financing mechanisms and instruments currently employed for implementing the green economy in Uganda (UNDP and NEMA 2017). There are 14 instrument categories comprising: environmental taxes and levies; compliance charges; local government fees; resource rents; biodiversity, water resources and climate finance instruments; international funds; non-tax revenue; revenue and benefit sharing and resource access; conservation funds; energy standards and voluntary compliance for trade; subsidies; central government transfers; overseas development assistance (ODA); and private sector contributions. The instruments with the potential to generate the greatest financial resources include the environmental levy and tax, resource rents, energy standards and voluntary compliance for trade, central government transfers and private sector contributions. However, the contribution of these instruments to sustainable development is unclear even. Instruments such as biodiversity, water and climate finance instruments, conservation funds, and revenue and benefit sharing and resource access have enormous potential to bring benefits, particularly poor communities and smallholders. Public expenditure reviews conducted by the BIOFIN project (UNDP and NEMA 2017) indicate that the performance of local government fees, non-tax revenue, subsidies, compliance charges, and resource rents is neither effective nor efficient. Inadequate resources are collected and often the resources are not used to investment in restoration and sustainable management of natural capital; instead the resources are used in administrative and coordination actions, while the state of the resource declines. Consequently, the revenue streams have also been declining, to the point that they are unable to provide significant contributions to financing of the green economy targets set. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 27 Table 3: Sustainability Financing Opportunities Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy Environmental Taxes 1. Environmental Levy Public Finance Act Avoided pollution with The levy is included in the main fiscal Public 2015 heavy metals and chemicals Finance Act 2015. There is no evidence of its to wetlands, and water direct and indirect contribution to pollution catchments and air pollution management. Environmental taxes for oil and gas were proposed but are not yet activated in 2. Environmental Oil and gas Avoided pollution from spills, legislation or action Taxes revenue waste and industrial activities management policy (2008) Environmental compliance charges 1. Environmental EIA Regulations Compliance with national The charge systems are expected to be central Impact Assessmnet 1998, National environmental management to the national environmental fiscal reforms and (EIA) fees Environment Act standards administered by regulatory MDAs. Cap 153 A Public Expenditure Review (PER), conducted 2. Enforcement Fines National Penalties for non-compliance as part of the UNDP/NEMA BIOFIN ,project and Charges Environment Act with national environmental indicated that there are effectiveness and Cap 153 management standards efficiency concerns in terms of poor generation of revenue, and the allocation of funds to Water Act Cap 153 administrative activities and little investment in ecosystem restoration and management 3. Economic Revised National Incentive and disincentive (includes the pollution charges, water charges, Instruments for the Environment Bill options for environmental wetland charges, performance bonds, fines and Oil and gas Sector management for the oil and fees). Comprehensive design, governance and gas sector. M&E frameworks are needed. 4. Wetland User National Resource use regulation Very little is committed to actions undertaken at Permit Fees Environment Act charge levied on District Local Government level. Cap 153 communities and other wetland users. In turn the Some of the charge systems proposed here wetland users agree to are not active even though they have been compliance and enforcement proposed. Biodiversity offsets and economic support based on wetland instruments for the oil and gas sector are still user standards, including under design and have incomplete enabling penalties and restoration in legislation (National Environment Bill 2015). case of misuse. 5. Wetland National Penalties to comply to Restoration orders Environment Act national environmental Cap 153; Water management standards Act Cap 153 6. Biodiversity Offsets Revised National Compliance with national Environment Bill environmental management standards 7. Water abstraction Water Act Cap 152 Resource use regulation permit fees charge. Administered by the Directorate of Water Resources Management (DWRM) in MWE 8. Water source Water Act Cap 152 Compliance with national protection charge environmental management standards 28 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy 9. Effluent discharge Water Act Cap 152 Fees to discharge effluent, permits fees and compliance to national pollution discharge standards. Local Governments – District, City, Municipal, Town & sub-county fees 1. Clean Local Government Aimed at improving solid An extension of environmental fiscal reforms Development Act Cap 234 waste management and administered by a combination of MDAs and Mechanism producing high quality District Local Governments. Programme of organic manure for use Major governance failures have been cited for Activities (CDM on farms, also to achieve fisheries, and timber and wood fuel licences. PoA) municipal GHG emissions reductions. The PER (UNDP and NEMA 2017) highlights solid waste project CDM PoA can be used for effectiveness and efficiency concerns for these other Greenhouse Gas and instruments. Nonetheless, these instruments environmental challenges, are crucial to sustainable management of beyond waste management. natural resources and, when the natural 2. Fish levies for Fish (Beach Originally intended to limit resources and ecosystems are at optimal boats, fish mongers Management) fishing to sustainable levels. health, would be able to generate strong and fishing licences Rules, 2003 (S.I. The instrument has failed and finances for management of natural capital. No. 35 of 2003) instead increased fishing t Additional external funds may be needed to and also encouraged illegal support recovery of these instruments. These fishing practices would include investment from public-private funding arrangements. 3. Charges on National Forestry The charges are aimed at timber and wood and Tree Planting ensuring an accurate record fuel (licences to Act, 2003 of wood trade and to harvest timber or collect rents for the District produce charcoal, Local Governments movement permit) The instruments use inadequate measuring tools and the governance process has been abused, encouraging deforestation instead 4. Creation of Water Act Cap 152 The country is divided into catchment four water management Catchment management zones, sub-regional centres, Management organizations/ DWRM and catchments Guidelines committees created with local developing management structures. catchment management plans Resource Rents 1. Minerals and Oil Oil and gas Returns for resource An assessment (UNDP and NEMA 2017) shows and gas sector revenue extraction to government on that this instrument can be a major source resource rents & management behalf of citizens. of capital for national economic growth. royalties policy (2008) There are efficiency concerns with regard to minerals. However, the Government has Mining Act 2003 set up strong institutional and governance arrangements for oil and gas which may help strong recoveries. Similar arrangements are needed for mineral resources. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 29 Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy Biodiversity, Climate and Water Resources Finance Instruments 1. Payments for Proposed under Incentives for stewards of PES is a useful incentive, particularly for Environmental Revised National ecosystems and ecosystem biodiversity, water resources and carbon Services (PES) Environment Bill services for actions to mitigation action in landscapes with smallholder conserve functioning of farmers. These incentives may be invaluable ecosystem in enabling farmers to break even and as an instrument for forest landscape restoration, Wetland management, and soil and land management. However, it is still implemented on a very small scale, largely through NGO-led initiatives. There is very little public/private sector participation. International Funds 1. Green Climate UNFCCC in Investing in low-emission International finance is important in providing Fund (proposal) support of Rio and climate-resilient pilot and catalytic funding for new areas of Multilateral development. GCF global and regional goods such as biodiversity, Environment was established by 194 water, carbon sequestration, chemical Agreements governments to limit management, among others. or reduce greenhouse International finance is the primary finance for gas (GHG) emissions in biodiversity, water resources, climate change developing countries, and and chemical management action in Uganda. to help vulnerable societies adapt to the unavoidable International finance will continue to be impacts of climate change an important source of finance. However, e.g. wetlands management it is critical that these opportunities are appropriately pursued in terms of scale, 2. Global Convention Support implementation feasibility and viability. The utilization of Environment on Biological biodiversity conservation international finance has not always been viable Facility (Sustainable Diversity, UNFCCC, priorities in the NBSAPs in terms of ex-post evaluation (UNDP and NEMA Land Management, UNCCD 2017). This therefore renders their use expensive Territorial (especially loans but also including grants), Approaches to and unsustainable. These funds should only Climate Change, and only be used when they are feasible and Albertine Rift viable in ex ante and ex post evaluations and Sustainable an M&E framework should aid the governance Environment frameworks when the funds are unviable. Management etc.) 3. Emissions of UNFCCC, National Afforestation and Reductions for Forestry Policy reforestation activities in carbon–CDM, (2001), National Natural Forests voluntary carbon Forestry & Tree projects Planting Act, 2003 4. Emissions of UNFCCC, National Reduced deforestation and Reductions for Forestry Policy forest degradation carbon– REDD+ (2001), National Forestry & Tree Planting Act, 2003 5. Climate Investment Electricity Act Scaling up Renewable Energy Funds (CIF) 1999, in Low Income Countries Programme (SREP) Renewable Energy Policy, 2007 30 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy Non-Tax Revenue 1. Round wood National Forestry Sustainable production of These funds are part of economic instruments harvest fees for & Tree Planting timber for the country’s that should be included in the environmental plantations/ Act, 2003 needs in plantations fiscal reforms. Government institutions require stumpage fees strong governance frameworks to appropriate and sustainably use these instruments for the 2. Concessional Land National Forestry Increase sustainable good of the country. leases under Sawlog & Tree Planting production of timber to meet Production Grant Act, 2003 the country’s needs Poor use of these instruments can lead loss of Scheme (SPGS) finances, unsustainable harvests and loss of A subsidy to encourage benefit sharing opportunities with communities. commercial forestry production. Government of Some of the more successful schemes include Uganda and the European the revenue sharing schemes, the tourism Union funds packages, concessions for ecotourism and tourism gate fees. 3. Concessions for National Forestry Increase Public-Private- ecotourism & Tree Planting Partnership and private Act, 2003, Wildlife investment in conservation Act, 2014 4. Gate or entrance Uganda Wildlife Obtain revenues for running fees Act Cap 200 institutions and manage numbers of visitors Uganda Wildlife Education Centre Trust Deed of 1994 National Forestry & Tree Planting Act, 2003 5. Tourism packages Uganda Wildlife Obtain resources for fees (hot springs, Education Centre managing biodiversity under mountain climbing, Bill jurisdiction of institution birding, boat launch, bush camping, caves, chimp tracking, cultural encounters, gorilla tracking, etc. National Forestry Provide tourists and visitors & Tree Planting with a quality service and Act, 2003 experience 6. Revenue Sharing Enhance community with communities participation in forest near Protected Areas conservation and (Pas) conservation of protected areas e.g. National Parks 7. Commercial The Animal Raise revenue to maintain activities (semen, Breeding Act, livestock diversity in the eggs, ova, embryos). 2001 country National Raise high quality breeds Agricultural and stocks for distribution to Research farmers Organisation Act, 2005 THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 31 Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy Revenue, Benefit Sharing and Resource Access 1. Collaborative forest National Forestry Enhance community These are opportunities for communities to management and Tree Planting participation in forest use products from conservation areas. These arrangements Act, 2003 conservation and products are under-used because of concerns or collaborative conservation of protected over overexploitation. Uganda Wildlife resource areas e.g. National Parks Act Cap 200 Improved sustainable exploitation models are management Benefit sharing of ecosystem needed for sustainability of the conservation services within tourism or areas. An area requiring more environmental production zone in the PA. economic analysis and modelling. 2. Wetland user National Enhance community and committees Environment Act sustainable use of wetland Cap 153 resources National Wetland Limit degradation from Policy, 1995 encroachers Conservation Funds 1. Uganda Proposed under Provide a funding pool for Conservation funds are generally very successful Biodiversity Revised National all biodiversity conservation but also very small schemes that are generally Conservation Fund Environment Bill actions in the country controlled by non-governmental organiszations. Uganda Wildlife Formal government and private sector Act Cap 200 participation is needed to scale up the benefits for ecosystem stewards (communities). 2. Bwindi Mgahinga Uganda Wildlife Provide incentives for Conservation Fund Act Cap 200 communities to contribute The funds have great potential for generating to Mountain Gorilla community benefit. They can easily be used for Conservation in Bwindi scaling up forest landscape restoration, wetland Impenetrable and Mgahinga restoration, soil and land management actions Gorilla National Parks and climate change mitigation and adaptation actions. 3. Community Uganda Water Act Support Forest Landscape Environment Cap 152 Restoration and catchment Conservation Fund management through National Forestry providing livelihoods for and Tree Planting integrated water resources Act, 2003 management (IWRM) 4. EBA Climate Proposed under Adaptation through Adaptation Fund Revised National landscape restoration for Mt. Elgon Environment Bill activities and supporting Ecosystem agricultural livelihoods and proposed Climate soil and water conservation Change Act practices 5. Carbon Bank Uganda NGO Reforestation actions and for Mt. Elgon Registration Act, establishing a fund to Ecosystem 1989 buffer carbon sequestration mitigation for verified emission reductions under the Plan Vivo Standard 32 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy Energy standards and compliance programs 1. ISO 50001 Voluntary, Using energy efficiently helps These are private sector oriented schemes. The consensus-based, organizations save money as Global Energy Transfer Food-in-Tariff (GETFIT) market-relevant well as helping to conserve programme in Uganda has proved invaluable International resources and tackle climate in scaling up private sector investment in Standards. change renewable energy schemes. It is one of the most successful financing schemes as it is based on 2. Comprehensive Energy Policy Increase private sector matching marketing demand for electricity with Feed-in-Tariff (FiT) 2002 Renewable investment in electricity production and supply. policy Energy Policy generation 2007, ISO standards are very comprehensively used in Increase renewable energy export value chains for coffee, tea, cocoa, fruits Electricity Act options as a means of and vegetables. These standards are successful. 1999 generating sustainable energy However, the performance of national standards and other standards under fair trade, sustainable production has been subpar. Subsidies 1. Support for paddy National Conversion of wetlands for Subsidies are a burden to national fiscal policy. rice farmers Agriculture Policy, paddy rice ensures higher Yet when these schemes are designed as for increased 2013 productivity for rice economic incentives rewarding sustainable production behaviour they may not be subsidies. For Agriculture Sector Clearing of trees for upland through seed, example the GETFIT programme design is Development rice production also leads to fertilizers and financially and economically viable and ceases Strategy and biodiversity loss extension support to be a subsidy. Investment No compliance actions Plan 2010/11 – Soft compliance support is also often a undertaken 2014/15 worthwhile subsidy to support regulatory processes. 2. Soft compliance Water Act Cap 152 Training of effluent support, through discharging industries on Subsidies on use of public lands for National infrastructure development and for boosting trainings proper effluent management Environment Act agriculture must set a high standard of and cleaner production Cap 153 feasibility and viability before they are practices. The aim is to reduce effluent discharge supported. Therefore due diligence to meet all into water catchments, environmental, social and economic safeguards wetlands and on land. must continually be maintained as is the case under current regulation. 3. Construction of The National To reduce the cost of A governance system is needed that identifies roads and other Transport Master compensations, sections and halts subsidy financing where perverse infrastructure (roads Plan, Uganda of road go through public incentives that damage the environment and railways) through National Roads lands of wetlands without (construction in wetland, waste discharge in wetlands Authority Act, compensation river systems, poor inorganic fertilizer use) occur. 2006, The Instead the financing should be passed to Interferes with due diligence Roads Act, projects that generate positive externalities. compliance actions under 1964, Railways EIA and Environmental Corporation Act Audits, as well as Wetland Use Cap 331 Guidelines, and Catchment Management Guidelines 4. Provision of National Increase agricultural agricultural fertilizers Agriculture Policy, productivity through to farmers under 2013 supplying fertilizers. If the NAADS <spell out> to fertilizers are poorly used this Agriculture Sector increase agricultural could lead to leaching and Development productivity washing away of nutrients Strategy and with storm water in rivers, Investment wetlands and lakes Plan 2015/16 – 2019/20 THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 33 Policy/ financing Legislation and/ Sustainability Outcome Performance of instrument instrument or policy Central Government 1. Central Public Finance Government transfers funds The Government makes annual commitments Government Management Act, to local government for to support local government financing including Transfers 2015 salaries for local government to environmental and natural resources staff, to MDAs for salaries management actions. The financing is pegged of their staff, and under the to the success of national tax collections. Poverty Action Fund (PAF) for Similarly, the Government has committed to use environment management national revenue collections to support forest 2. African Forest National Forestry The Government of Uganda landscape restoration. The latter action is still Landscape & Tree Planting has promised to restore up under planning and design. Restoration Act 2003 to 2.5 million hectares of Initiative degraded and deforested National Climate landscapes by 2030. Change Policy, 2013; UNFCCC Overseas Development Assistance 1. Farm Income National Forestry Forest restoration on private There are several ODA investments in the Enhancement & Tree Planting land and restoration of country. However, the MERECEP - East African & Forest Act, 2003 wetlands Community and FIEFOC - Government of Conservation Uganda/ European Union, represent some of Project (FIEFOC) the major natural capital investment projects. Others examples include the Lake Victoria 2. Mt. Elgon Region Lake Victoria Restoration and sustainable Environment Management Programme (LVEMP). Environment Basin Commission management of the key These funds are also part of international Conservation Protocol water catchments for Lake financing; however, they have a strong co- (MERECEP) Victoria financing and public sector implementation Treaty for establishment of role. The success of these interventions is based the East African on ability to maintain a strong governance Community, 1999. and M&E process to sustain high levels of environmental, social and economic benefits. The Government needs a threshold for viability of these projects and programmes. Private Sector 1. Corporate Social Private Giving back to consumer Private sector financing has been observed in Responsibility corporate social communities and participation in sustainable value chains as well (Coca Cola, responsibility contribution to poor as supporting conservation funds that have Standard Bank funds, corporate communities’ welfare strong community benefits. Uganda, Standard outreach The role of private sector in the green economy Chartered Bank, needs to be harnessed through strong MTN, Airtel, URA) awareness creation, and more importantly 2. Catchment Investment pack Catchment restoration design of opportunities where the private sector Management in reducing activities to reduce siltation can participate. financing (Coca operational costs in the water, mudslides and Cola, Bugoye ending of operations that Hydropower, KCCL, lead to revenue losses Hima Cement. 3. Certified organic National Producing food in a complete agriculture and Agricultural Policy, cycle with minimal external Sustainable 2013 inputs and compliance with Agricultural high organic standards Draft Organic Commodities Agriculture Policy Source: UNDP and NEMA 2017. 34 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH

