KAMPALA, Sept. 13 (c-news.ug) – Uganda’s strategic public investments between FY2020/21 and FY2024/25, amounting to Shs. 2.9 trillion, have driven significant advancements in sectors like tourism, energy, petroleum, transport, and ICT infrastructure. These developments are shaping Uganda’s economic trajectory, but challenges remain in optimizing these gains.
Tourism Resurgence
Uganda’s tourism sector demonstrated remarkable resilience, recovering 82.6 percent of pre-pandemic international arrivals by 2023, welcoming over 1.27 million visitors, a sharp rise from 814,508 in 2022. Revenues from international tourism soared by 48.5 percent, reaching Shs. 3.819 trillion in 2023, compared to Shs. 2.57 trillion the previous year. This rebound reflects the sector’s strong recovery efforts and investments in tourism infrastructure. Furthermore, compliance with national and international tourism standards rose from 34 percent to 55 percent, improving service delivery and Uganda’s competitiveness, Matia Kasaija, the minister of Finance, Planning, and Economic Development, said on September 11 while delivering the budget strategy for the financial year 2025/2026, at Speke Resort and Convention Center, Munyonyo.
Increased tourism revenues and visitor numbers suggest a robust recovery post-pandemic. Higher service standards can enhance Uganda’s global tourism appeal. Despite growth, however, the sector remains vulnerable to external shocks like global health crises and geopolitical uncertainties, requiring further diversification and sustainability planning.
Petroleum Development Progress
Uganda’s petroleum sector has seen notable progress, particularly in value addition, transportation, and storage infrastructure. The Upstream Petroleum Project has advanced, with drilling underway and the East African Crude Oil Pipeline (EACOP) making strides in land acquisition and resettlement processes. Additionally, the government has focused on building skilled human capital, training over 11,000 Ugandans in petroleum-related fields since 2017.
Significant progress in petroleum infrastructure and human capital development positions Uganda to benefit from oil production once operations commence. However, ongoing challenges in land resettlement and delays in the EACOP construction could hinder the timely realization of the sector’s potential. Furthermore, fluctuating global oil prices may pose financial risks to Uganda’s economic reliance on petroleum exports.
Expanding Energy Infrastructure
Uganda’s electricity generation capacity has tripled over the last 13 years, reaching 2,046.8 MW in FY2023/24, up from 984 MW in FY2017/18. The percentage of households with access to electricity increased from 21% to 57%, driven largely by the adoption of off-grid technologies like solar home kits. Electricity consumption per capita also rose significantly, reflecting growing demand for energy.
Uganda’s expanded energy infrastructure improves access to electricity for households and businesses, contributing to increased productivity and industrial growth. The grid loss rate of 18.7 percent signals inefficiencies in the distribution network, which could impact service reliability. Further investment in transmission and grid management is required to optimize capacity.
Transport Infrastructure Boost
Significant investments in road and rail transport have enhanced connectivity and reduced travel times. By FY2023/24, 29.4 percent of Uganda’s national roads were paved, up from 21.1 percent in FY2017/18, improving accessibility for trade and tourism. Freight transport by rail increased to 8 percent, reducing travel time from Kampala to Mombasa to 15 days, down from 19 days.
Better road and rail infrastructure fosters trade efficiency, lowers transport costs, and supports the tourism sector. Despite progress, rail transport remains underutilized, handling only 8 percent of cargo, suggesting more investment is needed to unlock its full potential. Additionally, the high cost of road maintenance could strain public finances.
ICT Growth and Internet Penetration
The ICT sector has seen major improvements, with internet costs dropping from USD 70 per Mbps in FY2017/18 to USD 35 in FY2022/23. Internet penetration surged to 55%, while the number of people subscribed to the internet rose to 53% in 2022. The National Backbone Infrastructure (NBI) expanded to 4,229 km, improving broadband coverage and enabling digital transformation across the country.
Reduced internet costs and expanded broadband access have driven digital inclusion and economic opportunities in sectors such as e-commerce, education, and telemedicine.
While internet penetration has grown, the affordability of internet services remains a concern for lower-income households, limiting the overall impact of digital transformation.
Conclusion
Uganda’s strategic public investments in tourism, petroleum, energy, transport, and ICT infrastructure have catalyzed economic recovery and growth. However, inefficiencies in energy distribution, underutilization of the rail network, and capacity constraints in the tourism and petroleum sectors underscore the need for further investment and reforms. Addressing these challenges will be key to sustaining the momentum of Uganda’s economic transformation.