2.4 Opportunities for Green Growth and Development in Uganda

2.4.1 Agriculture Agriculture is the main source of livelihood in Uganda with 72 percent of the working population engaged in the sector in 2012/13 (UBOS 2014) and accounting for about 22 percent of the national GDP. There are over 5.2 million agricultural households in the country, over 97 percent of whom are engaged in generally smallholder subsistence farming. Commercialization in agriculture remains low, with only about 119,000 or 2.3 percent of the 5.2 million farming households being engaged in commercial farming (NEPAD 2015). Productivity in the agriculture sector is still low, mainly driven by inadequate water for production, limited access to appropriate technologies, declining soil fertility, poor farming methods (i.e. limited use of high yielding seeds, manure or fertilizers), lack of required skills and poor farm to market infrastructure. Agriculture is also highly vulnerable to exogenous factors, including low prices and climate change. These challenges present three entry points for green growth interventions. Enhancing availability and access to Water for agricultural production Currently only 31,000 households practice irrigation, with shallow wells (44 percent) being the most frequently used source, followed by gravity flow (16 percent) and deep well systems (13.5 per cent ). The other sources of irrigation water are water harvesting (5.6 percent, pumping from surface water systems or ponds (3.5 percent ), municipal water supply (2.4 per cent ) and others (12 percent). The main source of irrigation therefore is ground water followed by surface water systems and very modest use of rainwater harvesting. It is estimated that only 15,150 ha of land are fully irrigated and only 8,656 ha are fully equipped for irrigation. Approximately, 36,000 ha of agricultural land are drained for agricultural production purposes. The national target for irrigation potential is a modest 567,000 ha, based on two land types. Irrigation potential area Type A lies close to surface water resources where irrigation water can be drawn from, while Type B lies further from surface water systems and would require considerable investment in bulk storage and transfer from bulk storage. Since 2010, rainfall variability in Uganda alone has caused crop yield losses worth an annual equivalent of US$6 billion/year (MWE 2015). These shortcomings present an opportunity to adopt a green growth approach. The next chapter on the strategic direction details appropriate green growth strategies and interventions for adoption over the UGGDS period. i. Soil and Fertility Management Fertilizer use in Uganda is estimate at a meagre 1.5kg/ha/year, which is way below the regional and Sub- Saharan Africa averages. Green growth agronomic practices can go a long way in complementing existing sustainable land management practices to enhance soil fertility. ii. Value chain upgrading The value chain describes the full range of activities that are required to bring a product from its conception to its end use and beyond. This includes activities such as design, production, marketing, distribution and support to the final consumer (Kaplinsky and Morris 2001). Upgrading refers to the acquisition of technological THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 35 capabilities and market linkages that enable firms to improve their competitiveness and move into higher- value activities (Kaplinksy and Morris 2001). Upgrading in firms can be through process upgrading, product upgrading and functional upgrading. Uganda’s agriculture sector has gaps at various segments of its value chain and the UGGDS presents an opportunity to address these loopholes in a sustainable way. Numerous examples of formalized value chains including outgrower schemes and commodity production and processing export value chains in Uganda have pointed out that their success in enhancing the premium earned by farmers is often based on knowledge, learning and sustainability including commodity price stability (Gibbin 2006). The strategic interventions have to be designed based on two clear steps. A first step is to spell out the rewards. These rewards include stable and higher market values because of the consistency of quality and quantity supplied. A second step is to outline the preconditions or mechanisms for achieving this; that is the actions required, including market diversification, excellence in manufacturing and effective use of knowledge acquired from within the value chain (Gibbon 2003). Basis for upgrading the value chain There is strong evidence of rewards through value addition in Uganda’s value chain. The USAID Feed the Future project has leveraged an additional US$3 million of new private investment for value addition actions. The investment resulted in US$7.5 million in income earned by Feed the Future farmers in FY2014 from agricultural product sales. Up to 213,000 producers are using new technology and practices on 91,300 ha, while 258,000 children under five years achieved standard nutrition with help from the project. (USAID n.d.). By 2015, imports of agro-processed goods in the country were worth UGX 770 billion (Table 4). Many of the imported products can be processed within the country, which would save important foreign exchange and also build competitiveness to expand access to these products and to export within the region. Uganda would be able to produce raw materials for the domestic agro-industry and contribute to forward economic linkages by virtue of exports while also reducing imports of agricultural raw materials and building backward linkages in the economy. Table 4: Million UGX of imports, between 2011 and 2015 Imports 2011 2012 2013 2014 2015 Live animals other than fish 2,254 2,494 1,907 3,714 3,737 Meat and meat preparations 3,241 2,861 2,547 2,591 2,753 Dairy products and birds eggs 5,578 5,794 5,805 6,514 5,047 Fish, crusteceans, molluscs and preparations 2,768 3,762 2,410 3,616 2,256 there-of Cereals and cereal preparations 231,112 306,732 247,365 273,862 198,016 Vegetables and fruits 16,685 16,434 14,812 20,915 20,192 Sugars, sugar preparations and honey 136,345 160,930 146,961 110,340 102,904 36 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Imports 2011 2012 2013 2014 2015 Coffee, tea, cocoa, spices and manufactured 8,352 8,020 7,742 25,191 22,049 thereof Miscellaneous edible products and preparations 40,308 39,513 39,133 42,216 42,109 Feeding stuff for animals (not including un- 1,833 2,271 4,010 4,715 6,973 milled cereals) Beverages 37,367 40,674 44,185 48,528 43,307 Tobacco and tobacco manufactures 14,018 11,256 9,428 10,398 9,840 Hides, skins raw 796 1,450 2,433 4,391 5,663 Oil seeds and oleoaginous fruit 1,378 1,549 2,420 2,267 2,301 Crude animal and vegetable materials 6,201 7,097 6,091 6,929 11,401 Animal oils and fats 203 361 418 160 499 Organic chemicals 66,061 93,369 102,357 85,745 91,359 Fixed vegetable fats and oils, crude, refined, 228,959 236,060 217,041 253,077 198,399 fractioned Animal, vegetable fats and oils processed, waxes 27,699 26,544 2,880 4,885 2,050 Total 831,158 967,171 859,945 910,054 770,855 Source: UBOS 2016b. The food processing and marketing sector has been an important driver of growth in Uganda. Whereas Uganda has been pushing for technologies affecting supply, the most important immediate step is to draw on technologies that will promote agricultural development from the demand side. These are a) processing, packaging, marketing and retailing; and (b) targeting domestic and regional markets. Value development in agriculture requires supporting and promoting agro-processing (Bwire and others 2016). Agro-processing has strong linkages with the agriculture sector which employs more than 66 percent of Uganda’s workforce. Currently the inter-linkages in the economy are low especially between agricultural sector and the rest of the economy. A key driver for boostinb productivity in agriculture is by promoting agro-based demand-driven agriculture output. Revamping agriculture will require a holistic approach, including strengthening its linkages to other sectors especially focusing on import substitution of imported intermediate agricultural foods (Bwire and others 2016).

2.4.2 Natural Capital Management a. Tourism and the Wildlife Sector: Tourism accounts for 9 percent of national GDP and 26 percent of earnings from exports of goods and services. The tourism sector still faces serious challenges. At a regional level, security threats and disease outbreaks such as Marburg, lead to negative media and adverse travel advisories. Other challenges include poor air transport and inadequate hospitality industry skills. Consequently the number of visitors to key tourism locations has declined. Despite the increase in visits to National Parks from about 203,000 visitors in 2014 to 216,000 visitors in 2015, there has been a 13 percent decline in the number of foreign non-resident visitors to the national parks over the same THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 37 period. In FY 2016/17, the Government allocated UGX 188.8 billion to the sector, up from UGX 158.5 billion in FY 2015/16. In Uganda, tourism is one of the sectors that automatically conserves biodiversity since it is its main attraction. There is empirical evidence that tourism has a very high rate of return in Uganda given the meagre budget allocations and high economic contribution through foreign exchange returns. Adopting a green growth approach towards tourism management will not only prolong the flow of these revenues but also ensure their equal distribution. To this end the UGGDS has proposed strategies and interventions outlined below. b. Forestry: According to national statistics Uganda’s forest land cover declined to 2.6 million ha of forest land in 2010, and to 1.96 million ha in 2015 from a forest area of 4.9 million ha in 1990. This is a reduction of 57 percent in just 25 years (MWE 2016). As recently as 2005, Uganda had a total of 3.6 million ha of forest land compared to 4.9 million ha in 1990, a reduction of 30 percent over a period of 15 years. The rate of loss accelerated between 2005 and 2010 to, 6.4 percent per annum, from 3 percent between 2000 and 2005. The rate of forest loss seems to have declined to 2.2 percent per annum between 2010 and 2015, but most of the damage has been done. Through the green growth approach, direct investments into ecosystem restoration to reduce deforestation and degradation can be undertaken. However, the bulk of forestation needed is on private land and the converted forest land is now used for agriculture, settlements and grasslands, among others. While reforestation is required, the catalytic investment is seeking the appropriate incentive for forestry on private land. Agro-forestry investments have been identified as the entry point for forestry on private land. c. Wetlands: Wetlands as measured in 2010 cover approximately 8 percent of the land surface area, down from 15.6 percent (37575) km2 in 1994 ( UNDP and NEMA 2017). Despite the presence of the wetland policy and the institutional framework, wetland degradation continues at a relatively high rate. For instance, the wetland catchment area around Lake Victoria alone shrank by more than half, from 7,167.6 km2 in 1994 to 3, 310.km2 in 2008. The wetland catchment of Lake Kyoga has also fallen from 15,008.3 km2 in 1994 to 11,028.5 km2 in 2008 (Aryamanya- Mugisha 2011). Wetlands in Uganda provide a wide range of tangible and non-tangible benefits. The tangible benefits include water for domestic use and watering livestock, support to dry season agriculture, provision of handicrafts, building materials, food and medicines. The non-tangible benefits include flood control, purification of water, maintenance of the water table, micro climate moderation, storm protection (Kakuru and others 2013). The total economic contribution of wetlands in three agro-ecological zones of Uganda is estimated at US$10,948; US$10,388 and US$11,358/ha/year. Uganda has 12 sites designated as wetlands of international importance (Ramsar sites)within a surface area of 454,303 ha. The Ramsar sites are also important bird areas and attract hundreds of birders from across the world and from within the country. Uganda’s Ramsar sites are located along the Lake Victoria Crescent, in Southwestern farmlands and rangelands, in the Albertine rift of the East African Rift valley along Uganda’s border with the Democratic Republic of Congo (DRC), and the Lake Kyoga Basin (Byaruhanga, Opige, and Mafabi 2008). The Ramsar sites include: Lake Victoria crescent: Sango Bay; Lutembe Bay; Mabamba Bay; Nabajjuzi and Lake Mburo wetlands; Southwestern farmlands and rangelands; the Lake Mburo Nakivali wetland system joining Rivers Katonga and Rwizi which drain into the north-western part of Lake Victoria; the Albertine Rift landscape; Lake George and Murchison-Albert delta wetlands; Lake Kyoga basin; Lake Nakuw; Lake Bisina and Lake Opeta wetlands. 38 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH d. Water resources: Surface water resources: The internal renewable water resources in Uganda, that is, the average annual river flow generated from precipitation over the country but excluding the impact of the major lakes, amount to 15.6 km3/yr. The sum of the external and internal renewable water resources in Uganda is 43.3 km3/year while the dependency ratio, i.e. the proportion that originates outside the country, is about 69 percent. Therefore, management of trans-boundary water resources flowing from Kenya, Tanzania, and Rwanda under the Nile basin and Lake Victoria basin are critical. Groundwater: The estimated quantity of renewable groundwater generally exceeds the projected demand for domestic water supply in non-National Water and Sewerage Corporation (NWSC) areas by a considerable margin and the sustainable utilization rate projected to the year 2030 is below 15 percent in most districts. It is recognized, however, that local shortages may arise, particularly in areas with a high population density. Local shortages may also arise as a result of water quality considerations. Given that the average annual recharge ranges from 19.1 to 39.9 mm, the use of groundwater in Uganda for supplementary irrigation is limited to localized projects on a relatively small scale. Groundwater can safely provide a substantial part of the water needed for livestock (based on the 2008 estimate of livestock numbers) but caution is required in the Kaabong and Kotido districts. Water Quality: The most important water quality problem is bacterial contamination of both groundwater and surface water resulting from inadequate sanitation facilities, and this highlights the importance of improving sanitation. Problems associated with groundwater, usually localized, include corrosiveness, turbidity, and high concentrations of iron, chloride and fluoride. In many places the concentrations of bacteria are so high that even bathing is not recommended and could even be dangerous. Eutrophication resulting from excessive quantities of nutrients reaching water bodies can cause algal blooms that may lead to oxygen deficits and fish kills, or promote the excessive growth of weeds such as water hyacinth. Contamination by hazardous chemicals from industries and agriculture is still at low levels in Uganda, but they could damage health locally. Soil erosion is mostly a localized problem in Uganda, being concentrated in the Mt Elgon, Rwenzori, and southwestern regions. Climate Change: Climate change is expected to increase climatic variability by shifting and intensifying extremes, which could lead to more severe drought and flood events. Climate change adaptation requires a multi-sectoral approach using the integrated water resources management IWRM guiding principles. Interventions to improve adaptations to climate change particularly need to consider no regret actions (i.e. actions likely to lead to net benefit whether or not impacts of climate change occur), and non- structural actions (i.e. actions that do not involve infrastructure or major asset investments) to avoid large and perhaps risky investments, along with demand management. Hydropower: The hydropower potential along the Victoria and Kyoga Nile amounts to 2,400 MW, of which 630 MW is operational. Power generation at the Kiira-Nalubaale facilities has been below installed capacity because of low lake levels in recent years and the subsequent reduction in the volume of water released from Lake Victoria. This emphasizes the importance of maintaining high water levels in the lake in order to maximise hydropower production. Lake Victoria serves as the principal reservoir for the cascade of hydropower projects along the Nile. As the potential sites downstream of Lake Victoria have a limited storage capacity they are operated on a run-of-river basis. The same applies to facilities that might be developed on the Kyoga Nile. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 39 Domestic Water Demand: The national urban water coverage was estimated to be 66 percent in 2008 while the coverage in rural districts (2009) ranged from 24 percent to 100 percent . The corresponding domestic water demand amounts to 191 million cubic metres/year in rural areas and 73 MCM/year in urban areas. The expectation that coverage will have reached 100 percent in both urban and rural areas by 2030 means that the annual domestic water demand will be 326 and 342 million cubic metres/year for rural and urban areas, respectively. Consequently, the total consumption of potable water is estimated to be 668 million cubic metres/year in 2030. Industrial Water Demand: The present and expected future industrial consumption of water in Uganda is relatively small compared to other uses like domestic water supply or (potential) irrigation. Of greater concern than the actual volume consumed is the potential impact of wastewater, especially if untreated, on the environment and water quality in lakes and rivers.

2.4.3 Planned Green Cities Whereas the current growth rate in urban population is 5.6 percent per year, only around 14-16 percent of the population in Uganda live in urban areas (UBOS 2014; Hashemi and Cruikshank 2015). Africa is experiencing the highest rate of urban growth in the world. All African countries, (excepting East African ones), have an urban population of 40 per cent or more (Hashemi and Cruickshank, 2015). Table 5: Urban and rural populations and rates of annual change Area/ Urban Rural Proportion urban country 1990 2014 2050 1990 2014 2050 1990 2014 2050 Population millions (%) World 2,285 3,880 6,339 3,036 3,364 3,212 43 54 66 Africa 197 455 1,339 433 683 1,055 31 40 56 East Africa 36 97 378 163 287 490 18 25 44 Uganda 1.9 6.1 33.4 15.6 32.7 70.7 11 16 32 Source: Hashemi and Cruikshank 2015. In March 2016, there were 289 urban centres3 in Uganda as shown in Table 6. These include one Capital City, 33 Municipalities, 163 Town Councils and 62 Town Boards.4 The urban population has been increasing over time from about 1.7 million in 1991 to nearly 7.4 million in 2014 (UBOS 2016). The 27 leading urban centres, with a population of more than 50,000 persons, collectively host 62 percent of the urban population of Uganda. On the other hand, 229 gazetted urban centres with a population of 25,000 persons or fewer constitute only 38 percent of the total urban population. 3 In Uganda, the definition of urban areas has been changing over time. The 2002 and 2014 Censuses defined urban areas to include only the gazetted urban centres. However, the 1991 Population and Housing Census defined urban areas to include gazetted urban centres and ungazetted Trading Centres with a population exceeding 1,000 persons. 4 This report will count cities as referring to both the capital city and municipalities, unless otherwise indicated. 40 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Table 6: Number of urban centres by type and urban population, 1991 - 2016 Type of urban centre 1991 2002 2014 Number Population Number Population Number Population Cities 13 774,241 1 1189142 34 1507080 Municipalities 13 480,922 13 745,036 33 3,249,609 Town Council 33 338,901 61 1,065,209 163 2,361,033 Town Board/Township 20 75,589 20 na 62 308,142 Total 67 1,669,653 75 2,921,981 289 7,425,864 * urban population for 2002 excludes population enumerated for town boards, urban centres are 2016 while the population is as 2014. Source: UBOS 2016. The Uganda Vision 2040 proposes four regional cities and five strategic cities in the course of Uganda’s urbanization. They include the capital city Kampala, the regional cities of Gulu, Mbale, Mbarara, and Arua, and the strategic cities of: Hoima (oil); Nakasongola (industry); Fort Portal (tourism); Moroto (mining); and Jinja (industry) (GoU 2013). The major concern for cities in Uganda are: i. Insufficient competitiveness to produce internationally tradable goods and sufficient productive jobs. The cities tend to produce more non-tradable goods, such as electricity, water supply, public services, hotel accommodation, real estate, construction, local transport, and goods with high transport costs such as gravel and country-specific goods, especially food items (World Bank 2015; Gollin, Mugyenyi and Sen 2016). ii. Naturally produced tradable goods such as agricultural commodities and processed products, processed metal and raw materials, produced products such as shoes and textiles, and other products such as cement, and sugar etc, are modest in value and enjoy a limited market share compared to imported goods. iii. The skewed balance means that the formal sector is unable to grow sufficiently to create jobs and invoke economic multipliers. iv. The limited growth in the tradable sectors also leads to limited labour mobility from the rural agricultural economy to industries. v. Ugandan cities have not kept pace with needs for new infrastructure and housing and this has led to high rates of spatial expansion and unplanned growth due to lack of integration of spatial and sectoral planning. vi. Often the problems arising in spatial planning are associated with fiscal constraints and low capacity among city authorities. vii. The poor spatial planning affects access to basic services of water and sanitation, housing, and causes poor mobility/transportation within the city, among other problems.

2.4.4 Sustainable Transport Uganda’s transport system is not diversified in terms of options and currently relies on high-emission vehicles for road transport, marked by the majority 14-passenger commuter taxis. Options such as railway and water transport are still underdeveloped though with enormous potential. All these shortcomings foster THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 41 inefficiencies in economic transformation with negative consequences for the social and environment aspects of development. Transport prices on international roads from Mombasa to Kampala average US$0.08 per km, twice as much as Brazil, China, France and the United States. Average transport prices on tarmac are about US$0.12-US$0.15 ton/km while on feeder roads they reach US$0.3-US$0.4 per ton/km. The high transport prices inflate input prices and depress output prices at the same time, discouraging farmers from adopting input-intensive technologies. Transport prices are less of a constraint for high value crops such cotton, coffee, fruits and vegetables, but they are a major constraint for producing and marketing bulk commodities, especially staple food crops (World Bank 2010). Overall, Ugandan farm to market transportation costs were estimated to be four to seven times those in the United States (Gollin and Rogerson 2010), reflecting high levels of inefficiency, something the green growth model seeks to address. Therefore, sustainable transport solutions are needed. Sustainable transport refers to the capacity to support the mobility needs of people, freight and information in a manner that is competitive in price and least damaging to the environment. There are two sides to transport – managing transport demand and improving transport supply. Transport systems can adapt to cope with transport demand and reach a better level of sustainability (Rodrigue, Comtois and Slack 2016) by devising means/ strategies to manage (reduce) transport demand for passengers and freight as well as to redistribute this demand in space and time when possible. On the other hand, when transport is profitable, inexpensive and unsubsidized, that us a good indicator of sustainability. According to Gollin and Rogerson (2010), regional evidence in Uganda shows that agricultural price dispersion associated with transportation costs is high. High transportation costs represent an important force in shaping the allocation of labour. High transport costs also create an incentive for individuals to locate so as to minimize transportation costs for those goods that are most important to them. Since agricultural goods are relatively important in poor economies, this leads to a greater share of the population remaining in agriculture (Gollin and Rogerson 2010). The predominance of subsistence agriculture can also be explained by this, since people who locate in remote areas in order to be close to their source of food will necessarily engage in little trade for other goods precisely because of the high transport costs. The clear implication is a need for sustained investments in transport infrastructure, especially railway and road transport, providing for increased multi- modal transport systems. The main transport challenges for urban areas are expanding and improving transportation supply in such a way that private vehicles have alternatives, increasing public transit infrastructure by improving existing public transit services, and by making cities friendly to pedestrians and non-motorized vehicles. (Rodrigue, Comtois and Slack 2016). The sustainable transport alternatives will contribute by reducing the energy intensity of vehicles and carbon intensity of fuels, reducing high density and agglomeration, providing context appropriate transport and options for non-motorized transport modes. The opportunities for Ugandan cities include Bus Rapid transport (BRT), Light Rail Transport (LRT) and multimodal transport systems.

2.4.5 Energy for Sustainable Livelihoods and Development Uganda’s current energy balance comprises biomass, 88.9 percent (firewood 78.6 percent, charcoal 5.6 percent and agricultural residues 4.7 percent), petroleum products 9.7 percent, and electricity at only 1.4 percent of the total national energy balance (MEMD 2015). Most of the fuel wood is used for cooking, utilizing the highly inefficient three stone cook stoves in the rural areas where most of the population lives. 42 THE CHALLENGE AND OPPORTUNITY OF GREEN GROWTH Uganda has a heavy reliance on renewable energy sources for electricity. By 2015, the installed capacity for electricity was 695 MW for hydro power, 64.5 MW for baggase, and 136 MW for thermal electricity, the only non-renewable source. Installed capacity of electricity power plants increased by 1.2 percent in 2015 from 885 MW in 2014 to 895.5 MW in 2015. This was due to a 19.4 percent increase in the installed capacity of bagasse electricity from 54 MW in 2014 to 64.5 MW in 2015 (UBOS 2016b). In December 2016, the Government announced the start of operation of a 10 MW solar plant in Soroti District (ERA 2016b). The plant is made up of 32,680 photovoltaic panels and is country’s first grid-connected solar plant and will generate clean, low-carbon, sustainable electricity for 40,000 homes, schools and businesses. Like all other small renewable electricity generation projects, the Soroti Solar Energy project was developed under the Global Energy Transfer Feed in Tariff (GET FiT). The power plant has the potential to increase its net output capacity by a further 20MW of solar energy. Uganda’s renewable energy electricity base was estimated at 5,300MW and it comprises large hydro of over 2000MW, mini-hydro at 200MW, solar energy at 200MW, biomass at 1,650MW, geothermal at 450MW and peats at 800 MW. The country’s targets under Vision 2040 and NDP are indicated in Table 7 below. Table 7: NDP and Vision 2040 electricity targets Year 2010 2015 2020 2025 2030 2035 2040 Consumption (KWh/capita) 75 674 1,273 1,872 2,470 3,069 3,668 Capacity (MW) 425 3,885 8,601 14,670 22,222 31,252 41,738 Source: GOU 2010 NDPI. Under the Electricity Regulatory Authority (ERA) Strategic Plan 2014/15– 023/24, ERA is working with other Government agencies and development partners under the GETFIT initiative to accelerate renewable energy development including hydropower, solar, wind and biomass technologies. The initiative provides a top-up premium in the range of UScents 0.5-2.0 cents/kilowatt hour on the Renewable Energy Feed-in-Tariff (REFIT). It also provides a guarantee scheme to enhance the bankability of the projects. The first tranche of projects with a cumulative generation capacity of 150MW is being targeted to be brought into production within the next three years (ERA 2014). Whereas Uganda has potential for expanding renewable energy, thermal and peat, the electricity energy demand highlighted in the Vision 2040 and NDP will exceed this potential. The Government therefore, in April 2015, approved the Nuclear Power Roadmap Development Strategy. It comprises five scenarios, which in terms of cost-effectiveness suggest that a high scenario targeting 2,300MW to be commissioned in 2028 is most cost-effective even though the Vision 2040 target would be 30,000 MW by 2026. Given the large capital outlay required, of US$205 billion, before 2026, it is evident that the plan for Vision 2040 may have to be achievedby some other means. The Grid Development Plan case, although less cost-effective than the high case scenario, is a worthwhile compromise and the target for Vision 2040 can be met either through alternatives to nuclear energy and/or through scaling up the GDevP case. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 43 Table 8: Proposed nuclear generation plan Scenario Number Installed First unit Total Cost of Units Capacity Year of expenditure effectiveness (MW) commissioning needs (US$ million US$/ million) MW Base case 2 2,000 2031 12,031 6.0 High case 2 2,300 2028 6,007 2.6 Low case 1 1,000 2034 14,190 14.2 Grid Development Plan 2 3,030 2027 18,614 6.1 (GDevP) 2013 - 2029 Case Vision 2040 20 30,000 2026 205,238 6.8 Source: MEMD 2015. UgandaVision 2040 proposed an electricity energy mix comprising hydro (4,500MW); geothermal (1500MW); nuclear (24,000MW); solar (5,000MW); biomass (1,700MW); peat (800MW) and thermal (4300MW) (GoU 2013). 44 GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK 3 GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK

3.1 UGGDS Strategic Direction The UGGDS strategic direction is defined by five priority areas which are aligned with ongoing development initiatives proposed by the Uganda Vision 2040 and NDPII(2015/16-2019/20). The focus areas are envisaged to support the intended transition to a greener economy. a. Vision The UGGDS adopted the national vision statement (Vision 2040), which is for “a transformed Ugandan society from a peasant to a modern prosperous country within 30 years”. The strategy will be implemented as an integral part of Vision 2040, NDP II and specifically the 10- year long-term national development plan for 2020/21- 2030/31. b. Purpose: The UGGDS serves as a framework and/or guidance tool that aims at catalyzing economic growth through the efficient use of the country’s natural, human, and physical capital in an inclusive manner along a low emissions development pathway. c. Goal: An inclusive low emissions economic growth process that emphasizes effective and efficient use of the country’s natural, human, and physical capital while ensuring that natural assets continue to provide for present and future generations. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 45 Objectives 1. Accelerate economic growth and raise per capita income through targeted investments in priority sectors with the highest green growth multiplier effects; 2. Achieve an inclusive economic growth with poverty reduction, improved human welfare and employment creation; 3. Ensure that the social and economic transition is achieved through a low carbon development pathway that safeguards the integrity of the environment and natural resources. Conceptualization of the five Priority Areas The UGGDS was designed to provide cohesion between the targeted investments and the green growth development outcomes. On the demand side, industry and cities are expected to drive the demand for increased raw materials from agriculture and natural resources, the supply side of the economy. Policies to promote green and planned cities and stimulate industry will promote value-added tradable goods that will increase opportunities for waged employment, and provide a return for the private sector as well as raising average incomes. Cities and industry will be able to create sustainable market opportunities and innovation to serve markets for processed goods and value-added services. Physical planning for cities will optimize the efficiency of the cities (food, access to utilities, clean environment, planned infrastructure among others) and industry (efficiency, high productivity innovativeness) to spur a synergized green economy. Supply side injections for the natural capital sectors will focus on increased production and productivity linked with opportunities pursued alongside the planned investments in infrastructure, industry and cities. The additional forward and backward linkages will increase the purchase of local raw materials, enhance the opportunities for domestic and international tourism, increase productivity and efficiency and minimize slack in production, distribution and consumption through the better performance of value chains Figure 2: Flow process of the Green Growth framework in Uganda 46 GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK

3.2 Green Growth and Development Strategies The goals and objectives of the Uganda Green Growth Development Strategy will be implemented through five prioritized areas whose selection was informed by studies that detailed the development areas with the highest green growth potential. 1. Sustainable agriculture production and value chains The strategic interventions are: i. Support increased access to irrigation facilities starting with 10 percent of smallholder farming areas in 2020 and cumulatively increasing to at least 60 percent of smallholder farmers by 2030. ii. Integrated soil fertility management entailing the development and implementation of appropriate soil fertility techniques through soil mapping and land use planning and conservation agriculture (based on the judicious use of inorganic fertilizers, organic manure, agro-forestry, soil and water conservation, energy conservation) for all the farming systems in the country. iii. Undertake actions to upgrade the value chain for strategic enterprises with a focus on product quality and quantity, market diversification, excellence in agro-processing and effective use of knowledge acquired from within the value chain. The value chain upgrade is built into the Agricultural Sector Strategic Plan with priority areas of: bananas; beans; rice; tea; coffee; cassava; fruits and vegetables; fish; cocoa; meat, Irish potatoes; and oil palm and oilseed crops. 2. Natural capital management and development The planned strategic interventions are clustered around four areas: tourism; sustainable forestry management; sustainable wetlands; and optimal water resources management. i. Tourism Development: a. Invest in offering increased options among and values of tourism packages and in benefit sharing with communities surrounding Protected Areas (PAs). b. Improve physical planning and quality enhancement for hospitality investments in nature-based tourism. ii. Sustainable Forestry Management: a. Undertake forest landscape restoration, especially on private land, through agro-forestry and afforestation actions. b. Support incentive programmes oriented towards livelihoods enhancement, environmental stewardship and landscape management for climate change adaptation, mitigation, food security and sustainable energy. iii. Sustainable wetlands: a. Strengthening regulation of wetlands management, especially for District Local Governments and Urban Authorities; THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 47 b. Harnessing opportunities from sustainable use of wetlands including provisioning, regulating and aesthetic ecosystem services. c. Restoration of degraded wetlands to maintain the regulating ecosystem such as hydrological services and effluent treatment. iv. Sustainable and optimal water resources management: a. Support the development and implementation of catchment management across the country. b. Support development of sustainable financing, financing mechanisms and their governance. c. Support sustainable, feasible and viable utilization of water resources through increased efficiency and optimal allocation 3. Planned green cities The UGGDS interventions for planned green cities are: i. Support comprehensive economic physical planning and efficient waste management (solid and wastewater) for at least five cities and 15 municipalities. ii. Promote sustainable procurement and interlinkage between the rural raw material production base and industrial production in cities. 4. Sustainable Transport i. The strategic interventions for sustainable transport development are: ii. Support planned multi-modal and mass transport systems for urban areas comprising of the Bus Rapid Transport system (BRT) and the Light Railway Transport (LRT). Support development, utilization and interconnectivity of the planned national, regional transport systems, and Standard Gauge Railway (SGR)for the country. 5. Energy for green growth The planned strategic interventions are: i. Support an increased focus on renewable energy investments including: a. Biomass energy for electricity through cogeneration by sugar companies and other modern technology options by 2030; b. Improved technology for enhanced efficiency in using biomass for domestic cooking and industrial uses by 2020; c. Enhancing solar power potential especially for on-grid and local supply over the transitional period for the country from the current 10MW to 5,000MW by 2030; 48 GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK d. Exploitation of geothermal energy based on current plans from base capacity of 450MW by 2030 to 1,500MW by 2040; e. Support capacity utilization for large and mini-hydropower plants, and encourage efficiency in evacuation of generated power. The efficiency of capacity utilization can be increased from about 50-60 percent to 80 percent and evacuation to 95 percent by 2020. iii. Support development and/or reinforcement of environmental, health and economic safeguards for energy generation in the country.

3.3 The Results Framework

3.3.1 Baselines and assumptions and targets outcomes proposed. 1. Agriculture a. Water for Irrigation Current plans under the National Irrigation Master Plan 2010–2035 are for irrigation support for Irrigation Area Type A covering 295,000 ha and Irrigation Area Type B, 272,000 ha. The current government plan is expected to cover 567,000 ha even though at baseline irrigated area is only 31,000 ha. At baseline, an average smallholder family needs 1 ha therefore, the 567,000 ha can represent 567,000 households, and this would be a modest coverage given the large number of farming households in the country. Out of the 5.4 million farm households in the country, 4.833 million households would not have irrigation water. Since baseline irrigation is 31,000 households, then approximately 4.8 million households (89 percent of farm households) would be out of reach of irrigation. An alternative is required. The target for the Uganda Vision 2040, on food and nutritional security suggests that one out of four households would be able to produce enough to feed four households. The long-term target would be to reach at least 60 percent of the 4.8 million households out of reach of current plans, using water harvesting, solar irrigation and other discrete type of interventions based on ground, surface and rainwater, over a 10-year period between 2020 and 2030. Therefore, the annual target is 144,000 households per year; that is 1,440,000 households plus the 576,000 ha (Area Type and Type B under the Irrigation Master Plan) by 2030. b. Integrated Soil Fertility Management (ISFM) and Land Management The targets for integrated soil and fertilisty management are aligned with Strategic Investment Framework for Sustainable Land Management (UNDP 2014).The target comprise; an overlap of integrated nutrient management; intercropping: mulching— 20,000 ha/year; agro-forestry for 20,000 ha/year; and terraces for 1,000 ha/year. The annual target is 41,000 ha/year engaging in ISFM and land THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 49 management. The baseline on current levels of ISFM and land management will be developed as part of the design of the component. c. Upgrading the Agricultural Value Chain At baseline in 2015, Uganda had a trade deficit of UGX 771 billion. The immediate target of the value chain upgrade is to achieve a trade balance based on increased value of agricultural products which act both as substitutes for imported products as well as products for export. The targeted straight- line increase in value averages UGX 77 billion per year. The target products based on the agricultural sector strategic plan are the 12 priority crops (bananas, beans, rice, tea, coffee, cassava, fruits and vegetables, fish, cocoa, meat, Irish potatoes, and oil palm and oilseed crops). 2. Natural Capital Management a. Sustainable Forest Management (SFM): The SFM targets are based on forest cover losses in the National State of Forest Resources Report (MWE 2016b), and targets for Uganda Vision 2040 to restore the forest cover to the level of 1990 when forest cover was 24 percent of total land cover. This requires restoration of 3.05 million ha of forest cover over 22 years, based linear regression model, the required rate of restoration was estimated at 138,600 ha/year. Approximately 15 percent of restoration effort will occur in central forest reserves. At the same time, efforts to slow down the deforestation rate are needed, especially that associated with energy use. Additional interventions linked with the SFM strategy is the sustainable use of wood fuel. Therefore additional tree planting will be needed to cover for forest loss, at a 38 percent rate b. Wetland areas: The wetland assessment was based on the National Wetlands Atlas Volume I and Volume II (GoU 2016a: 2016b) developed with support of UNEP and UNDP. The wetland indicators used are based on the proposals of Uganda Vision 2040. Additionally, the valuation aspects were based on work done in the Lake Victoria Crescent, the Southwestern farmlands and the Kyoga catchment (Kakuru, Turyahabwe and Mugisha 2014). c. Water Resources Management: Catchment value was based on partial valuation conducted for Kasese District as a background study to the design of a PES project (WWF 2016). The focus area of the Nyamwamba-Mubuku sub-catchment and additional sections of the Semliki catchment was 2,333.4 km2. Therefore, a fairly modest partial value of UGX 414,820,176/km2 was estimated. The catchment area has a water resources value estimated at UGX 967.9 billion shillings after removing the value of forest and carbon stocks while when wetland values were removed, the value declined to UGX 198.96 billion, equivalent to 8.5million/km2. d. Tourism: The country recorded a total of 1.73 million international arrivals and 1.71 million departures in 2015. The number of visitors to national parks increased from about 202,885 in 2014 to about 215,558 in 2015. Tourists visiting friends and relatives in Uganda increased from about 441,000 in 2014 to about 510,000 in 2015. The most popularly visited national park in 2015 was Murchison Falls (34 percent), followed by Queen Elizabeth (30 percent) and Lake Mburo National Park (12 percent). Of the visitors to national parks, 36 percent were foreigners who are non-residents. According to UBOS (2016b), only U$123.5 million of Uganda’s U$667 million from tourism (World Bank 2013) is attributed to foreign tourists visiting Uganda’s Protected Areas. 50 GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK 3. Planned Green Cities The leading urban centres in the country had a population of nearly 7.4 million in 2014, a more than four- fold increase from the 1.7 million in 1991 (UBOS 2016a). The lowest population growth occurred in Jinja Municipality at just 2 percent annually while the high rate was 11.9 percent for Wakiso Town Council. Other urban centres that experienced rapid annual population growth were Hoima Municipality (10.7 percent), Mukono Municipality (10.4 percent), Masindi Municipality (10.1 percent), and Mbarara Municipality (8.6 percent). The most feasible cities, by population, based on the plans indicated in the Uganda Vision 2040 over the course of the UGGDS are: Gulu, Mbarara, Hoima and Mbale. An expanded Kampala city to cover areas of Greater Kampala Metropolitan Area including Nansana, Kira and Mukono Municipalities and Wakiso Town Council also seems feasible. Therefore, the UGGDS considered five cities, a Greater Kampala Metropolitan City (GKMC), Gulu, Mbarara, Hoima and Mbale cities. The base population of these cities was: GKMC – 2,136,408 people; Mbarara – 195,013 people; Gulu – 152,276 people; Hoima – 100,625 people; and Mbale – 96,189 people. Currently, 76 percent of households earn some income from agricultural production. Whereas about 66 percent of the population is employed in agriculure (Bwire and others 2016), it is the most important source of income for only 42 percent of households, while 26 percent of households rely on agriculture exclusively. Only 11 percent of the labour force is primarily engaged in non-agricultural wage employment. The number of permanent non-agricultural wage jobs declined between 2009/10 and 2012/13 (MFPED 2014). The total employed population was estimated at 7.9 million people while the working population amounted to 13.9 million. The difference of about 6.0 million persons depicts the existence of a large mumber of subsistence farmers in the Ugandan economy (UBOS 2016a). The rural working population was 10.7 million; compared with 3.16 million people for urban areas. Whereas 49.8 percent of the working population in rural areas are engaged in subsistence agriculture, only 21 percent of the population in urban areas are engaged in subsistence agriculture (UBOS 2016a; Gollin and Sen 2016). The proposed green cities will be built on agro- processing and upgrading the value chain from agriculture. The productivity of industrial workers is expected to average US$7,871.35/worker by 2040 while the average agricultural worker productivity was projected at US$977.77, anticipated between 2020 and 2030 (NDP II) (GoU, 2015). 4. Transport Agricultural productivity improvements have a relatively large impact on the economy. Because the non- agricultural sector is initially small, and because the economy faces a subsistence constraint that limits the expansion of the non-agricultural sector, improvements in non-agricultural total factor productivity (TFP) have relatively small positive impacts on the economy (Gollin and Rogerson 2010). Reductions in transportation costs generate sizeable benefits for the economy and trigger substantial reallocations of labour across sectors. When agricultural TFP improves at the same time that transportation costs are reduced, the welfare gains exceed those achieved from the two interventions separately, suggesting a kind of interaction effect (Gollin and Rogerson 2010). By introducing reliable, safe, affordable and efficient railway transport systems, the SGR will occasion a drastic freight transportation model shift from road to rail. This shift will reduce the the cost of freight transportation from the seaport of Mombasa by 69 percent from the current average of US16 cents per tonne/km to an average of US5 cents per tonne/km (MoWT 2016). THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 51 5. Energy The energy sector presents major challenges and opportunities. Uganda’s energy balance is dominated by biomass while fossil fuels and electricity are other important sources of energy. The total electricity supply was growing at rate of 7 percent (GoU 2015) while demand was actually growing at 11 to 12 percent (ERA 2015). The projections of Uganda Vision 2040 are that per capita electricity consumption will reach 3,668 kWh/capita (2040) from 75 kWh/capita (2010) if the country is to achieve its long-term development targets (GoU 2013). Fuel wood is consumed at about 28 million tonnes/year of tree biomass and another 16 million tonnes of wood are annually are transformed into 1.8 million tonnes of charcoal using inefficient kilns. An additional 2.3 million tons of tree biomass is consumed in brick making and by educational institutions, among others (MEMD 2015). The evolution of biomass energy use has created opportunities for electricity cogeneration and thermal energy in use of bagasse by sugar factories, and use of agro-processing vegetal waste including maize cobs, rice husks, coffee husks for thermal energy in industry. The main factors driving up energy demand is the high population growth rate of 3.2 percent a year and the low level of electricity access, currently estimates at 14 percent. Currently, demand is growing at a rate of 7-9 percent per year (ERA 2015). Therefore, even with the increased focus on the small renewable energy options under the GeTFIT initiative the 150MW target is modest given the country’s future energy demands projected at 41,738MW (2040). Large hydropower project development is pushing the country closer to the target of 4,500MW from hydropower and the country is also actively exploring geothermal energy, and the ERA strategy 2014/15–2023/24 has highlighted the prospects from natural gas and oil for thermal electricity generation (ERA 2015). In planning for sustainable development, it is important to acknowledge the energy demands and the need to grow the country’s energy supply (generation), transmission and distribution. Therefore, the UGGDS seeks to support energy supply growth while ensuring that options for energy efficiency, renewable and clean energy are maximized, and environmental pollution, risks and hazards associated, particularly with non-renewable energy sources, and with misuse of renewable energy are minimized. From that perspective, the focus of the green growth strategy is to design instruments, regulatory, market-based mechanisms and environmental sustainability instruments to promote sustainable development. The core instruments are: market based mechanisms such GeTFIT; utility charges; electricity generation from wastewater and sewerage (National Water and Sewerage Corporation - NWSC); and subsidy options to urban authorities for waste energy generation,

3.3.2 Target Outcomes The outcomes proposed for the UGGDS are summarized in Table 10. The outcomes are in the eight areas of income and livelihoods enhancement, decent green jobs, climate change mitigation and adaptation, environment and natural resources management, food and nutrition security, resource use efficiency, social inclusiveness, and economic transformation at national and sub-national level. The summarized target results in Table 9 are shown in the matrix below; over 3.3 million jobs are envisaged and a cumulative economic outturn based on multipliers worth an estimated UGX 234 trillion projected expected over the 10 year period, ( an annual average of UGX 23.4 trillion). 52 GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK Table 9: A summary of target outcomes Sectors Decent jobs* GHG emission Economic Target for reduction transformative impact gender (Million tonnes with multipliers (UGX density CO2e) trillion) (%) 2e Agriculture 155,158 13.4 5.37 75% women Natural capital Overall 1,516,419 36.3 40.04 30% men (90 %temporary 10% permanent) Green cities 1,250,000 1.1 163.88 50% women Transport 389,830 1.9 11.2 30% women Energy 54,609 18.5 13.67 30% women Total 3,366,016 71.2 234.16 *Permanent jobs unless otherwise stated. Table 10: Results Framework - Planned Outcomes of the UGGDS Area Strategy Targeted outcomes Income and Decent green Climate change Environment Food and Resource use Social Economic transformation livelihoods jobs adaptation & and natural nutrition efficiency inclusiveness at national and local level enhancement mitigation resources security management Agriculture Increased access Economic gross 19,300/yr – total Emission Integrated into Assured food Ratio of water An additional Additional local and national to irrigation margin/ha: UGX building of Reductions = catchment security for used/water 24,000 economic multiplier (1.56) facilities 500,000/ha water reservoirs 13.4 milion(M) management additional requirements households = (1.56x500,000x144,000) tCO2e by plan (5 240,000hh/ for target crop per year have 144,000 30,000/year 2030 from catchments) year = 1.25:1 optimal enough water = 46.8 billion/year households/ year casual labourers improved soil water use for production Cumulatively by 2030 49,300/jobs management, and domestic added livestock mix and use =UGX 2.34 trillion management (see Annex 1) Integrated Economic gross 41,000 casual Integrated into Assured food Ratio of water Beneficiary Additional local and national Adaptation soil fertility margin/ha: UGX jobs added catchment security for used/Water households, economic multiplier (1.56) benefits: Include management 250,000/ha management additional requirements are female 1 worker per ha/ increased = (1.56x500,000x60,000) plan (5 240,000hh/ for target crop farmers, 41,000 ha/year year adaptive catchments) year = 1.25:1 optimal bylaws on = 23.4 billion/year capacity from water use equality to irrigation, Cumulatively by 2030 ensure equal Integrated Soil access to =UGX 1.17 trillion and Fertility revenue Management Upgrading the Value added At a labour Contribution to Contribution to Ratio of water 40% of value Additional local and national value chain increased of UGX productivity of the irrigation the irrigation used/Water addition jobs economic multiplier (1.56+ for strategic 77billion/year by US$7,871.35/ and ISFM and ISFM requirements created for backward linkages 0.86 + enterprises 2030 worker (NDP II) and land and land for target crop women, 10% forward linkages 0.35 = 2.42) management management = 1.25:1 optimal for other 64,858 jobs Cumulatively by 2030 target target water use vulnerable added groups = (77x10x2.42) = UGX 1.863trillion Natural Tourism Increase value from At a labour Adaptation Total increase in value capital development Foreign tourism productivity of benefits are (US$1.5 billion less US$667 management from US$123.5 US$5,217.65/ plenty are million) = US$833million and million to US$500 worker (NDP II) already covered Services income multipliers development million (2020 to in the ecosystem 359,213 jobs are 2.25 2030) services added Total economic benefit Increase value expected to be = US$1.874 of other tourism billion value from US$543.5million to or UGX 6.84 trillion US$1billion from 2020 to 2030 THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 53 54 Area Strategy Targeted outcomes Income and Decent green Climate change Environment Food and Resource use Social Economic transformation livelihoods jobs adaptation & and natural nutrition efficiency inclusiveness at national and local level enhancement mitigation resources security management Sustainable Forests in Uganda At a labour Afforestation Restoration of The 136,000ha/ Forest At least 50% Economic flows forestry contribution productivity of and reforestation 160,000ha/ year year increase maintenance of forest land contribution similar to management annual ecosystem US$978/worker has abatement in forest where net forest restoration on agriculture (multiplier 1.56) maintenance of service flows of (NDP II) potential of 35.9 cover and increase is private land remaining forest cumulative contribution UGX 6,092,371/ha MtCO2e by 2030, maintenance proportional to will be done 344,785 jobs cover 2020-2030 = (1.56x10x This value excludes this includes will be on national target. by women. added 129,500x6,092,371) value of stocks, about 36% private mostly Therefore and significant from avoided agricultural annual wood = UGX 12.3 trillion (2020 – biodiversity deforestation land – need use at domestic 2030) hydrological, (cook stoves - for forage, level should existence, option Energy) soil nutrient be the excess values enhancement, planting Adaptation mulching, fruit beyond national benefits are and food crops target. plenty are already covered GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK in the ecosystem services Sustainable Annual value of At a labour Abatement of Area of wetlands The ecosystem Wetland At least 50% Economic flows wetlands flows of ecosystem productivity of 0.4 MtCO2e by restored through services from maintenance of wetland contribution similar to services from US$978/worker 2030, Economic wetlands e.g. where net restoration on agriculture (multiplier 1.56) wetland ranges (NDP II) Instruments water, mulch, wetland private land Adaptation cumulative contribution average US$2,718.8/ (270,000ha thatch, grass increase is will be done 585,854 jobs benefits are 2020-2030 = (1.56x10x ha/ year by 2040) 25% forage for proportional to by women plenty are 135,000 ha 9,923,437.5) biodiversity livestock, national target. already covered offsets, and among others Therefore = UGX 12.3 trillion (2020 – in the ecosystem other economic will boost annual increase 2030) services instruments agricultural should cater =UGX 20.9trillion production for decline in wetland area Sustainable Estimated economic At a labour Mitigation Estimated total The Ratio of water At least 50% Economic flows and optimal value of flows from productivity of overlap with economic value catchments used/Water of forest land contribution similar to water resources a catchment was US$978/worker forestry and of flows from are a principle requirements restoration on agriculture (multiplier 1.56) management estimated at UGX (NDP II) wetlands a catchment source of water for target crop private land cumulative contribution 8.5million/km2 ecosystems was estimated for irrigation = 1.25:1 optimal will be done 824,146 jobs 2020-2030 = (1.56x10x at UGX and domestic water use by women Adaptation 221,171km2 x 8,526,742) 434,560,000/ use, already benefits are km2 covered in = UGX 29.4 trillion plenty are other values (2020–2030) already covered in the ecosystem services Area Strategy Targeted outcomes Income and Decent green Climate change Environment Food and Resource use Social Economic transformation livelihoods jobs adaptation & and natural nutrition efficiency inclusiveness at national and local level enhancement mitigation resources security management Planned Support Industrial cities will 1.25 million new Water Efforts to protect All 3.33 million Reduced Social safety Economic flows from green cities comprehensive increase worker jobs added management urban forests, (2020) to 5.75 travel time (by needs e.g. food industrial cities and physical productivity mitigation wetlands, an million (2030) 75%), saving distribution increased worker planning and from US$977.8 1.1MtCO2e by catchments people in the the economy to the poorer productivity from efficient waste to at least 50% at 2030 already five target over UGX 70 households in subsistence farmer level to management US$5,217.65 for included in the cities will be billion/ year for urban areas at least service providers The adaptation (solid and new workers. For a other UGGDS food secure Kampala LRT based on increased from US$3.06 benefits include wastewater) new population of programmes. alone. the surplus billion/year in 2020 to a clean healthier for at least five workers increasing production US$5.28biillion/year air to breathe Plus sustainable cities and 15 from 0.74 to 1.25 Cumulative = US$44.9 in the cities, procure municipalities million. billion, equivalent to UGX cleaner water and waste 163.88 trillion over 10 years Promote (rural urban for domestic management in sustainable migration not consumption urban areas procurement considered) and economic and interlinkage use, among between rural others. areas and cities. Sustainable Support planned Transport mode At the highest Bus Rapid The LRT will save If the The reduced Employment Savings of SGR expected transport multi-modal and shift will reduce labour Transport – 0.3 Reduced employment cost of transport creation at US$ 2billion/ year. The mass transport cost of freight productivity of MtCO2e is achieved per tonne (direct and real economic benefit is fuel systems for urban transportation from US$7,871.35 then 389,830 of cargo will indirect) linked maximizing the economic Fuel efficient consumption areas comprising current average of households considerably to transport benefit of backward and Capacity to vehicles – 1.6 of BRT and LRT US cents 16/ tonne/ (by 75%) will be able reduce the slack development forward linkages associated create 389,830 MtCO2e km to average US resulting in to attain food in the value should with efficient transport Support additional jobs cents 5/ tonne/km. The adaptation savings of security based chain between provide equal development, linked to savings Added multipliers (0.86 – benefits include around UGX on the GDP rural and urban opportunities utilization and and gains Agriculture, 1.7 industry, a clean healthier savings and markets and for both interconnectivity from savings 56 billion/year 1.75 – services) air to breathe in gains. export. A women and of the planned new modes of the cities, standard for men, at a proportions of GDP national, regional transport and good transport professional used (23.6%, 19.7% and transport backward and would increase level. 56.7%, respectively = connectivity, forward linkages market US$3.06billion/year Standard Gauge to services, efficiency equivalent to UGX 11.2 Railway for the industry and trillion/year of GDP gains country agriculture THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 55 56 Area Strategy Targeted outcomes Income and Decent green Climate change Environment Food and Resource use Social Economic transformation livelihoods jobs adaptation & and natural nutrition efficiency inclusiveness at national and local level enhancement mitigation resources security management Supports the Renewable Grow enterprises Services Efficient Savings in Increased Biomass energy The renewable The overall outcome promotion energy for efficient clean jobs created cook stoves forest area from energy options efficiency energy options of renewable energy of renewable investments energy stoves, at a labour abatement of cutting wood will increase – domestic for domestic interventions are looked at energy in biomass improved kilns, solar productivity of 13.0 MtCO2e by fuel per capita the ability to per capita use will as interventions to achieve investments for electricity, systems US$5,217.65/ 2030 consumption prepare meals consumption reach at least an outcome of reduced and technology worker (NDP II) and efficiency for all 56% of reduced by 56% of the wood fuel consumption The outcomes is Solar PV sustainable efficiency for of kilns is the households 50%, Energy households in (energy substitution). increased value 54,609 jobs abatement use other domestic cooking equivalent to reached. This efficiency for the country. of ecosystem potential – 1.1 The outcomes include an energy and industrial 170,952 ha/year will increase charcoal and The main service flows of MtCO2e by 2030 ecosystem services supply sources biomass energy, (biomass density the food and brick kilns beneficiaries UGX 6,092,371/ of UGX1.04 trillion/year, solar energy Expanded large 138tonnes/ha) nutritional increased by of domestic ha of forest saved. equivalent to UGX10.4 potential, HPPs – 3.8 security. 200%. electricity and Savings will be trillion over 10 years geothermal, and MtCO2e by 2030 renewable Savings in wood mini and large UGX 1.04 trillion/ energy are, Plus stand stock value Small HPPs – 0.6 supply per hydropower year women, UGX3.265 trillion, a fixed year – GREEN GROWTH DEVELOPMENT STRATEGIC FRAMEWORK MtCO2e by 2030 generation children value. Adaptation savings of 23.6 and poor Support benefits covered million tonnes households. development in economic of wood per and/or benefits year. reinforcement of environmental, health and economic safeguards for energy generation in the country. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 57 4 ENABLING ARRANGEMENTS

4.1 Institutional Arrangements and Governance The UGGDS adopted the governance arrangements proposed in the second National Development Plan. The governance arrangement consists of the National Planning Authority (NPA), Ministry of Finance Planning and Economic Development (MFPED), all Ministries, Departments and Agencies (MDAs), representation from civil society, the private sector, and District Local Governments and relevant Urban Authorities. The green growth strategy is seeking to build further synergies to accelerate growth prospects and minimize slack associated with repetitiveness, access unutilized capacity and willingness to learn and improve efficiency of performance. Pillar 1: National Green Growth Governance and Coordination Framework A national governance framework is proposed. The national governance framework will provide regulatory oversight and provide support in ensuring the macroeconomic drivers and sustainability drivers are able to translate into policies for the private sector and other actors. The national governance and coordination framework will comprise the NPA, MFPED as representatives of Government and representatives of lead agencies for the UGGDS focal areas. It will also have representation from civil society and development parties. The framework committee will be responsible for overall implementation including the monitoring and evaluation framework and ensuring that the green growth strategy is kept on track. Whereas the specific data, outputs and results will be maintained at the multi-sectoral implementation level, the national coordination framework will be responsible for keeping the outcomes on track through engagement with the implementing agencies. The national coordination framework will not directly implement projects or programmes, except those linked to outcomes, monitoring and evaluation coordination and governance, including financial oversight. Pillar 2: Multi-Sectoral Implementation (MDAs, DLGs, Urban Authorities, Civil Society, Development Partners) The second pillar is the multi-sectoral implementation level that pools lead public sector MDAs, other MDAs, District Local Governments (DLGs), and Urban Authorities (UA). The UGGDS has five focus: agriculture; natural capital; cities; transport and energy. Multi-sector institutional arrangements are proposed covering the scope 58 ENABLING ARRANGEMENTS of the eight outcome areas and the implementation strategies required to achieve the green economy targets. Linkages between MDAs, DLGs and UAs will allow for a single regulatory and policy implementation level. MDAs will share responsibility for outcomes with DLGs and UAs. Programmes for project design will describe specific roles at different levels. Responsibility for the results, outcomes and annual reporting on the performance of the UGGDS will be held at the multi-sectoral implementation level. The focus agencies will be responsible for development of projects, securing financing, implementation and monitoring of outputs. The multi-sector level will report at regular intervals on the performance of outcomes set in the results framework. The annual planning and sector performance reports will be key in prioritizing sector- specific green growth interventions and reporting on performance. Pillar 3: Community implementation level, landscapes and cooperative groups The focus of actions for green growth will be in landscapes including urban and rural landscapes. Landscapes are defined as groups of actors implementing the different programmes proposed under the UGGDS. Clusters enhance cohesion for communities, regional institutions and other actors who own resources and inputs including land, labour, capital. An agricultural cluster will farmer groups, traders, agricultural research bodies, marketing agencies, and public sector regulators. The landscape allows for actors to interact and share information that will improve productivity, quality assurance and appropriately attribute the value captured by the different actors for a specified economic or socially inclusive activity. Cooperative groups are defined as industry interactions that support production, savings and lending and marketing actions. At farmer level farmer cooperatives can engage in production of similar produce, quality assurance, storage, savings and credit, joint sale or marketing, processing, among others. All five areas of the UGGDS are expected to work with cooperative groups as the smallest reporting unit. Figure 3: Proposed institutional framework for Uganda’s Green Growth Development Strategy National UGGDS Governance and Coordination Implementation Level Multi-Sectoral Implementation Cooperatives (Agriculture, (MDAs, DLGs, Urban Authorities) Cities, Energy, Transport, Natural Capital) THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 59

4.2 Resource Mobilization Six major sources for financing the UGGDS are proposed. They include: mobilization from public sector allocations; environmental fiscal reforms and subsidy reforms; sustainable procurement; certification of sustainable production and trade and inclusive green social enterprises; green energy investments and incentives; green innovation and payments for ecosystem services; and international funding. The funding target is US$1.8 billion/year (GoU and NCE 2016). Public Sector Allocation and Environmental Fiscal Reform Public sector allocations and environmental fiscal reforms (EFRs) are expected to be a major source of funding. The funds will be through allocations to the natural capital sector, and infrastructure sectors, among others, as priorities in the UGGDS. Green growth interventions aim for catalytic effects that accelerate growth through efficiency improvements, resource maintenance and cost-effectiveness. Social inclusiveness will entail, among others, increased work opportunities and an improved quality of labour and labour productivity. The target of the UGGDs is to draw 30 percentof its financing from public sector allocations and EFRs, equivalent to US$540 million/year It is envisaged that 30 percent of the funds needed for the green growth strategy will be obtained from public sector allocation and EFR reforms. The EFR reforms will extend to instruments for regulating environmental compliance among others. Green Public Procurement Another major source of funds for the green growth strategy will be sustainable procurements. To achieve strategy, the government will support sub-national sustainable procurement ordinances as well as develop regulations and guidelines on sustainable procurements at national level. Public procurements will involve finance from government and private sector engaged in public contracts. Certification of Sustainable Production and Trade and Inclusive Green Social Enterprises One of the key interventions for green growth is enhancing and/or ensuring the competitivness of sustainable value chains. Sustainable value chains may fail to compete against conventional production of timber, wood fuel, agriculture because the latter chains do not invest in resource maintenance and efficient resource use. Through certification of value chains, consumers will be able to understand premiums associated with sustainably produced products. This would also allow regulators to monitor the value chains of producers in the economy. The target is to draw 5 percent of the budget from sustainable trade and green enterprises equivalent to US$90 million/year. Green Energy Investments and Incentives Green energy investments and incentives are considered to be a major source of financing. There will be considerable investment in the biomass energy strategy and its implementation. The target financing for energy initiatives in the UGGD is is US$180 million/year. Green Innovation and Payments for Ecosystem Services (PES) Innovation funds and payments for environmental services will draw funds from the private sector, international innovations, research in biodiversity, climate change, health and other sectors. Whereas there are opportunities for acquiring patent rights where the profits from innovation can be substantial, there will 60 ENABLING ARRANGEMENTS be a need to consider regulation for reinvesting some of the earnings from green innovations into the green growth sectors to minimize excessive fund outflows. The financing target from green innovation and PES is 5 percent return on investment per annum, approximately US$90 million/year. International funding International funding is expected to be an important source of finance in the piloting and scaling up phases of green growth strategies. Between 2018 and 2030, Uganda will access grants, sustainable financing schemes and private sector financing from international sources to secure at least US$ 480 million for the UGGDS annually.

4.3 Macroeconomic conditions i. A GDP growth rate ranging between 5 percent and 10 percent per annum sustained in the long-term. ii. A decline in the current account deficit from the current levels of 9.75 percent. The reduction in the current account deficit decline will be associated with an improvement in export of goods and services and hence price stability and sustained export growth iii. An increase in net portfolio inflows through Foreign Direct Investment including into green growth development strategies. iv. Stable and low inflation maintained close to the Bank of Uganda inflation target of 5 percent (MPFD 2016). v. A stable banking sector able to offer credit to the private sector at affordable interest rates.

4.4 Shift in government expenditure i. Shifting public procurements from value chains that encourage unsustainable production using natural capital, inefficient use of industrial resources, polluting industry and high waste generation towards more sustainable production, efficiency, minimal pollution and waste generating products and value chains– through green procurements. ii. Shifting government expenditure from sectors and industries that undertake pollution generation, natural capital destruction and inefficient production towards sectors with higher efficiency iii. Requirement for use of efficiency and sustainability standards and certification in service and goods production.

4.5 More effective enforcement of legislation i. The green growth strategy requires the enhanced enforcement and implementation of legislation on the environment and natural resource management, natural capital management and economic and socially inclusive development. Investment in implementation of policy and legislation will require enforcement of compliance. ii. Economic measures such as environmental fiscal reforms, and other incentives and disincentives can be used to reinforce the effective enforcement of legislation. iii. Fiscal reforms covering old motor vehicles and encouraging new vehicles to reduce environmental damage. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 61

4.6 Education and Training i. The structural changes associated with the green growth strategy may require new knowledge and skills for government, decision makers, professionals and workers, down to local levels. The structural employment and institutional changes required may also require financial backing to accelerate the transition to sustainabilty of organizations and their employees and support for training and skills development, technical and vocational training.

4.7 Resource and Land Rights Regimes i. Resource and land rights have to be designed in a manner that increases access to producers who will contribute to the economic, environmental and social targets of the green growth strategy. For example, the availability of land rights for women, the consolidation of land through agricultural cooperative to increase output and productivity. ii. Resource right regimes have to be designed in a manner that allows for regulation for social and environmental safeguards while also attaining optimal but sustainable levels of production particularly for the use of natural capital (minerals, water etc.) iii. Refugees in Uganda are either self-settled or live in organized settlements that cover approximately 350 square metres of land set aside by the government (World Bank Group 2016). Recent assessments suggest the country is beginning to buckle under pressure from regular influx especially from South Sudan and the Democratic Republic of Congo. A deliberate resource and land light alignment for refugees is required to manage impacts on society, environment and natural resources and the local and national economy.

4.8 Creating Enabling Conditions for Psychological and Behaviour Change i. Framing green growth as a social goal, encouraging the choice of greener approaches, “nudge” techniques to help people make better decisions on those choices, and tailoring information to match with stakeholder incentives and approaches to learning are among the changes needed. ii. Inclusive growth will be achieved by enhancing the attitude of marginal groups, especially women and the poor. There is a need to establish a means of mobilizing as many actors as possible to participate in green growth

4.9 Facilitating Businesses to Integrate Sustainability and Equity Concerns i. There is a need for provision of information and for coordinating research on potential opportunities, especially about how to adopt the best available technologies and meet standards. Trade barriers should be adjusted reduced where necessary to enable access to technology, and financial subsidies should be provided to promote sustainable development. ii. Public Private Partnerships will be fostered to share risk and cover upfront costs. Accountablity will be enhanced by widening reporting requirements iii. Enhance accessibility to credit, including public sector incentives, and encourage innovative financing instruments 62 ENABLING ARRANGEMENTS

4.10 Generate Appropriate Data, Statistics and Policy Support Information. i. The government needs to fast track a road map for integrating the system for environmental economic accounts to address the concerns of appropriate attribution of economic activities in terms of depletion and appreciation across all sectors of government. ii. Undertake comprehensive environmental economic accounts across all sectors. Develop appropriate interfaces through input-output table analysis. iii. The assessments generated should be used to describe and attribute responsibilities for resource maintenance, efficiency and effectiveness enhancement in production, consumption and distribution iv. The scope of the Natural Capital Accounting (NCA) accounts should be wide, to capture socioeconomic activity and to support future policy and economic activity. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 63 5 ROAD MAP FOR IMPLEMENTATION

5.1 Getting started

5.1.1 Mobilizing for Action (2017/18-2020/21) The initial actions of the UGGDS implementation process comprise developing a communication strategy, and disseminating the strategy to stakeholders, development partners and the private sector. The NPA will engage in a process of getting policy-makers, and potential implementation partners to buy into the strategy. Mobilizing stakeholders may also involve identifying changes in implementation arrangements, and technical and financial capacity for the institutions to participate in the UGGDS. For financing institutions, this may require realigning the outcomes within existing programmes and/or integrating the UGGDS into new programmes. Figure 4: Implementation Path for Uganda’s Green Growth Development Strategy Implement GG • Evaluating strategies outcome • Communication Design indicators strategy • Consolidate best • Design practices • Backward and • Disseminate UGGDS • Agriculture forward linkages • Get buy-in programmes • Align institutional • Natural Capital • Resource arrangements • Cities Evaluation & mobilization • Transport continuation Initate Establish enabling • Energy framework 64 ROADMAP FOR IMPLEMENTATION

5.1.2 Consolidated Best Practices for Green Growth Interventions (2017/18-2020/21) The UGGDS was developed through a diagnostic process that examined the status of implementation of the green economy. The strategy highlights several best practices that need to be scaled up and/or integrated within existing practices. Many practices also have to be eliminated as they perpetuate inefficiency. Examples of best practices include the GETFIT initiative, energy efficient cook stoves and efficient kilns while inefficient practices that may be eliminated are soil mining in agriculture, low value chains with gross losses for smallholder farmers, expensive transport systems for farmers and individual actions by smallholder farmers that lead to high costs of production. This stage will be used to realign these practices with the green growth strategy outcomes. Consolidation needs to be undertaken in a systematic manner so that subsequent design of UGGDS programmes is in alignment with the goals and outcomes targeted by the strategy.

5.1.3 Programme Design and Resource Mobilization Arrangements (2017/18-2020/21) The initial phase of the UGGDS implementation will be completed through a process of project design and resource mobilization. The strategy has clarified the areas and the strategies where the focus of green growth lies. The purpose of programme design is to align technical, human, financial resources in a feasible and viable manner. Establishing the technical feasibility of the proposed actions is important because it will allow for use of available capacity and also propose how additional capacity can be acquired. Effectiveness can be increased because benchmarks for performance will be reviewed. Achievement of efficiency will be assessed ex ante through an evaluation process the results of which will be presented in the programme and project designs.

5.2 Implementing Strategies of UGGDS (2020/21-2030/31) A detailed action plan/national green growth implementation roadmap sequences the interventions as short term for those to be implemented under the NDPII (2015/16-2019/20), medium term over the NDPIII period (2020/21-2024/25) and long term over the NDPIV period (2025/26-2029/30). It is important to note that the implementation of some strategies and interventions will spread over ten years and will therefore feature prominently in the ten-year long term National Development Plan (2021/21-2030/31). The full implementation of the UGGDs programmes is expected to take place between 2020/21 and 2030/31. Whereas the initial actions are also part of implementation of the strategy, there is an allowance for refinement of outcomes, goals, actions in the initial phase. While in the implementation phase adjustments, will be based on evaluation and feedback. The monitoring and evaluation (M&E) framework is presented in Table 10. It shows the initial actions phase and the subsequent implementation as well as the operationalization of the M&E framework itself. An early assessment conducted by the Government of Uganda and New Climate Economy (2016) indicated that the UGGDS would cost US$1.8 billion/year. The National Planning Authority and MFPED take the lead on governance and coordination actions as well as the coordination of backward and forward linkages. support is envisaged from all stakeholders to the UGGDS. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 65 Table 11: Matrix of monitoring and evaluation framework Strategies/ Indicator Means of Data sources Implementation Lead interventions measure Timelines Agency Mobilizing For Action Landscape and Functional Field surveys District Local 2017/18 – 2019/20 MoLG/ catchment approaches, Landscape Governments DLGs and leadership Stakeholders (DLGs) Strengthening Village and sub- Field surveys Landscape s/ MDAs/ community cooperative county/ Division holder forums DLGs groups cooperative groups Sustainable production Multi-stakeholder Field surveys Landscape MTIC and private sector, landscape forms stakeholder research and include private forums, MTIC, technology linkages sector, civil society DLGs National Green Growth An endorsement Field surveys NPA, MFPED NPA Governance Framework from cabinet Develop and Implementation Field surveys, Landscape MFPED implement a resource of new financing discussions with stakeholder mobilization strategy instruments for economic actors forums, NPA, green growth MFPED Baseline Satellite Status of genuine Report from NEMA, UBOS NEMA/ System of savings and UBOS UBOS NPA, MFPED Environmental inclusiveness Economic Accounts, Genuine Savings and Inclusiveness Analysis Consolidating Green Growth Interventions Consolidating Agricultural area Field observations NPA, MAAIF, 2017/18 – 2019/20 MAAIF sustainable agriculture under climate smart and MAAIF District Local implemented and agriculture records Governments reforms to national No. of new extension system extension staff undertaken Aggregating best case Number of new Field observations ERA/MEMD MEMD off-grid and on-grid off-grid energy and energy projects led by investments ERA records private investment Scaling up clean cook- No. of new clean Field observations Surveys MEMD stoves cook-stoves being records MEMD, used at household CCD and institutional level Consolidating industrial Percentage Records on MEMD, NWSC, MTIC resource efficiency improvement in industry Industries programmes sector energy, water production MTIC and other resource performance efficiency Aggregating best New urban Cities and MlHUD 5 practice and integrated integrated land use municipalities planned 5 planned urban planning plans for all cities Cities Cities, NPA capacity and municipalities 66 ROADMAP FOR IMPLEMENTATION Strategies/ Indicator Means of Data sources Implementation Lead interventions measure Timelines Agency Development of Documents for Review reports NPA NEMA communication communication and on attitudes and All MDAs, DLGs strategy and attitude attitude change perceptions change strategy NEMA Status of Communication perceptions of strategy Landscape communities document Forums towards green growth Continual review Perceptions of and reinforcement communities communication towards green strategy and attitude growth change strategy Implementation Of Green Growth Development Strategies Enabling Actions Shift government Redesigned value Field observations MTIC, MFPED, MFPED/ expenditure from value chains, market document review MAAIF, NPA chains that encourage structure policies unsustainable and/or and guidance inefficient production, and pollution Supporting more New regulations, Review of records JLOS, JLOS effective enforcement revision of District Local of legislation ordinances and Governments bylaws surveys MFPED NPA Education and Newly trained Survey of workers MGLSD MGLSD training for economic landscape reports NPA actors engaged in extension, technical implementation of the and MDA staff District Local UGGDS. Governments NPA Support reforms in New national Document review MLHUD MLHUD resource and land guidelines on land reports MoLG rights regimes use for production field observation District Local new land use Governments patterns Facilitating businesses Amendments to Field surveys MFPED UIA to fully integrate National Finance Act document UIA sustainability and Percentage of reviews equity concerns NPA financing incentives for green growth in Private sector private sector THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 67 Area Strategy Indicator Means of Data implementation Lead measure sources/ Timelines Agency Lead Agency Core Strategic Investments Agriculture Increased access Refer to Document review MAAIF, 2020/21 – MAAIF, to irrigation results 2030/31 Reports UBOS, DLGs facilities framework Field observations Integrated Field surveys MAAIF, MAAIF, soil fertility Document UBOS, DLGs, management reviews NARO Upgrading the MAAIF, MTIC/ value chain UEPB UBOS, DLGs, for strategic MTIC enterprises Natural capital Tourism MTWA, NFA MTWA management development UWA, UWEC and development Sustainable NFA, UWA, MWE forestry DLGs management Sustainable MWE, NEMA, wetlands MHLUD, Sustainable MWE, DWRM, DWRM and optimal NWSC, water resources management Planned green Support GKMC – GKMA cities comprehensive Greater and physical Kampala the 4 planning and Metropolitan planned efficient waste City, cities management MLHUD (solid and wastewater) MFPED for at least five MoLG cities and 15 municipalities 4 Additional planned cities Promote sustainable procurement and inter-linkage between rural areas and cities. Sustainable Support planned MOWT, MOWT transport multi-modal and MFPED, mass transport GKMA and systems for urban the 4 planned areas comprising cities, All of BRT and LRT DLGs 68 ROADMAP FOR IMPLEMENTATION Area Strategy Indicator Means of Data implementation Lead measure sources/ Timelines Agency Lead Agency Support development, utilisation and interconnectivity of the planned national, regional transport connectivity, SGR Support the Renewable energy All DLGs, MEMD promotion investments 5 Planned of renewable in biomass Cities energy for electricity, investments technology MEMD and efficiency for MoLG sustainable domestic cooking use of other and industrial MFED energy sources biomass energy, solar energy potential, geothermal, and mini and large hydropower generation Support development and/ or reinforcement of environmental, health and economic safeguards for energy generation in the country. Monitoring and Evaluation Framework Undertake Baseline survey Observations, NPA 2017/18 – NPA baseline report Records 2030/31 Landscape assessment baseline indicators Forums through MDA reviews, local MDAs, government, District Local civil society Governments and private sector reviews. Include field assessments. Under annual Annual technical Records evaluation and financial include reports quarterly financial and technical reports THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 69 Area Strategy Indicator Means of Data implementation Lead measure sources/ Timelines Agency Lead Agency Undertake Evaluation reports Records 5-year evaluations and redesign of green growth strategy based on progress made Undertake Terminal Records terminal evaluation report evaluation of UGGDS in 2040 70 REFERENCES REFERENCES Aryamanya-Mugisha, H. (2011) Twenty Years of Wetland Conservation in Uganda – Have Uganda’s Wetlands become Wastelands Again? Public Talk, 2 February. Kampala: NEMA. Available from: http://www.uwasnet. org/Elgg/file/download/7019. Berg, A and J. D. Ostry (2011). Inequality and Unsustainable Growth: Two sides of the same coin? IMF Staff Discussion Note, April 8, 2011, SDN/11/08. Washington D.C.: International Monetary Fund. Available from: https://www.imf.org/external/pubs/ft/sdn/2011/sdn1108.pdf. Bwire, T. and others (2016). Private and Public Investments and Economic Growth in Uganda: A Multiplier Model Analysis. Bank of Uganda, Working Paper No. 01/2016, Kampala. Available from: https://www.bou. or.ug/bou/bou-downloads/research/BouWorkingPapers/2016/All/Investment-and-economic-growth-in- Uganda_revised.pdf. Byaruhanga, A., M. Opige and P.Mafabi (2008). The Role of International Conventions in Protection of Species: A Case of Ramsar sites in Uganda. Kampala: NatureUganda. Available from: http://www. natureuganda.org/downloads/Posters/Ramsar%20Poster.pdf. Christie, I. and others (2014). Tourism in Africa: Harnessing Tourism for Growth and Improved Livelihood. Africa Development Forum Report No: 88656, World Bank and Agence Française de Deéveloppement, available from: http://documents.worldbank.org/curated/en/738471468299123752/ pdf/886560PUB0978100Box385230B00PUBLIC0.pdf. ERA (2014) Developments and Investment Opportunities in Renewable Energy Resources in Uganda. Kampala. Available from: http://www.era.or.ug ERA (2015). Grid Analysis for Integration of Wind/Solar Generation Plants. Kampala. Available from: http:// www.era.or.ug/index. ERA (2016a), Get Fit Uganda: Annual Report 2015, Kampala. Available from: http://www.era.or.ug/index.php/ component/mijosearch/search?query=Get%20Fit%20Uganda. ERA (2016b). Press Briefing: Uganda Commissions Largest Solar Plant in East Africa, 14 December. Kampala. Available from: http://www.era.or.ug. Fajnzylber, P., D. Lederman and N. Loayza (2002). Inequality and violent crime. The Journal of Law and Economics, vol. 45, No.1. Felipe, J. and R. Hasan (2006). The Challenge of Job Creation in Asia. Manila: Asian Development Bank. Available from: https://think-asia.org/bitstream/handle/11540/2137/pb044.pdf?sequence=1. Fromm, I. (2007). Upgrading in Agricultural Value Chains: The Case of Small Producers in Honduras. German Institute of Global and Area Studies (GIGA), Working Papers, No 64. Available from: https://www.giga- hamburg.de/de/system/files/publications/wp64_fromm.pdf. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 71 Gibbon, P. (2003). Commodities, Donors and Value-Chain Analysis and Upgrading. Paper prepared for UNCTAD. Copenhagen: Danish Institute for International Studies (DIIS). Available from: https://rmportal.net/ framelib/commodities-donors-value-chain.pdf. Gibbon, P. (2006) An Overview of the Certified Organic Export Sector in Uganda, Danish Institute for International Studies (DIIS) Working Paper no. 2006/13. Available from https://www.files.ethz.ch/isn/16879/ Certified_Organic_Uganda.pdf. Gibbon, P., and Bolwig, S. (2007) The Economics of Certified Organic Farming in Tropical Africa: A preliminary Assessment. DIIS Working Paper no. 2007/3, Sub-series on Standards and Agro-Food Exports (SAFE) no. 7. Available from: https://www.diis.dk/files/media/publications/import/extra/wp2007-320til20web.pdf. Gollin, Douglas and Richard Rogerson (2010). Agriculture, Roads, and Economic Development in Uganda. National Bureau of Economic Research (NBER) Working Paper No. 15863. Available from: http://www.nber. org/papers/w15863. Gollin, D., A. Mugyenyi and R. Sen (2016). Agricultural Transformation and Urbanization in Uganda. Bank of Uganda and International Growth Centre Policy note. Available from: https://www.theigc.org/wp-content/ uploads/2016/10/Gollin-et-al-2016.pdf. Government of Uganda 2017: Uganda Green Growth Implementation Roadmap: From Strategy to Action. Government of Uganda 2017: The Uganda Green Growth Development Strategy, 2017/18 – 2030/31. Kampala. Government of Uganda and the New Climate Economy Partnership (2016). Achieving Uganda’s Development Ambition. The Economic Impact of Green Growth: an Agenda for Action. Kampala: Ministry of Finance, Planning and Economic Development. Available from: https://newclimateeconomy.report/ workingpapers/wp-content/uploads/sites/5/2016/11/Ugandas-development-ambition.pdf. GoU (2013). Vision 2040: A Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 Years. Kampala: NPA. Available from: http://www.npa.org. http://npa.ug/wp-content/ themes/npatheme/documents/vision2040.pdf. GoU (2015). Second National Development Plan (NDP II) 2015/16 – 2019/20. Kampala: NPA. Available from: http://npa.ug/wp-content/uploads/NDPII-Final.pdf GoU (2016a). Uganda Wetlands Atlas, Volume 1. Kampala: United Nations and the Government of Uganda. Available from: http: http://www.ug.undp.org/content/dam/uganda/docs/UNDPUg17%20-%20Uganda%20 Wetlands%20Atlas%20Volume%20I%20_Popular%20Version.compressed.pdf?download. GoU (2016b). Uganda Wetland Atlas Volume II. Kampala: United Nations and the Government of Uganda Available from: http://www.ug.undp.org/content/uganda/en/home/library/ SustainableInclusiveEconomicDevelopmentProgramme/UgandaWetlandsAtlas-VolumeII.html. GoU (n.d). Briefing on the SGR Project for Uganda, Standard Gauge Railway Project. Kampala: MoWT Available from: http://www.sgr.go.ug. 72 REFERENCES GoU and NCE (2016). Achieving Uganda’s Development Ambition, The Economic Impact of Green Growth: An Agenda for Action. Kampala: Ministry of Finance, Planning and Economic Development. Available from:http://newclimateeconomy.report/workingpapers/wp-content/uploads/sites/5/2016/11/Ugandas- development-ambition.pdf. Hashemi A. and H. Cruickshank (2015). Delivering Sustainable Low-Income Housing in Uganda, Challenges and Opportunities. OIDA International Journal of Sustainable Development, vol. 08:10. Available from: https:// papers.ssrn.com/sol3/papers.cfm?abstract_id=2705280. Hillocks, J.R. (2014). Addressing the Yield Gap in Sub-Saharan Africa, Outlook on Agriculture, vol. 43. no. 2. pp. 85–90. Industrial Economics, Incorporated (2016). The Contribution of Water Resources Development and Environmental Management to Uganda’s Economy, Final Report, prepared for Ministry of Water and Environment. Available from: https://www.mwe.go.ug/sites/default/files/library/Economic%20Study%20 2016-Contribution%20of%20Water%20Dev%27t.pdf. Kakuru, W., N. Turyahabwe, and J. Mugisha, (2013) Total Economic Value of Wetlands Products and Services in Uganda. The Scientific World Journal, vol 2013, art. 192656. Available from: https://www.hindawi.com/ journals/tswj/2013/192656/. Kaizzi Kayuki 2014 Global Yield Gap Atlas: Uganda Results, National Agricultural Research Laboratories (NARL), Kawanda, Kampala. Also available at http://www.yieldgap.org/uganda Kaplinsky, R. and Morris, M. (2001). A Handbook for Value Chain Research. Ottowa: International Development Research Centre. Available from: https://www.ids.ac.uk/ids/global/pdfs/VchNov01.pdf. MAAIF (2011b). A National Irrigation Master Plan for Uganda (2010-2035). Kampala. Available from: http:// www.fao.org/nr/water/AQUASTAT/countries_regions/Profile_segments/UGA-Sourc_eng.stm. MEMD (2015). 2014 Statistical Abstract. Kampala. Available from: http://www.energyandminerals.go.ug/ downloads/2014StatisticalAbstract.pdf. MEMD (n.d). Promotion and Development of Nuclear Energy: Nuclear Power Infrastructure Development. Kampala. Available from: http://www.energyandminerals.go.ug. MEMD-GoU (2015). National Biomass Energy Strategy (NBEST). Kampala: MEMD with support from UNDP, Kampala. Available from: http://www.undp.org/content/dam/uganda/docs/UNDPUg2014. MFPED (2014). Uganda’s Employment Challenge: An Evaluation of Government’s Strategy. Available from: https://ecduganda.files.wordpress.com/2014/05/mofped_lily_employment-challenge.pdf. MFPED (2016). Budget Speech 2016/17, Ministry of Finance Planning and Economic Development, Kampala. Available from: http://www.finance.go.ug. MWE (2015). Economic Assessment of the Impacts of Climate Change in Uganda, Final Study Report. Available from: http://cdkn.org/wp-content/uploads/2015/12/Uganda_CC-economics_Final-Report2.pdf. MWE (2016) National State of Forestry Resources Report Draft, Forestry Sector Support Department and National Forestry Authority, Ministry of Water and Environment, Kampala. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 73 MoWT (2016). Annual Sector Performance Report 2015/16. Kampala. http://www.works.go.ug/wp-content/ uploads/2016/10/Final-MoWT-ASPR-Report-2015-16.pdf. NEPAD (2015). Uganda Agricultural Investment Opportunities Brief. CAADP Investment Facilitation Programme, NEPAD Planning and Coordination Agency (NPCA), Midrand, South Africa. Available from: http://abghq.com/downloads/Uganda_Agriculture_Investment_Opportunities_Brief.pdf. Nkonya, E., and others (2008). Linkages between Land Management, Land Degradation, and Poverty in Sub- Saharan Africa: The Case of Uganda. International Food Policy Research Institute (IFPRI), Research Report No. 159, Washington, D.C. Available from: https://www.scribd.com/document/347175208/10-Linkages-between- Land-Management-Land-Degradation-and-Poverty-in-Sub-Saharan-Africa-pdf. Ortiz I., and M. Cummins (2011). Global Inequality: Beyond the Bottom Billion. UNICEF Social and Economic Policy Working Paper. Available from: https://www.unicef.org/socialpolicy/files/Global_Inequality.pdf. Oxfam (2013). The Cost of Inequality. Oxfam Media Briefing. Available from: https://www.oxfam.org/sites/ www.oxfam.org/files/cost-of-inequality-oxfam-mb180113.pdf. Parliament of the Republic of Uganda (2016). A Report of the Parliamentary Sectoral Committee on Natural Resources on the Ministerial Policy Statements and Budget Estimates for the FY2016/17. Kampala. Available from: http://csbag.org/wp-content/uploads/2016/11/Natural-Resources-Committee-Report-FY-2016-17.pdf. Ravallion M. (2013). How Long will it Take to Lift One Billion People Out of Poverty? Policy Research Working Paper 6325. Washington DC: World Bank https://openknowledge.worldbank.org/bitstream/ handle/10986/12166/wps6325.pdf?sequence=1&isAllowed=y. Republic of Uganda, Ministry of Water and Environment (2012). Uganda National Climate Change Policy, Uganda national climate change draft costed implementation strategy. Annex C to the national climate change policy. Kampala: Ministry of Water and Environment. Republic of Uganda (2015). National Budget Framework Paper. FY 2016/17 – FY20/21. Kampala: Ministry of Finance, Planning and Economic Development. Available from: http://budget.go.ug/budget/sites/default/ files/National%20Budget%20docs/National%20Budget%20Framework%20Paper%20%28NBFP%29%20 FY%202016-17.pdf. Republic of Uganda (2015). Second National Development Plan (NDP II), 2015/16 – 2019/20. Kampala. Available from: http://library.health.go.ug/publications/leadership-and-governance/second-national- development-plan-ii-201516-201920. Republic of Uganda (2016). Ministerial Policy Statement. Kampala: Various Ministries. Available from: http://budget.go.ug/budget/sites/default/files/Sector%20Spending%20Agency%20Budgets%20and%20 Performance/Ministry%20of%20Ministry%20and%20Treasury%20Operations.pdf. Republic of Uganda (2016). Report on Public Debt (Domestic and External Loans), Guarantees and Other Financial Liabilities and Grants for Financial Year 2015/16. Kampala: Ministry of Finance, Planning and Economic Development. Available from: http://mambosms.ug/Data/atha/finance/dmdocuments/ Report%20on%20Public%20Debt,%20Guarantees%20and%20Grants%20FY%202015%20-16.pdf. 74 REFERENCES Republic of Uganda (2017). Approved Estimates of Revenue and Expenditure (Recurrent and Development).,FY 2016/17. Volume I: Central Government Votes. Kampala: Ministry of Finance, Planning and Economic Development. Available from: http://csbag.org/wp-content/uploads/2016/07/APPROVED- ESTIMATES-OF-REVENUE-AND-EXPENDITURE-RECURRENT-AND-DEVELOPMENT-FY-2016-17.pdf. Rodrigue, J., C. Comtois, and B. Slack (2016). The geography of transport systems. New York: Fourth Edition, Routledge. Uganda Bureau of Statistics (UBOS) (2006). 2002 Uganda Population and Housing Census, Analytical Report, Kampala, Uganda. Available from:http://www.ubos.org/onlinefiles/uploads/ubos/pdf%20 documents/2002%20CensusPopnSizeGrowthAnalyticalReport.pdf. UBOS (2012). Uganda Demographic and Health Survey 2011. Kampala, Uganda. Available from: https:// dhsprogram.com/pubs/pdf/FR264/FR264.pdf. UBOS (2014). Statistical Abstract. Kampala Available from: http://www.ubos.org/onlinefiles/uploads/ubos/ statistical_abstracts/Statistical_Abstract_2014pdf. UBOS (2016a). Uganda Bureau of Statistics 2016, The National Population and Housing Census 2014 – Main Report. Kampala, Uganda. Available from: http://www.ubos.org/onlinefiles/uploads/ubos/NPHC/NPHC%20 2014%20FINAL%20RESULTS%20REPORT.pdf. UBOS (2016b). Statistical Abstract 2016. Kampala. Available from: http://www.ubos.org/onlinefiles/uploads/ ubos/statistical_abstracts/2016%20Statistical%20Abstract.pdf. UNDP (2014). Uganda Strategic Investment Framework for Sustainable Land Management 2010 – 2020. Kampala. Available from: http://www.undp.org/content/undp/en/home/librarypage/environment-energy/ sustainable_land_management/country-specific-evidence/uganda-strategic-investment-framework-for- sustainable-land-manag.html. UNDP and NEMA (2017). Biodiversity Financing in Uganda: Policy and Institutional Review. Kampala: Available from: http://www.biodiversityfinance.net/sites/default/files/content/knowledge_products/Policy%20 and%20Institutional%20Reveiw%20%20Report%20-%20May%202017.pdf. USAID (2016). Power Africa in Uganda. Available from: https://www.usaid.gov/sites/default/files/ documents/1860/UgandaCountryFactSheet.2016.09_FINAL.pdf. USAID (2017). Draft Report Participatory Valuation of Bugoma Central Forest Reserve, USAID/EMOS, Kampala. USAID (n.d.). Feed the Future. Available from: https://www.feedthefuture.gov/printpdf/23. World Bank (2006). World Development Report 2006: Equity and Development. Washington DC. Available from: http://documents.worldbank.org/curated/en/435331468127174418/ pdf/322040World0Development0Report02006.pdf. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 75 World Bank (2010). Project Appraisal Document: Agricultural Technology and Agribusiness Advisory Services Project. Agriculture and Rural Development, Africa Region, Washington DC. Available from: http://projects. worldbank.org/P109224/agricultural-technology-agribusiness-advisory-services?lang=en. World Bank (2013). Economic and Statistical Analysis of Tourism in Uganda. Washington DC. Available from: http://documents.worldbank.org/curated/en/117851468108862384/ pdf/797680WP0Touri0Box0379789B00PUBLIC0.pdf. World Bank (2015). Promoting Green Urban Development of African Cities: Kampala, Uganda. Washington D.C. Available from: http://documents.worldbank.org/curated/en/172411468190763021/Promoting-green- urban-development-in-African-cities-Kampala-Uganda-urban-environmental-profile. World Bank Group (2016). An Assessment of Uganda’s Progressive Approach to Refugee Management, Washinton D.C. Available from: https://openknowledge.worldbank.org/bitstream/handle/10986/24736/ An0assessment00o0refugee0management.pdf?sequence=1&isAllowed=y. The World Bank (2016). Uganda Economic Update: from smart budgets to smart returns: Unleashing the power of public investment management. Washington DC, Uganda Economic Update, seventh edition. Available from: http://documents.worldbank.org/curated/en/859951467989540438/pdf/106178- REPLACEMENT-Uganda-Economic-Update.pdf. WWF (2016) Sustainable Financing of the Rwenzori Mountains National Park: A Business Case and Opportunities for the Private Sector in Uganda (with partial valuation Study of the Rwenzori landscape and its contribution to the local and national economy), World Wide Fund for Nature, Uganda Country Office, Kampala WWF and Fonds Français pour L’Environment Mondial (FFEM) (2016). Sustainable Financing of the Rwenzori Mountains National Park. Availavble from: https://europa.eu/capacity4dev/file/28289/ download?token=ZNNtiDSC. 76 ANNEXES ANNEXES

Annex 1: GHG Emissions Reduction Potential Used in Results Framework Measure Emissions Cumulative Cumulative Emissions reduction potential potential (% of reduction potential (mtCO2e) baseline) potential (mtCO2e) (mtCO2e) Transport: public transport 0.3 0.3 0.2% -400 Transport: fuel-efficient 1.5 1.8 1.1% -351 vehicles Electricity generation: 2.8 4.6 2.9% -33 expanding large hydropower generation capacity LULUCF: Efficient cook stoves 13.0 17.6 11.0 -6 LULUCF: Wetland restoration 0.4 18.1 11.4 5 LULUCF Reforestation, 22.9 41.0 25.7 5 afforestation, avoided deforestation Agriculture: N2O: Soil 3.8 44.9 28.1 13 management Electricity generation: 0.6 45.5 28.5 23 expanded small hydro power generation capacity Waste: waste reduction, 1.1 46.7 29.2 37 treatment and recycling Agriculture – CH4: Livestock 4.4 51.1 32.0 45 yield increase Electricity generation: Expand 1.0 52.1 32.6 80 solar PV generation capacity Agriculture – NO2: Livestock 0.1 52.2 32.7 186 mix changes Agriculture – CH4: Livestock 4.5 56.7 35.5 186 mix changes THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 77

Annex 2: Agriculture Water stress on crops: select example of maize, millet, sorghum and rice Crop production systems in Uganda are mainly rain-fed. Water stress for rain-fed systems is estimated by comparing water limited yields (Yw) to yields under a standard moisture content. The Yw values per crop type were simulated for different crop types and controlled for sowing date, crop rotation, soil type combination, and agro-ecological zones. The results in Figures a to c show the percentage yield gap in the agro-ecological zone, based on the reference research simulation and data collected between 1998 and 2012. The target research stations were: 6501 (Kabale); 7401 (Mbarara); 7501 (Namulonge, Jinja); 7601 (Arua, Tororo and Bulindi); 8401 (Kitgum); and 8501 (Lira and Soroti). The agro-ecological zones represented by the stations are: (i) 6501 - Southwestern highlands; (ii) 7401 - Southwestern grass farmlands; (iii) 7501 - Lake Victoria Crescent; (iv) 7601 -West Nile Farmlands and Northwestern Farmlands, Central Wooden Savannah; (v) 8401 - Northeast Central Grass Bush Fallow; and (vi) 8501 - Northern Moist Farmlands. The yield gap associated with water stress was lowest in the Southwestern Grass Farmlands followed by West Nile Farmlands and North Western Farmlands and the Northern Moist Farmlands, with an average yield gap ranging between 40 percent and 49 percent (Figure b). The average impact, a 51 percent yield gap, was for the Lake Victoria crescent. The highest impact of water stress resulted in a yield gap of 75 percent for Northeast Central Grass Bush Fallow and a 60 percent yield gap for the Southwestern Highlands. In all major regions of the country water stress has a significant impact by reducing yield potential for maize and additional water supply to meet the moisture requirements of the maize crop would reduce the yield gap. Such an intervention could be achieved through solar irrigation. Figure 5: Maize yield gap percentage to yield realised with optimal water content 1999 100% 2011 90% 2000 80% 70% 6501 ((YP-YW)/YP)% 2010 60% 2001 50% 40% 7401 ((YP-YW)/YP)% 30% 20% 2009 2002 7501 ((YP-YW)/YP)% 10% 0% 7601 ((YP-YW)/YP)% 2008 2003 8401 ((YP-YW)/YP)% 8501 ((YP-YW)/YP)% 2007 2004 2006 2005 Source: adapted from Kaizzi et al. 2013 78 ANNEXES Large scale rice production mainly occurs in the Lake Victoria Crescent, West Nile Farmlands and North Western Farmlands and Northern Moist Farmlands (Figure c). In all three agro-ecological zones water stress limits crop yield by between 61 percent and 68 percent; the highest stress occurs in the Northern Moist Farmlands and the lowest in the West Nile Farmlands and North Western Farmlands, while rice production in the Lake Victoria Crescent suffers yield gap losses of 64 percent. Figure 6: Rice yield gap percentage to yield realised with optimal water content 1998 100% 2011 1999 90% 80% 70% 2010 2000 60% 50% 40% 7501 ((YP-YW)/YP)% 30% 2009 2001 20% 10% 7601 ((YP-YW)/YP)% 0% 2008 2002 8501 ((YP-YW)/YP)% 2007 2003 2006 2004 2005 Of all four crops included in the case study, millet showed the lowest yield impact due to water stress ranging, on average, between 3 percent and 26 percent. The highest stress was in the Lake Victoria Crescent where average loss was 26 percent but particularly high, in excess of 40 percent in 2002, between 2004 and 2009, and in 2010. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 79 Figure 7: Millet yield gap percentage to yield realised with optimal water content 1998 45% 2012 1999 40% 35% 2011 30% 2000 25% 20% 7501 ((YP-YW)/YP)% 15% 2010 2001 10% 5% 7601 ((YP-YW)/YP)% 0% -5% 2009 2002 8401 ((YP-YW)/YP)% 2008 2003 8501 ((YP-YW)/YP)% 2007 2004 2006 2005 The other water stress related yield gap for West Nile Farmlands and North Western Farmlands, Central Wooden Savannah, North East Central Grass bush fallow and Northern Moist Farmlands was quite low. Irigation would not be recommended for millet production as it is unlikely to be the major limiting factor, although significant in Lake Victoria crescent where millet is not a major staple crop. 80 ANNEXES

Annex 3: Indicative Costing of the Uganda Green Growth Development Strategy 1. Introduction The UGGDS has been developed as the country’s blueprint to the achievement of national goals and targets in a sustainable manner. It has been informed by the 2030 Transformative Agenda on Sustainable Development, the Uganda Vision 2040 and the second National Development Plan (NDP II 2015/16-2019/20). The UGGDS is expected to be financed by the public and private sector, supplemented with financial support from development partners. This presents a succinct estimate of the financial resources required to implement the UGGDS in the short, medium and long term. This costing is an activity-based costing and is built up from the list of key actions contained in the Uganda Green Growth Implementation Roadmap that sequences interventions for the short, medium and long term. The Roadmap aims to operationalize the draft Uganda Green Growth Development Strategy (UGGDS), which identifies 13 strategies within the five core areas of agriculture, natural capital management and development, planned green cities, sustainable transport and energy for a green economy. This costing provides a first estimate of the costs associated with implementing the UGGDS over the remaining three years of the NDP II, covering the years FY2017/18 to FY2019/20. In addition, first approximations of UGGDS costs are given for the two subsequent five-year planning periods (FY20/21 to FY2024/25 and FY2025/26 to FY2029/30). The remaining ten years through to the Vision 2040 horizon are not attempted because of the inherent uncertainty of costs associated with such a long-term planning period. 2. Indicative Costing of the UGGDS Implementation of the UGGDS will cost the public finances in the region of US$ 11 billion. Table 1 breaks this figure down for each NDP planning period and provides an average annualized estimate. Table 11. Public investment costs required to implement the UGGDS Short term Medium term Long term interventions interventions interventions FY17/18 - FY19/20 FY 20/21 - FY 24/25 FY 25/26 - FY 29/30 (NDP II) (NDP III) (NDP IV) US$ millions US$ millions US$ millions Totals by period 2,607 4,972 3,443 Annualised by period 869 994 689 The annual costs of the UGGDS rise into the NDP III period and subsequently decline as early public investments are completed. 3. Elements of the costing Table 2 lists the public investment costs for each of the Core Areas of the UGGDS. The significant investment costs associated with promoting sustainable transport actions (e.g. the implementation of the Standard Gauge Railway lines) are very evident. THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 81 Table 12. Public investment costs for each of the Core Areas of the UGGDS FY17/18 - FY19/20 FY 20/21 - FY 24/25 FY 25/26 - FY 29/30 Core Area of UGGDS   (NDP II) (NDP III) (NDP IV) US$ millions % US$ millions % US$ millions % Agriculture 176 7% 496 10% 677 20% Natural capital management 104 4% 266 5% 366 11% Planned green cities 360 14% 670 13% 906 26% Sustainable Transport 1,842 71% 3,194 64% 1,051 31% Energy for a green economy 100 4% 164 3% 161 5% Cross-cutting actions 24 1% 182 4% 281 8% Totals 2,607 100% 4,972 100% 3,443 100% Note: columns may not add up to column totals due to rounding. The indicative costing consists of 50 targeted interventions that are built up from the key actions identified in the UGGDS Roadmap. All these interventions are listed in Table 3, sorted by the five core areas of the UGGDS (with the addition of a cross-cutting theme to cover those actions that spread over more than one of the core areas of the UGGDS). Table 4 then goes on to provide a first estimate for each intervention. Table 13. List of interventions by the Core Areas of the UGGDS Core Area of the Development Area UGGDS Title of Intervention 1 Agriculture Agriculture Development of solar irrigation for the most vulnerable 2 Agriculture Agriculture Improved agricultural knowledge and cultivation techniques 3 Agriculture Agriculture Increased access to sustainable agricultural inputs 4 Agriculture Agriculture Climate resilient, adaptive and productive crops widely used 5 Cross-cutting Increasing resilience & Community-based climate resilient agricultural reducing risk systems implemented 6 Agriculture Agriculture Innovative insurance to protect farmers against crop failure due to extreme weather 7 Natural capital Tourism Tourism industry revenue is used to improve the management livelihoods of local populations 8 Natural capital Tourism Tourism industry is made more climate resilient management through diversification 9 Natural capital Forestry National Biodiversity Section Plan management 82 ANNEXES Core Area of the Development Area UGGDS Title of Intervention 10 Natural capital Forestry Strengthened national forestry policy to reduce management forest loss 11 Natural capital Forestry Sustainable forest management practices management strengthened 12 Natural capital Forestry Introduction of agroforestry practices management 13 Natural capital Forestry Payment for Environmental Services system management functioning 14 Natural capital Forestry Efficient biomass energy production & management consumption technologies & practices expanded 15 Natural capital Fisheries Climate change resilient fishing practices management promoted 16 Natural capital Fisheries Sustainable fish farming practices promoted management 17 Natural capital Fisheries Improved trans-boundary cooperation in fisheries management and aquatic ecosystem management 18 Natural capital Water resources Integrated Water Resource Management systems management in place 19 Natural capital Water resources Conservation and protection of watersheds management against degradation 20 Natural capital Water resources Institutional and human resources in water management resource use developed 21 Natural capital Minerals, oil and gas Regulated oil and gas sector to reduce GHG management emissions 22 Planned green cities Urbanization/cities Integrated urban planning achieved 23 Planned green cities Urbanization/cities Flood risk management made effective 24 Planned green cities Urbanization/cities Biomethane production from landfill sites 25 Planned green cities Urbanization/cities Climate proofed transport and infrastructure development strategies 26 Planned green cities Urbanization/cities Climate proofed structural building codes enacted 27 Planned green cities Water supply and Safe water facilities provided sanitation 28 Planned green cities Waste management Increased water harvesting and efficient water utilization 29 Planned green cities Urbanization/cities Housing development policies support low- income communities 30 Planned green cities Urbanization/cities New and enhanced green spaces in urban centres 31 Planned green cities Urbanization/cities Improved building energy efficiency THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 83 Core Area of the Development Area UGGDS Title of Intervention 32 Sustainable Transport Introduction of bus rapid transport system transport 33 Sustainable Transport Implementation of light rail transit system transport 34 Cross-cutting Education, training & Strengthened public transport system skills 35 Sustainable Transport Implementation of all Standard Gauge Railway transport lines 36 Sustainable Transport Introduction of vehicle emission standards transport 37 Sustainable Transport Promote reduction of GHG emissions from transport transport sector 38 Energy for a green Energy Increase household energy efficiency economy 39 Energy for a green Energy Improved cookstoves economy 40 Energy for a green Energy Enhanced focus on off-grid renewables economy 41 Energy for a green Energy Reduction in GHG emissions from energy economy generation 42 Energy for a green Energy Diversification of energy generation sources economy 43 Energy for a green Energy Increased private sector involvement in clean economy energy generation 44 Energy for a green Energy Developed domestic hydroelectric and economy geothermal power resources 45 Cross-cutting Increasing resilience & Gender considerations mainstreamed in climate reducing risk change issues 46 Cross-cutting Increasing resilience & Climate change education, public awareness & reducing risk knowledge management promoted 47 Cross-cutting Health and improved Climate smart population policies and programs livelihoods put in place 48 Cross-cutting Health and improved Health workforce uses climate change information livelihoods to improve health practices 49 Cross-cutting Health and improved Contingency plans in place for climate resilient livelihoods health systems 50 Cross-cutting Health and improved Strengthen public health systems to respond to livelihoods impacts of climate change 84 ANNEXES Table 14. Estimated public investment costs for each intervention FY17/18 - FY 20/21 - FY FY 25/26 - FY FY19/20 (NDP II) 24/25 (NDP III) 29/30 (NDP IV) Title of Intervention US$ millions US$ millions US$ millions 1 Development of solar irrigation for 3.2 5.3 10.5 the most vulnerable 2 Improved agricultural knowledge 84.1 252.6 372.3 and cultivation techniques 3 Increased access to sustainable 51.5 171.6 278.8 agricultural inputs 4 Climate resilient, adaptive and 5.5 7.1 11.8 productive crops widely used 5 Community-based climate 2.8 2.9 3.9 resilient agricultural systems implemented 6 Innovative insurance to protect 29.4 56.4 - farmers against crop failure due to extreme weather Agriculture 176.5 495.9 677.3 7 Tourism industry revenue is used 0.7 2.0 - to improve the livelihoods of local populations 8 Tourism industry is made 1.4 2.0 3.6 more climate resilient through diversification 9 Estimated implementation cost of 31.8 53.0 53.0 $10.6 million / year 10 Strengthened national forestry 0.4 2.3 - policy to reduce forest loss 11 Sustainable forest management 0.4 1.1 - practices strengthened 12 Introduction of agroforestry 55.1 146.8 201.9 practices 13 PES system functioning 0.4 1.1 - 14 Efficient biomass energy production 0.7 2.3 - & consumption technologies & practices expanded 15 Climate change resilient fishing 3.7 20.9 44.8 practices promoted 16 Sustainable fish farming practices - - - promoted THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 85 FY17/18 - FY 20/21 - FY FY 25/26 - FY FY19/20 (NDP II) 24/25 (NDP III) 29/30 (NDP IV) Title of Intervention US$ millions US$ millions US$ millions 17 Improved trans-boundary - - - cooperation in fisheries and aquatic ecosystem management 18 Integrated Water Resource 8.3 30.5 61.5 Management systems in place 19 Conservation and protection of - - - watersheds against degradation 20 Institutional and human resources 0.9 2.7 - in water resource use developed 21 Regulated oil and gas sector to - 1.8 1.5 reduce GHG emissions Natural capital management 103.8 266.5 366.3 22 Integrated urban planning 51.0 85.0 75.0 achieved 23 Flood risk management made 81.3 135.5 135.5 effective 24 Biomethane production from - - - landfill sites 25 Climate proofed transport and 84.6 144.8 336.8 infrastructure development strategies 26 Climate proofed structural 1.1 1.0 - building codes enacted 27 Safe water facilities provided 11.4 28.4 - 28 Increased water harvesting and efficient water utilization 0.7 4.2 6.1 29 Housing development policies - - - support low-income communities 30 New and enhanced green spaces - - - in urban centres 31 Improved building energy efficiency 130.4 271.4 352.9 Planned green cities 360.5 670.3 906.3 32 Introduction of bus rapid transport 30.7 92.0 - system 33 Implementation of light rail transit - 193.1 965.6 system 86 ANNEXES FY17/18 - FY 20/21 - FY FY 25/26 - FY FY19/20 (NDP II) 24/25 (NDP III) 29/30 (NDP IV) Title of Intervention US$ millions US$ millions US$ millions 34 Strengthened public transport 76.3 - - system 35 Implementation of all standard 1,684.4 2,807.3 - gauge railway lines 36 Introduction of vehicle emission 3.0 1.0 - standards 37 Promote reduction of GHG 47.6 100.4 85.3 emissions from transport sector Planned green cities 1,842.0 3,193.8 1,050.9 38 Increase household energy 10.6 17.6 17.6 efficiency 39 Improved cookstoves - - - 40 Enhanced focus on off-grid 84.5 140.8 140.8 renewables 41 Reduction in GHG emissions from - 3.1 1.1 energy generation 42 Diversification of energy 5.2 - - generation sources 43 Increased private sector - 0.6 0.4 involvement in clean energy generation 44 Developed domestic hydroelectric - 1.8 1.5 and geothermal power resources Energy for a green economy 100.3 163.9 161.4 45 Gender considerations 1.4 2.9 4.5 mainstreamed in climate change issues 46 Climate change education, 1.2 3.2 3.7 public awareness & knowledge management promoted 47 Climate smart population policies 3.9 10.2 9.9 and programs put in place 48 Health workforce uses climate 17.1 - - change information to improve health practices THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 87 FY17/18 - FY 20/21 - FY FY 25/26 - FY FY19/20 (NDP II) 24/25 (NDP III) 29/30 (NDP IV) Title of Intervention US$ millions US$ millions US$ millions 49 Contingency plans in place for - 23.7 23.7 climate resilient health systems 50 Strengthen public health systems - 141.8 239.3 to respond to impacts of climate change Cross-cutting 23.6 181.8 281.1 4. Estimate of current Government spending that contributes to the UGGDS An exploratory analysis was undertaken to try to distinguish between costs already budgeted for and new, additional costs that would be required to implement the UGGDS. This was only attempted for the first-time period (FY17/18 – FY 19/20) based on the current Medium Term Expenditure Framework 2017/18 – 2021/22, as no public expenditure has been committed for the two following time periods. There are several existing sources of possible funding for the first three years of the UGGDS: ■ Domestic resources raised through the national budget ■ External finance channelled through the national budget ■ Bilateral donor support (off-budget project expenditure) An estimate of the first two sources was made through an analysis of the Approved Estimates of Revenue and Expenditure (Recurrent and Development) for the Financial Year 2016/17 (the ‘Approved Estimates’) to provide an indicative net (additional) cost estimate for the implementation of the UGGDS over the first time period (for short-term interventions). This analysis reduced the initial cost estimate of US$ 869 million per year for the short-term interventions of the UGGDS to US$ 840 million per year. This 3 percent reduction suggests that many of the UGGDS investment costs have yet to be incorporated into the budgeting process of the implementing ministries. However, there are some areas of the UGGDS where Government spending already exceeds the indicative UGGDS cost estimates, due to methodological and definitional differences. Overall, a total of US$ 521 million of relevant spending was identified in the Approved Estimates for 2016/17. Major capital spending projects (such as the Isimba and Karuma hydroelectricity projects) made up a large percentage of this total. 88 ANNEXES 5. Contribution of external finance The planned scale up in total public investment is expected to contribute to a temporary increase in the overall fiscal deficit, as forecast in the FY2016/17 – FY2020/21 National Budget Framework Paper. External financing will therefore remain an important source of financing for Government’s public investment projects. A review of relevant external project financing in the Approved Estimates of Revenue and Expenditure, FY 2016/17, indicates that the implementation of the UGGDS will be enhanced by continuing external support (Table 5). Table 15. List of external project financing relevant to the UGGDS for FY2016/17 No. ECT Code Name External Financing Project (USD millions) 4 1139 ATAAS (Grant) EU, WB and DANIDA funded 5.0 4 1139 ATAAS (Grant) EU, WB and DANIDA funded 18.5 4 1316 Enhancing national food security 5.6 5 1363 Regional Pastoral Livelihood Improvement Project 8.8 10 1102 Climate change project 0.5 10 1301 The national REDD+ project 0.4 10 1417 Farm income enhancement and forestry conservation phase II 14.3 14 137 Lake Victoria Environmental Management Project 6.2 18 165 Support to Water Resource Management 0.9 18 1074 Water and sanitation development facility - North 4.4 18 1075 Water and sanitation development facility - East 2.1 18 1130 Water and sanitation development facility - Central 11.1 18 1359 Piped water in Rural Areas 11.1 40 1023 Promotion of renewable energy and energy efficiency 4.2 44 1026 Mputa Interconnection project 24.6 44 1143 Isimba hydroelectricity power plant 130.6 44 1183 Karuma hydroelectricity power project 226.2 44 1350 Muzizi hydro power project 3.8 Total 478.4 THE UGANDA GREEN GROWTH DEVELOPMENT STRATEGY, 2017/18 – 2030/31 89 6. Methodology This indicative costing has had to rely on secondary literature to derive a first approximation of the costs of the UGGDS. The results of the costing need to be considered in this light. Two previous reports supplied the cost estimates that have been used. The first of these, the 2016 report by the Government of Uganda and the New Climate Economy Partnership ‘Achieving Uganda’s Development Ambition’ (AUDA) was developed to support the preparation of the UGGDS. This document includes annual investment costs for a series of green growth interventions. A second, earlier costing of the National Climate Change Policy (the draft Costed Implementation Strategy, (CIS )also provides detailed, activity-based investment costs over the short, medium and long term. Both reports were extensively peer-reviewed and validated through national consultations to provide assurance over the precision of the cost estimates. For the indicative costing, each UGGDS Implementation Roadmap action was examined to see whether it corresponded to the costed actions of the two reports and where a thematic match was found the appropriate cost category was added. (It was found that more than one Roadmap action could contribute towards a single costed intervention.) The only additional costing source used was for the ‘Implement the National Biodiversity Action Plan’, where the investment cost was taken from the Action Plan itself. For the AUDA , annual costs were available for each intervention and so could be summed to provide the three time period estimates. The data also indicated the split between public and private investment costs, with only the former being included. The CIS data were recorded for three five-year periods, so for the short- term actions only three-fifths of the first CIS period cost was included in the costing. (The CIS report did not distinguish between public and private investment costs, so it was assumed that the reported costs were all public costs.) The implementing Ministries for all the interventions in the UGGDS were then determined, with a total of nine ministries being identified (Ministry of Agriculture, Animal Industry and Fisheries, Ministry of Lands, Housing and Urban Development, Ministry of Education and Sports, Ministry of Health, Ministry of Works and Transport, Ministry of Energy and Mineral Development, Ministry of Gender, Labour and Social Development, Ministry of Water and Environment, and Ministry of Tourism, Wildlife and Antiquities To identify existing spending for the NDP II period, the UGGDS Implementation Roadmap actions were used to identify relevant budget line items in the Approved Estimates, using keyword analysis to search the FY 2016/17 Ministerial Policy Statements (MPSs) for each of the nine ministries to identify relevant budget lines across both the recurrent (programmes) and development (projects) budgets. For the development budget, Government and external financing sources were distinguished. With the potential programmes and projects identified in the MPSs, the 2016/17 Approved Estimates costs of expenditure were then extracted from the Approved Estimates. The Ugandan shilling 2016/17 Approved Estimates were then converted into US dollar amounts, using the exchange rate of UGX 1,000 to US$ 0.27322 on the reference date of 1 January 2017. One final methodological step associated with the current spending estimates was to categorize the relevance of the budget spending to achieving the goals of the UGGDS interventions. Each budget line was assessed and put into one of three relevance categories: low, medium and high relevance, according to the perceived overlap between the budget line spending and the UGGDS actions. Weights of 10 percent, 50 percent and 90 ANNEXES 100 percent were then applied to the financial data to derive an indicative contribution to the green growth objective. All estimates were rounded to the nearest one million dollars to derive an indicative net costing of the UGGDS for short-term interventions on an annualized basis. It is acknowledged that this estimate may be conservative, in that only one year of budgeted spending has been accounted for, and it was not possible to assess external off-budget sources of funding. This Green Growth Development Strategy was prepared under the UNDP Low Emission Capacity Building (LECB) Programme, with funding from the European Commission, the German Federal Ministry for the Environment Nature Conservation, Building and Nuclear Safety, and the Australian Government. The LECB Programme is a country-driven initiative that promotes essential cooperation between relevant institutions, engaging the public sector and industry in a concerted effort to design and implement approaches to low emission development that are consistent with national development priorities. Uganda is one of the 38 countries participating in the programme. Empowered lives. Resilient nations. SECTION TITLE Empowered lives. Resilient nations.